BRAZIL: STARTUP CENTRAL

Techcrunch published last week an article titled Brazil: A look into Latin America’s largest startup ecosystem #techcrunch which provided an overview of the country's startup world, key players, and cities. I thought this was serendipitous because I happened to be in Brazil visiting some of the very places mentioned in the article at the time. I thought I'd share a more personal view of the ecosystem during my brief stay there.

The Country: Much has been said of the financial and economic woes facing Brazil at the moment. It is clear, that long gone are the days where Brazil's economy grew at double-digit pace. However, it takes a mere week there to realize the market opportunity remains large, at least in SP where I was located. New international players entering the market (Google, WeWork), and local players are doubling down on some areas of investment, like innovation (ITAU).

Some of the challenges facing these new players and Brazilians as a whole continue to be related to Labor regulations & political instability. I heard over and over again during my visit about the high burden employers have to pay to hire anyone and the easiness for former employees to sue the employers which make many new companies wary of hiring anyone even when things are going well. Surely, these regulations had an intent of protecting workers but they seem to be one of the major hurdles for growth in the digital economy where staff needs change rapidly. On the plus side, many of these unemployed have now become entrepreneurs. There is not enough time or the space to talk about the political challenges facing Brazil so I will leave that to another time.

About the Ecosystem: My visit was limited to Sao Paulo, so I will not comment on the other cities mentioned in the article. During my time in Brazil, I was able to visit 3 of the major centers for innovation mentioned. The first, CUBO, impressed me significantly. A collaboration between major Corporate Founders (ITAU & Redpoint) it represented for me the future of innovation in Brazil. A space where major Corporate players mingled and shared experiences with up and coming startups all under the same beautifully designed roof. Important to note here is that this space and community are managed by PLUG (plug.co) which I will talk more about later. This showcases the uniqueness of this initiative that although driven by large corporate sponsors, it is managed by local coworking operators and fueled by a dynamic group of local entrepreneurs.

The second place I visited was the Google Campus SP. This place was beautifully designed and is only one of few Google campuses outside the US. One must apply to become a member, preferably online before you arrive. The morning of my visit there was a line waiting to get in, driven in part because access to the space is completely free but also because of the level of talent that can be found there. Once at Campus, as it is referred to by locals, I learned about the resident accelerator program, Startup Farm (https://en.startupfarm.com.br/) and was able to meet with Camila from their team the next day. Over 200 startups have gone through their program and can count VISA as official partners. Startup farm was named the most active accelerator in LATAM in recent years. Expect to see big things from this team and many successful exits from their portfolio startups.

Finally, I'd like to share my experience visiting PLUG (www.plug.co). A disclosure here, I manage a PLUG space in Cambridge, but nonetheless, I'll try to remain objective. I was able to visit multiple PLUG locations, in Brooklin and Calixto. Both locations were over 90% occupied and had a vibrant population of entrepreneurs. Notable in my visit was a non-profit that occupied almost a full floor and multiple examples of companies that had grown from 1 or 2 employees to 10-15 employee companies. The energy in the offices was palpable, offices full, meetings taking place, deals being closed; from independent workers to 20 person companies there is no doubt coworking is there to stay in Brazil and PLUG exemplifies why.

All in all, it was an inspiring trip, where I was also able to visit my brother who is running a fantastic turn-around firm (TCP) and whom I thank for his hospitality greatly. Through my trip, I was a witness to the energy and innovation brewing in the country and although the recession has hit many parts of the economy, Brazilians remain inventive and driven. I am sure to be back! If you have any questions about my visit or looking to make connections in Brazil please send me a note.