The Multinational Business Ecosystem in Brazil

Along with start-ups, investment funds, seed investors, incubators, accelerators, innovation hubs, universities, specialized training centers, and entrepreneur networks are some of the most important players in the ecosystem. For a start-up ecosystem to be healthy, these players must be present in large numbers. Brazil has a healthy environment. In the past few years, the Brazilian start-up ecosystem has grown a lot. There are now a lot more start-ups, support programs, and cash available. Due to the rise of the ecosystem, the country has seen a number of success stories. A large number of companies have gone on to become unicorns (privately held start-ups worth at least $1 billion) or publicly traded companies.

The Brazilian start-up environment has grown a lot in the last few years, but it is still pretty new

A lot of start-ups in Brazil were made in the early 2000s, when the market for these kinds of businesses was still new and there were lots of chances to try new things. Important things happened in the market right before the 2000s. Buscapé was the first e-commerce company in Brazil to offer price comparison services. It was founded in 1999. Also in 1999, Mercado Libre, an Argentine start-up, came to Brazil and sold its goods. All of these things played a big role in making online shopping popular in Brazil. In 2005, the first venture capital and technology investing funds in Brazil opened for business. During this time, Brazil's new start-up environment continued to move forward at a slow pace. In 2009, the country reached a major turning point. In that year, Buscapé was sold to Naspers, a South African company that is one of the biggest tech investors in the world. Naspers paid $342 million for 91% of Buscapé's shares. Buscapé was the first Brazilian start-up to have an exit, which happens when a start-up is bought by a bigger company or comes out with an IPO and starts selling shares to the public. Growing internet use in Brazil helped the start-up environment in the 2010s. From 2010 to 2020, the percentage of people in Brazil who used the internet rose from 41% to 81%. In Brazil, important legal changes were made in the second half of the decade to make it easier to get money. In 2016, Brazil's law on micro and small businesses was changed to include rules for angel investors. Angel investors are people or businesses that put their own money into companies with a lot of growth potential in exchange for a share of the business. As of 2017, the Brazilian Securities and Exchange Commission (CVM) regulated crowdfunding. Crowdfunding is a way for many investors, usually small ones, to put small amounts of money into a business or project through special online sites.

In 2018, the Central Bank of Brazil put out two decisions (numbers 4,656 and 4,657) that changed the country's credit market in big ways

These decisions started to set rules for how fintechs could lend and finance things without banks getting involved or acting as middlemen. Fintech regulation encouraged the growth of companies that could offer innovative financial products and services that were cheaper and less complicated to customers. This led to a wider range of companies working in the sector and higher competition. Before 2018, the credit market was only open to banks and other financial companies. Since 2011, fintechs have been able to act as go-betweens for banks and users and offer extra services like credit checks. But it wasn't until 2018 that fintechs were given the freedom to work without banks. Also in 2018, the ride-sharing company 99 was named the first Brazilian unicorn, which was another very important event for the country's innovation environment. Soon after, other companies, such as the fintech Nubank and the food delivery app iFood, also reached this level. At this time, big investors were becoming more interested in the Brazilian start-up environment. From the end of 2018 to the beginning of 2019, Softbank, a big venture capital firm, invested $5 billion in Latin America through a fund that went into Brazil. The market got hotter when more experienced owners joined and there was more money available. This led to a new wave of Brazilian unicorns. During the COVID-19 outbreak, the process of going digital moved faster. Start-ups were very important to this process, and in 2021, there were more investments in them than ever before in Brazil. The Start-Up Legal Framework (Complementary Law No. 182) was passed the same year. It was a law made to encourage the growth of research, development, and innovation activities in the private sector, make the rules for start-ups easier to understand, and give investors more peace of mind.

The Brazilian start-up environment is likely to become more important as more people get access to and use technology

This is because of the needs that have come up because of the COVID-19 pandemic. In the past few years, things like online learning, e-commerce, telemedicine, and digital banking services have grown a lot. This is because the digital transformation movement is speeding up. Brazil is the main place in Latin America where new businesses are started, and the country has many benefits that help new businesses grow. First, the fact that Brazil has one of the biggest economies in the world is a big factor that encourages new businesses to form. This is because companies that are already established in the country have direct access to a huge market where they can try new things, grow, and reach a size that makes them players and gives them the chance to start expanding internationally. Another thing about the country is that it has the biggest economy and population in Latin America. More than 80% of the people in the country also have access to the internet. In addition, more than 10% of adults in Brazil own their own business, making them the most creative group in Latin America. A strong ecosystem helps people in Brazil start their own businesses; in fact, the country has the best environment for new businesses in all of Latin America. Brazil has more start-ups and unicorns than any other country in the area because of these good conditions.