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1998 to 2008: The first wave

The first wave of brazilian internet startups started in 1998 during the hype of the Internet Bubble.  Zeek and Cadê, two search startups, were funded and acquired by Starmedia for crazy valuations.

When the bubble burst in 2000, almost all startup activity disappeared. The Brazilian startups that did survive became some of the biggest tech companies in Brazil.  UOL IPO’d in 2005 and Buscapé is still the leading price comparison engine.

Argentine startups ended up faring better during this time. Two of the biggest companies in Brazil today, MercadoLivre and Despegar (Decolar locally), were founded in 1999 by Argentines.  MercadoLivre remains one of the most influential tech companies in Brazil and has a market cap of over 4 billion dollars.  The founders and early employees had tremendous success.  Today they are regarded as the local equivalent to the Paypal Mafia.

After 7 years with little startup activity, the market in 2007 started to hint that it was ready for a next generation of startups.  Boo-Box (digital advertising network for blogs) and Via6 (LinkedIn clone) received about $300,000 each.  None of the startups in this generation went on to become huge successes.

2009: A Hero Emerges

The global financial crisis only brushed Brazil and US companies were eagerly searching for new growth opportunities in emerging markets.  Foreign VC's, private equity funds and bankers, such as Naspers, Tiger Global, NEA, and Goldman Sachs became transfixed by an untouched market of 200 million people.  Local VC's like Monashees Capital, and Confrapar were also doing their first early stage deals.  

Shortly after the wheels started turning, Buscapé Inc sold to Naspers for $342 million.   The investment hypothesis of investors was coming true and Brazil was back in the spotlight.

2010-2012: Attack of the Clones

Brazil enjoyed three hot years following the sale of Buscapé.  VC's competing for deal flow and high valuations were the norm.  Peixe Urbano, a Groupon clone, went from 0-500 employees in under a year.

If an entrepreneur could identify a proven internet business model in the United States and clone it in Brazil, he probably could convince investors.  Companies such as Baby.com.br (Diapers.com clone), Kekanto (Yelp clone),  BrandsClub (Gilt clone) raised huge series A/B rounds.  Entrepreneurs and investors prayed that the US innovators would acquire their clones or leave them to dominate the market.  By the end of 2010, there was a clone of almost every successful startup in the US.

In 2011, the ecommerce market started booming.  Internet penetration was rising and Brazilians quickly learned the benefits of shopping online.  Forrester forecasted that the e-commerce market in Brazil would grow by an annual rate of 18% annually.

Rocket Internet bet the most money on this trend.  They launched several e-commerce companies in different sectors.  Dafiti (Amazon clone) became the most successful.  It still remains one of the largest e-commerce companies in Brazil.  Dafiti had estimated revenues of $200 million in 2013.

2013 to Today: Foreigners Remain Distantly Close

2012 was the biggest year for internet Startups in Brazil.  By 2013, many of the foreign investors that praised Brazil decided to shut down operations.  Local investors with more knowledge of the Brazilian landscape quickly took their place. Foreign investors are instead choosing to invest in local VC’s. By doing this, they take advantage of the booming market and skip the complications of deal flow and bureaucratic policies.

E-commerce remains attractive, but most of these companies are now raising series B,C and D rounds.  Ecommerce seed rounds are no longer as common. Total sales for brazilian ecommerce industry are expected to reach $22 billion by 2016.  However, most of the companies are burning big cash to stay alive and facing increased competition.

ContaAzul (accounting software for small to medium sized businesses) is leading the way for a new generation of SaaS and B2B startups. Foreign companies remain interested in Brazil but are taking some risk off the table by purchasing Brazilian startups that have already raised series A and B rounds from local investors. Eventioz recently sold to Eventbrite, Comprova sold to Docusign, Ceviu sold to Careerbuilder.

The future is bright!

Notable Startups

The local startup ecosystem is currently at a semi mature stage.  Few companies have reached billion dollar valuations and many others are touching valuations in the hundreds of millions.

In the billion dollar club, or “Unicorns,” are Submarino (B2W), UOL, Mercado Livre and Decolar.  Mercado Livre and Decolar have Argentine founders but concentrate their operations in Brazil.

There are still plenty of opportunities for new startups looking to gain noteworthiness, but only a few have set themselves apart.  Buscapé is the biggest hero for the new startup generation, but companies like Viajanet, Hotel Urbano, Peixe Urbano, VivaReal, EasyTaxi, Sacks (now Sephora) were able to reach valuations of over 100 million.

Other prominent exits in the last five years include:

  • Folhamatic was acquired by Sage for over $170M

  • Mandic was acquired by Riverwood for $500M

  • Catho sold control to Seek at US$375M

  • Virid was acquired by Experian for over $50M

There is also a big group of rising stars.  World Startup Report defines rising stars as a young company that has raised millions of dollars demonstrating strong traction.

  • Conta Azul (raised undisclosed series B recently)

  • Kekanto (raised $5.5M)

  • Oppa (raised $15.4M).

For the most up to date information about VC and angel funding in Brazil checkout Dealbook.co.

Brazil’s Biggest Past Success  by Valuation (Startups over  5 years old)

Brazil’s Biggest Current Success by Valuation (Startups <5 years old)


The Brazilian ecosystem is no longer the “wild west” that it was in 2011.  Many of the largest U.S. and European funds have developed a deeper understanding of the local market.  A few of them have left Brazil however many are still actively investing in the country.

There are 207 identified angel investors/venture capitalists that have made at least one investment in the Brazilian market, according to Dealbook.co. However, an angel/VC is not usually a Brazillian entrepreneurs first round of investment

Programs like SEED and Startup Brazil provide the initial safety net for an entrepreneur that wants to take a leap of faith.  Unfortunately, bridging the gap from a government accelerator to a meaningful seed round is almost impossible without strong connections and prior startup experience.

500Startups is one of the few accelerators looking to solve this problem. The fund has already made over 20 investments in Brazil and looking to do more. They typically invest about $200K into their companies.  

Regarding angel investment, there are few angels with the expertise to mentor a growing a startup, due to a lack of previous exits.  Term sheets can be hard and the size of investment usually falls in the $25-100k range.  The few angels that can provide value are former startup founders that exited or current entrepreneurs.  Kai Schoppen (Founder of BrandsClub), Florian Otto (Former Groupon Brasil CEO), Fabrice Grinda (Serial entrepreneur), Cassio Spina (founder of Anjos do Brasil), Luciano Tavares (Founder of Magnetis) and Manoel Lemos (Founder of BlogBlogs) are the ones to look for.

B2B startups are lucky to have an extra option.  It is not uncommon for large companies in the same industry to incubate a startup.  By following this approach, entrepreneurs can take advantage of being closer to their clients, back office infrastructure, an established sales network and bootstrap their way to profitability with little capital.

Strong communities are forming in Belo Horizonte (San Pedro Valley) and Rio de Janeiro but São Paulo is still the place to be when fundraising from local investors.  

“If you are an entrepreneur, and find yourself in the ‘seed round crunch,’ save your company by getting on a bus and going to São Paulo” @wheretodrew

Foreign Venture Capital investments have slowed down in the past year but local funds are taking on more capital and growing.  It is without a doubt that Brazil was “sexier” in 2011 and 2012.  The US economy was struggling to get back on track and Brazil was granted the right to host the 2014 World Cup and 2016 Olympic games.  Entrepreneurs without a product and prior technology experience received large seed investments.  However, few startups gained enough traction to validate their pre money valuations.  Foreign investors such as Sequoia and Accel followed the hype to Brazil but left after making few investments.  

On the other hand, local angel funds and VC’s are doing the opposite.  Kaszek Ventures, one of the leading LATAM VC’s, closed a new $135 million fund that received participation from the same Silicon Valley big shots that left the prior year (Sequoia and Accel).  

There are at least three funds with more than $100 million under management and focused on investing in Brazilian companies: eBricks Ventures, Redpoint eVentures and Kaszek.

Monashees and Kaszek are typically an entrepreneur's best bet for receiving a series A, closely followed by eBricks Digital. These firms are the most active investors in technology startups and will normally follow on with Series B/C rounds syndicated by US funds such as Thrive Capital, Atomico, Flybridge, Tiger Global and Insight Venture Partners.

Top 10 Most Active VC in Brazil by # Deals Completed

Top 10 Most Active Incubator/accelerator in Brazil by # Deals Completed


Since 2009, Brazil has seen significant increases in startup-related community meetups, events, discussion groups, conferences and startup media.  These targeted events are the best place to find co-founders, motivated talent and investor leads.

Conferences to watch for include Geeks on a Plane, Demo Brasil, BrNewTech, Lean Startup Machine, and Campus Party.

There are also several startup pitch competitions such as Buscapé's "Sua Ideia vale 1 milhão", eBrick's “PREI,” Locaweb's “Startup Competition” and Startup Weekend.  Each event offers opportunities, prizes and visibility that entrepreneurs need to accelerate their businesses.  

Getting a popular startup blog to profile your company such as Startupi, Webholic, Exame PME and Startups Stars can also help with early user acquisition.

Local Heroes

Romero Rodrigues (Buscapé, sold to Naspers), Vinícius Roveda (ContaAzul, a rising star), Julio Vasconcelos (Peixe Urbano), Manoel Lemos (Blog Blogs, sold to Abril), Tallis Gomes (EasyTaxi) and Phillip Klien (Predicta, sold to RBS) are considered some of the local tech heroes because of their prior successes building recognized technology brands. All of them are extremely passionate about mentoring the next generation of young entrepreneurs and remaining active in the startup community.

It’s easy to see that the roster of local heroes is much smaller in Brazil than developed economies.  With this being said, there is still many available places on the Brazilian wall of heroes. This wiki hopes hopes to provide individuals a chance to seize this opportunity

Many people can also serve as a connector for a startup that wants to enter foreign markets or raising international funding.  Bedy Yang (partner at 500 startups and founder for BRNewTech) and Nico Berman (partner at Kaszek Ventures) are the most prominent.

Government Institutions

The entrepreneurial mindset has been slow to materialize in Brazil.  Realizing that the economy of the future will be made by startups, the Brazilian government has been incentivizing entrepreneurship through public programs.

Startup Brazil

Startup Brazil is a program that was created by the Brazilian Federal Government.  It aims to support the local startup ecosystem by subsidizing startups with government grants and connecting them to private accelerators.

The program picks around 50 startups every 6 months to receive an equity free financing grant of about $90K. These startups should plan to have a long-term presence in Brazil.  25% of the spots in the program are awarded to foreign startups.  The private accelerator that agrees to help the accepted startup will also invest $20,000 in exchange for a small amount of equity.  

Although these programs can help an early stage company with funding, mentorship and navigating of Brazilian bureaucracy, there are also some controversial issues.

  • Academics (CNPq) and government employees aren't the most suited professionals to pick the startups that should receive the grants.

  • Accelerators with zero track record are joining the program, just to get their slice of the government money.

  • The mentors at many of the private accelerators have little experience in the technology sector and are taking advantage of the government grants to help them obtain higher equity percentages in early stage companies.

  • Public funding is distributed as a scholarship. Applicants need to meet the criteria of specific academic and professional experience to receive the scholarship.    This means that founders are not able to set the salaries of their employees.

  • The grant money must be spent on hiring Brazilian employees.  Not on third party services or IT infrastructure costs.

  • These grants are very bureaucratic.  Expect to do a lot of form filling to obtain the money. A few foreign founders had to leave the program as the time it took to receive the funds was simply too long to make the program worth it.

The federal government acknowledges many of these issues and is working to fix them for future companies that decide to take part in the program. Since the program is still young, it is important to keep an eye on how these changes play out in the next batches.  Yet, the scenario is promising and the government is adapting fast.

State governments are also creating programs to help early stage startups succeed. SEED (Government of Minas Gerais) and Startup Rio (Government of Rio de Janeiro) are good examples.

SEED (Startups and Entrepreneurship Ecosystem Development)

The SEED accelerator program was modelled after the successful Startup Chile program.

Entrepreneurs receive:

  • Up to $36,000 in equity free financing

  • Help obtaining visas and filing necessary paperwork

  • Coworking space for local and and international companies.

Different from Startup Brazil, capital investment can be used to pay for third party services, international employees and necessary IT infrastructure.

Although this has been the most effective government accelerator to date in Brazil, there are still many large problems.

  • The way the disbursement of funds is structured in a way that an entrepreneur that is participating in the program to have over R$20,000  in a bank account at the start of the program for working capital and to receive all the money that is promised.

  • Mentors are more difficult to find since Belo Horizonte is not a big tourist destination.  Participants in the program should expect to make several trips to Sao Paulo to find investors

  • Office space is cramped which can cause many conflicts.  Early hires of a startup won’t be allowed into the building causing teams to work separately at such a critical time.

The state government of Minas Gerais  acknowledges many of these issues and is working to fix them for future companies that decide to take part in the program.

The program announced in May of 2014 that they will be providing foreign entrepreneurs with permanent visas so that entrepreneurs can be expedited through bureaucratic obstacles to operate their business.

Startup Rio

The local government of Rio de Janeiro seems to more closely resemble Startup Brazil than SEED.  Accepted startups enter into a partnership with private-local accelerators to receive mentorship and up to $40,000 in financing.

Private Learning Institutions

There are a number of institutions that aim to teach engineering and entrepreneurship.  However, none of them have been effective in in crafting a curriculum that addresses both disciplines.

A  few of the more prestigious programs in Brazil such as Endeavor and Bel Pesce's FazInova focus only on mentoring entrepreneurs.  These programs serve as a stepping stone to students who are interested in the growing startup scene.

According to the 2013-2014 Times Higher Education World University Rankings, Brazil does not have a university that ranks in the Top 100 for Engineering and Technology.

The Founder Institute has already established offices in São Paulo as their first Brazilian location, and started to schedule events.  However, the details of what these events have yet to be defined.  It is still too early to tell what type of value the Founder Institute will seek to deliver.