Buzzing São Paulo, home to some 45 million people and with a landmass larger than the UK, already hosts the South-American headquarters of tech powerhouses like Google, Uber and Airbnb. Now the Brazilian state’s startup scene is gaining momentum as well. According to KPMG, Brazilian startups raised a record-setting $2.7 billion in the second quarter of 2021. The acquisitions market in the country is hot as well, with Twilio buying Teravoz in January 2020 and Etsy buying Elo7 in June for $217 million. Brazil currently has 9 active unicorns, including Nubank, Fifth Andar, 99, Stone, and Gympass. The São Paulo government is working to ensure the state benefits from this influx of investment by streamlining processes and improving internet access. It is now possible to start a company in just 5 days. Many of Brazil’s best accelerators and incubators are located in the state, including Google’s only Latin-American incubator. Banks Itaú and Bradesco have incubators in São Paulo. In 2013, the State of São Paulo invested US$ 3.8 billion in R&D, 73.7% of national R&D expenditure. São Paulo is also home to an extensive network of public and private research institutions, as well the São Paulo Technological Park System and one of Brazil’s leading research support agencies, the Research Support Foundation of São Paulo (Fapesp). São Paulo-based Positive Ventures recently raised a $10 million fund to invest in social impact startups. 4 of the 10 best universities in Latin America are located in São Paulo.
Ecosystem by the numbers
The São Paulo real estate market is booming with turnover in the construction industry in the state nearly doubling in value over the last 5 years. The annual gross revenue of real estate services in the state jumped from US$ 2.15 billion to US$ 3.2 billion from 2007 to 2011. As a result São Paulo is home to the highest concentration of Proptech companies in the country. Rental services startup Yuca has raised a total of $14.7 million over 2 rounds. Real estate platform Loft, a unicorn, has raised a total of $788 million over 5 rounds. Another real estate platform, QuintoAndar, raised $755.3 million over 8 rounds and achieved unicorn status.
Reasons to move your startup to São Paulo
The Brazilian government runs over 20 initiatives aimed at developing the country’s startup ecosystem. InovAtiva Brasil, a public program jointly carried out by the Ministry of Economy and Brazilian Support Service to Micro and Small Enterprises (SEBRAE), offers free support to startups, connecting them to market and investment opportunities. It is the largest acceleration program in Latin America.
Access to Funding
São Paulo-based startups can access a range of public funding programs, such as Desenvolve SP, which offers various credit facilities with competitive interest rates. Banco do Povo Paulista (BPP) is a microcredit program developed by the government of São Paulo that offers loans up to US$2,000 to individuals and small businesses at interest rates of 0.35% per month and loans of up to US$4,900 for cooperatives.
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