1 Nov 2021
Brazil: Investment Booming for Tech Start-ups
The Index Today
Technology startups in Brazil are booming as large investments are making their way into the risky segment. Despite increasing challenges of the nation’s bureaucracy and slow economic growth, a string of new entrepreneurial projects are gaining momentum and attracting renowned corporations.
Brazil’s new regulations are designed to help boost competition in various industries which were previously monopolized by a few companies. Now entrepreneurs have more ease and access to finance through venture-capital investors. The rise of the usage of internet has also played a key role in pushing the need for more mobile applications and technology development.
More young individuals are opting to start up their own business rather than work for a corporation or a multinational. According to the Brazilian Association of Startups, over 13,000 startups have been founded this year alone.
Nubank, a digital baking startup was founded back in 2013 and has attracted investment from large corporations including Berkshire Hathaway Inc. The startup now has over 40 million customers and is gradually growing its market share. The firm initially offered credit card fees through smartphones but has now increased its product offerings to include insurance, loans and investing services.
The bank has been able to build its platform to adapt to advancement in technology and consumer demands. Mike Packer, a Nubank investor said, “These are things that even in the U.S the regulatory constructs are pretty opaque. For a fintech and for innovation, Brazil has the most progressive, the most favorable central banking regulations in the world.”
Inspired by the growing entrepreneurial segment in the nation, more insurance regulators are now trying to restructure their regulations in hopes of attracting startups and creating digital competition.