Brazilian shoppers
Image Credit: REUTERS/Dominic Ebenbichler (BRAZIL) - RTR3SXMY

Brazil showed off its cultural brilliance, spirit and national pride on a grand stage during the recent Olympic Games in Rio.

Despite a prolonged macroeconomic crisis, the world’s ninth largest economy is showing positive signs that it may roar back as an investment magnet and innovation powerhouse—especially driven by fast-growing tech sectors that have continued to deliver growth rates of up to more than 20% in the face of overall disappointing gross domestic product data, TechCrunch reported.

Just days after the Olympics closed in Brazil, the country has refocused its efforts to speed past its political scandals that hinder investor confidence in the future of Latin America’s biggest economy. The final decision to impeach former Brazilian President Dilma Rousseff gave many a sigh of relief from the political power struggle that’s consumed the nation for far too long.

With only two months into President Michel Temer’s term, he’s been a “big hit with investors”, according to a Bloomberg news feature published in late July. The country’s benchmark equity index has risen about 60% this year, and the International Monetary Fund reports that consumer and business confidence seems to have bottomed out.

A Morgan Stanley study released in mid-summer indicates that investor confidence and interest in emerging markets like Brazil is on the rise—especially in the wake of the uncertainty and economic fallout following the Brexit referendum vote.

The BRICS Post reports that the IMF “says confidence in the Brazilian economy is slowly reawakening” and the organization has forecast positive growth for Brazil during 2017.

Tech Sector Progress

In spite of the country’s downturn, tech spending in Brazil is rising and entrepreneurship is flourishing. Corporate venture capital growth and a more mature ecosystem is further boosting the prospects for the country’s economic engine to rev back up again, driven by technology sector innovation.

Below are some of the outstanding companies that are being nourished and built in Brazil today, and why the five tech sectors they operate in promise rapid growth and strong investor returns.

Agritech

Brazil is a major agricultural powerhouse. It helps feed the world. The sector’s shown continued strong growth over the past few years. Brazil ranks among the world’s five largest agricultural producers and exporters.

Edtech

The Brazilian government has made improvement of the country’s education system a top priority, and the edtech industry has been booming as a result. Many startups are adapting tools already tested in other countries and designing them to suit Brazil’s cultural norms and needs. A key benefit to improving education is increasing the quality and readiness of the country’s workforce as Brazil’s economy improves and more jobs are created in the process.

Fintech

Brazil’s banking and financial services systems have become quite sophisticated, one of the unexpected outcomes from the 500% average inflation per year during the 1990s. However, the market is very concentrated. Almost 80% of the $2 trillion in deposits are concentrated in only five banks, two of them state-owned. The sector has been mired in paperwork, regulations and bureaucracy, which has helped lead to expensive credit for consumers and businesses.

The emergence of new fintech startups in the country is driving more transparency, speed, automation, mobile access/management and customer self-service to the country’s financial services sector.

Healthtech

Brazil is among the world’s fifth most populous countries and its rapidly growing middle class is demanding even more high-end healthcare. A higher life expectancy and its “baby boomer” population is driving more healthcare demand.

Medical technology is advancing at a rapid pace, making healthtech a leading investment sector.

According to a PwC MoneyTree report, venture capitals invested $12.1 billion in 969 deals in the first quarter of 2016; the software industry received the most investment dollars. The second highest investment amount went to the life sciences sector. A number of Brazilian startups have emerged to address a big healthtech opportunity.

SOURCEFinancial Tribune
SHARE
Carlos Monteiro is a Brazilian citizen, graduated in Business Administration by the Catholic University of São Paulo. He lives in Odense, Denmark with his Danish Wife, Cathrine, and their half Danish /Brazilian daughter Ines Marie. You are very welcome to be in contact him at any time.

Leave a Reply