Brazil ICT Digital Transformation

In 2021, Brazil’s startup ecosystem received a record investment of $9.4 billion from venture capital funds from around the world, many of whom are based in the United States. The record investment came as the pandemic accelerated the digitalization of the country’s economy as limitations on the movement of goods and individuals changed consumer behavior. This phenomenon shaped new opportunities for domestic and international consumers and businesses who looked to the United States as an example of a strong digital economy. U.S. companies interested in exporting technology and services should consider the evolving market in Brazil and explore opportunities emerging across sectors.

Currently, Brazil is home to 18,000 start-up companies, accounting for 77 percent of startups in Latin America and over 70 percent of start-up investment in the region. Its diversified economy and large consumer base make it an interesting option for exporters looking to work with startups and other opportunities related to digital transformation. 

While the startup market has shown considerable dynamism recently, stock market volatility, political uncertainty, and weak economic growth at the beginning of 2022 may dampen the Brazilian start-up economy. Another factor that may contribute to the slowdown this year is the tightening of economic policy in the United States, where several venture capital firms investing in Brazil are located. The lack of skilled workers has also been a hindrance to startup expansion in Brazil, even as the market responds favorably to new digital products and services. 

Still, Brazil is now home to 60 percent of all unicorns in Latin America and the State of São Paulo alone has invested over $1.22 billion in R&D over the last decade. Brazil’s digital economy demonstrates the potential for continued growth over the medium and long term and thus opportunities for U.S. products, services, finance, and even educational exchanges will likely abound into the future. 

For more information, please contact the Commercial Specialist for ICT in Brazil, Patricia Marega, through patricia.marega@trade.gov.