Yes, you heard it right: there is more than one Silicon Valley in Brazil. At least four cities dispute the title of ‘Brazilian Silicon Valley,’ marked by the concentration of tech companies and the booming scenario of innovation.
In Latin America’s largest market, with almost 150 million internet users, technology is not only something to be imported from other countries but has been developing at the very core of thriving cities, creating jobs and responding to some of the biggest challenges in the region.
“Latin America’s most persistent challenges have become business opportunities for local entrepreneurs who are using technology to bridge some of the region’s most urgent gaps,” says Susana Garcia-Robles, Chief Investment Officer at IDB Lab, the innovation laboratory of the IDB Group (Inter-American Development Bank).
According to her, these challenges are the key to a ‘Made in Latin America’ brand. “It is a brand marked by innovation, with a clear social and environmental awareness.”
In these Brazilian Silicon Valleys, companies and entrepreneurs have been developing solutions for transportation, logistics, education, financial access, and health care. In some of the cities, tech is already responsible for at least 20,000 jobs.
“Latin America’s digital economy looks like China’s 10-15 years ago, with technology penetration rates growing at a fast pace,” says Garcia-Robles.
Investors have already recognized the potential of these solutions: Japan’s SoftBank has created a fund exclusive to Latin America, which plans to pour USD 5 billion in the region. Brazil itself already has six unicorns, and there are probably more to come this year. Many of them are located at these local innovation hubs.
Below, meet some of the ‘Silicon Valleys of Brazil’.
This island in southern Brazil is best known for its gorgeous beaches and natural landscapes that attract over 6 million international tourists every year. But, a few years ago, the tech industry surpassed tourism as the main source of tax revenue for the city. Companies headquartered in town have an annual revenue of BRL 6.5 billion per year.
“Not long ago, there was a saying that, to find a job in Florianópolis, you should join the public sector or become a fisherman,” says Daniel Leipnitz, president of ACATE (Association of Tech Companies in Santa Catarina).
“But many young engineers who graduated in the city didn’t want to leave. So they started to endeavor.”
Now, at least 20,000 people are employed in the sector, according to ACATE. The number of tech companies in the city has reached 4,000, and many of them are located in innovation centers and incubators. Three of these spaces have been inaugurated in Florianópolis over the last year.
“These are spectacular places to get together, to collaborate, to host events and meetups. People get encouraged by others’ experience, and that helps a lot,” says Leipnitz.
In fact, innovation has become practically a tradition in ‘Floripa’: the first tech companies that emerged from this environment, thirty years ago, are now called the ‘first generation.’ Fourth, fifth and even sixth generation companies have already emerged in the city.
The historic town of Recife, in the northeast of Brazil, has transformed a once-neglected neighborhood into a vibrant technology community. Born in 2000, Porto Digital was one of the first innovation parks in Brazil focused on IT and, later, on the creative economy. Historic buildings were restored and turned into incubators, innovation centers, and headquarters for local startups.
Nowadays, Porto Digital holds 300 companies that employ almost 10,000 people. Multinationals such as Accenture have also joined the park, which helped to boost business, cooperation, and exchanges between the companies. The annual revenue of Porto Digital is estimated at about BRL 1.7 billion.
The park has also launched a laboratory focused on urban innovation, and encourages women and students from all over the state to work in tech. This year, Porto Digital launched a partnership with private universities from the state of Pernambuco, offering bachelor degrees that meet the needs of its companies and include internships as part of the syllabus.
“This is how a city must position itself in the 21st century: with highly qualified jobs, investment in education, high-quality production,” says Pierre Lucena, president of Porto Digital. “We want to further disseminate this innovation culture. Developing technology can’t be just a middle class thing. It must reach that guy from the outskirts, from the rural area.”
Porto Digital was first conceived by the state government of Pernambuco, but has since become reality in a “triple helix” partnership that also includes and entrepreneurs.
Among the recent solutions developed within its ecosystem, there is In Loco, a location platform that helps businesses to better interact with customers (the company has recently raised USD 20 million in investments), and Voxia, a software that turns videos from judicial hearings into text, which has been used by public prosecutors in Pernambuco.
Best known for its urban and architectural solutions, Curitiba is now trying to position itself in the technology sector. Automotive and communication industries that settled in the city back in the 1970s were once the main source of innovation, revenue, and jobs in town. Now, they have been joined by software companies, startups, and fintechs that are flourishing together in an initiative called ‘Vale do Pinhão.’
“It is a plural movement, led by a lot of actors, such as the government, companies, universities, and the population itself,” says Cris Alessi, president of Agência Curitiba, a governmental body. “It now belongs to the city, not the government.”
Besides offering tax deductions, Vale do Pinhão promotes business rounds and meetups, engages students in tech courses and bolsters the requalification of the city.
Today, part of downtown Curitiba is known as the ‘Guadalupe Valley,’ due to the large concentration of tech companies and startups, such as EBANX, Madeira Madeira, and Olist, in the neighborhood of Guadalupe Church. Entrepreneurs sometimes meet in the elevator, or in one of the many coffee places around.
“It is much better to endeavor in a collaborative environment. Curitiba has improved a lot in this aspect, and it is also positioning itself as a tech city, which helps to attract investments,” says Alessi.
The headquarters of Google’s engineering center in Brazil, the city of Belo Horizonte also hosts a number of local tech companies in what is known as the San Pedro Valley.
Located in the São Pedro district, in the capital of Minas Gerais, this neighborhood has approximately 200 tech companies. Entrepreneurs used to keep bumping into each other in the bakeries and hallways. In 2011, they created an official group to boost collaboration and entrepreneurship and to exchange ideas about their businesses and experiences.
“I think that what makes the difference in our ecosystem is the openness that we have among companies. The kind of friendship that we have here is true and constant,” said entrepreneur Gustavo Caetano in an interview to TecMundo.
Caetano is now an advisor to a handful of tech companies in Brazil, four of them located in BH.