Brazil at Silicon Valley
This has been a very difficult year for global tech companies and entrepreneurial ecosystems. However, Brazil at Silicon Valley managed to shed light on the opportunity for innovation in Brazil and the commitment of those building and investing in the country. Latin America continues to emerge as a vibrant landscape of innovation, and Brazil is quickly establishing itself as the epicenter.
Simon Rodriguez outlined this sentiment as “Ask anyone and Brazil is X years ahead of Spanish-speaking LatAm, where X depends on the nationality of the responder”.
As BBVA reports, “São Paulo’s entrepreneurial ecosystem is valued at $108 billion. In comparison, Mexico City’s (the second-largest in Latin America) is valued at $22 billion.”
Moreover, São Paulo holds the 4th place in the Global Fintech ranking. In a region where “cash is king,” Brazil is leading the charge towards digital payments. Brazil’s Central Bank launched the country’s instant payment system PIX in 2020, which already boasts more than 130m registered users (60% of Brazil’s population).
To explore Brazil’s technological progress, students from Stanford and Berkeley hold an incredible annual event called Brazil at Silicon Valley (BSV).
As the name suggests, the aim is to bridge the gap between Brazil and Silicon Valley. This year, BSV was attended by a diverse crowd of over 600 founders, investors, technologists, and policymakers. My unofficial estimate is that at least 550 attendees undertook the long journey from Brazil — a minimum of two flights spanning at least 15 hours.
Let’s just say that my portuñol came in handy.
During the Agtech session: How innovations in food systems can help solve the climate crisis, a BSV staff member used a voice-to-text function to generate the Chat-GPT summary minutes after the session was over. Naturally, the summary was sent around via Whatsapp.
This year’s BSV illuminated several key investment themes:
● Verticalized Software + Fintech: There are endless opportunities to create and scale local software solutions. Brazil has benefitted from supportive policies and the role of its Central Bank in implementing the digital payment system PIX. Angela Strange, a Partner at a16z, emphasized her view that every company will be a fintech company, as financial services will be a horizontal platform. She cited Fudo*, Uber, Lyft*, among others as noteworthy examples. We also think Kanastra* is a great example of an exciting fintech infrastructure play.
● Agtech + Climate: Agribusiness represents almost 30% of Brazil’s GDP, 40% of the country’s exports, and 20% of the labor force. Brazil is well-positioned to lead climate change initiatives, both in terms of technological innovation and adapting existing agricultural practices. Investors are looking for nature-based solutions, hardware and software plays, and sound business models that are not overly reliant on government subsidies (e.g. pass the Villain Test). Companies highlighted included Plenty, BCD Bioscience*, and Strella Biotech.
● AI: Two key messages resonated throughout the event: 1) we don’t know what we don’t know, and 2) the transformative potential of AI, which will affect almost every aspect of our lives. Alexandr Wang and Peter Norvig called for a careful rollout of AI technology and thoughtful consideration of its global impact. Optimism and enthusiasm for technology were spread by Vinod Khosla of Khosla Ventures and Julio Vasconcellos of Atlantico. They referenced Reinventing Societal Infrastructure with Technology). Check out how Diferente* is using AI for inventory management and recipe recommendations.
● The Fundraising Market: A clear slowdown in the market is being felt across the board, with rounds taking longer to close, valuations compressing, and regional exit liquidity shortages. However, these conditions also make it a great time to build as we’ve seen teams be laser-focused on unit economics, capital efficiency, and nailing down PMF. McKinsey launched the 2023 Latin American Digital Report during the event.
One thing that was not mentioned during the conference – politics.
As a Venezuelan, I found it refreshing to see Brazilians come together and discuss secular trends, opportunities to innovate, and what is going right with the country’s policies. After all, technological development is a rising tide that lifts all boats.
In the week following BSV, Rio hosted Web Summit – a tech event that drew more than 20,000 attendees. Numerous key stakeholders have since gathered in NYC for events hosted by Itau, BTG, and Bank of America. I was lucky to attend Itau’s Women Leaders in NY honoring Ingrid Silva. While an uptick in events doesn’t necessarily equal a surge in innovation, it undeniably illustrates the escalating interest in Brazil as a premier global hub for tech development.
For great content about local and international tech events related to the Brazil entrepreneurial ecosystem, check out Julia de Luca and Lucas Abreu’s newsletters.
And make plans now to join us at BSV next year, the Vamos Latam Summit in São Paulo, or Brazil Climate Summit in NYC.
With tons of admiration from a very Venezuelan VC.
Luisa
*Denotes Collab Portfolio Company