Menu

São Paulo

While not as iconic as Rio, São Paulo’s status as Brazil’s financial and business center makes it tremendously appealing to startups, a reputation supported by the full quarter of the Brazilian Startup Association’s companies that call the city home. Brazil’s population, at over 200 million, dominates Latin America with both size and internet use. Brazilians constitute the second largest user base for Facebook, Twitter and Youtube, making an attractive market. However, several impediments remain – Brazil’s business environment remains tepid for entrepreneurs. Regulations on labor are extensive and the onerous bureaucracy involved in starting a business stands in the way of founders hoping to make quick entries into the market. A recent initiative launched by the city, the Tech Sampa program, is one cause for optimism, offering financing for interested startups.

In This Market

These businesses offer industry expertise and are a source of startup talent and potential customers. They help fuel the local startup community.

Opportunities

  • São Paulo is the largest city in Latin America’s largest country. Success here can therefore translate to scale elsewhere in the country and in the region.
  • As the financial capital of Brazil, the city has a tremendous amount of wealth that can be invested in promising startups.
  • There is significant opportunity for eCommerce as a result of the city's role as the commercial center for Brazil.
  • Startup Brasil, an initiative by the Brazilian government, gives local startups access to 17 business accelerators in the Startup Brasil network.
  • Corporate involvement is significant, with São Paulo home to many major companies, as well as the fourth Google Campus in the world, slated to open in 2015.
  • São Paulo’s startup economy is the most mature by far in the country, with approximately a quarter of startups located here.

Risk Factors

  • An extremely high cost of living due in large part to high urban population density, which also contributes to problematic traffic.
  • Bureaucracy makes business difficult – according to the World Bank Group, it takes an average 83.6 days and 4.3 percent of income per capita to start a new business. Regulations concerning labor and taxes are also heavy burdens for founders.
  • Angel investing is a relatively new field in Brazil and the network is still in its infancy. While accelerators have gotten a lot of positive attention, investors still lack experience.
  • As in many other Latin American countries, many startups are essentially clones of US firms and are uncompetitive beyond Brazil. Scaling outside the country is therefore difficult.
Methodology

Market Indicators

Notable Success Stories

Funding

Key players

Market timeline

Suggest a change