Entering the market in Brazil

What to expect in Brazil?

Market validation and entry: Start-ups can conduct market research to validate business hypothesis, identify potential customers and partners, confirm that Brazil is a worthwhile market, and prepare and implement entry strategies.

Network: Start-ups have access to a network of experts and mentors specialising in science, technology and doing business in Brazil. In addition, start-ups are connected with local organisations, research institutes, can participate in trade shows and can take advantage of co-working spaces in Rio de Janeiro and São Paulo.

Product validation: Start-ups have the opportunity to validate their product or service in a highly adaptive and diverse market of over 200 million inhabitants. Swiss technologies are well received throughout the country, but it is essential to bridge the Brazilian business culture, language, regulatory, and legal system. In collaboration with partner organisations in various verticals, the start-up is put on a highway to market validation, thereby saving costs and time.

Follow-up: Stable, long-term relationships are key to ensuring the success of a business, with interpersonal connections being particularly highly valued in Brazil. Swissnex in Brazil maintains contact with the start-up and its stakeholders after the camp ends and represents the start-up’s mission in Brazil, e.g. through events or a communication campaign.

Learn more with Bianca Campos, Innovation & Startups Program Manager at Swissnex in Brazil

Why expand into Brazil?
Brazil is a market of 215 million people and has a long history of being among the twelve largest economies in the world. With a recorded strong growth of 4.6% in 2021 after the pandemic recession, the country has the most prominent start-up ecosystem in Latin America. In this sector, investments increased 8 times in 2021 compared with 2018.

What’s the Brazilian market like?
The Brazilian population and its organisations are fond of all technologies, but the tropical country shows some characteristics that favour specific industry verticals. The Brazilian is an early adopter and a strong consumer on all income levels and, as e-commerce grows, so does the need for new platform or service technologies, along with the infrastructure, logistics, and financial know-how needed to support and optimise the consumer market.

Besides the large market size Brazil has a mixed health care system with both public and private healthcare providers. As the population in Brazil continues to grow and age, there is an increasing demand for healthcare services. Additionally, the rise of chronic diseases, such as diabetes and hypertension, is also driving demand for innovative solutions. The country has a favourable regulatory environment and a thriving startup ecosystem, with a growing number of incubators, accelerators, and venture capital firms focused on healthcare.

In a country where more than 25% of the GDP is related to agribusiness, The food sector industry, a sector that accounts for a large share of the country’s GDP, continues to grow and the aim for technologies that support and enable sustainable food systems is latent. Brazilians are reducing animal protein consumption, but finding alternatives is still difficult. Agricultural products represent a large share of exports to China, the United States, Argentina and the European Union.

Brazil is also likely to become a key player in the energy transition and bioeconomy. It already has one of the cleanest energy mixes worldwide, with almost 50% of its energy coming from renewable sources. Its abundant, renewable energy sources include hydro, biomass, wind, and solar, and Brazil is expected to become one of the world’s largest green hydrogen producers.

What is the state of innovation?
Brazil is an emerging country that is rapidly gaining maturity in innovation and open innovation. This trend can be observed in the steadily growing number of accelerators, incubators, investors, innovation centres, R&D centres and co-working spaces. The openness of the corporate sector is also a highlight; many corporations in Brazil have innovation areas focused on trend scouting and establishing partnerships with start-ups in order to start innovation projects. In addition, the corporate venture sector is growing and open to investing in international start-ups that can solve innovation challenges in Brazil.

How easy is it to find qualified employees and partners?
Brazil has seen an unprecedented expansion of university education and technical training opportunities over the past 20 years, thanks to new legislation and public and private investment in training. Access to higher education is now a given, and this development has improved the quality of the workforce. At the same time, Brazilians are investing in continuing education to improve their careers. Nevertheless, the market shows increasing demand for highly qualified professionals, and foreign language skills still need to be improved.

What are the advantages of Brazil?
Brazilians are very open minded. They like trying out new technologies and getting the latest models of products. They lead in daily time spent on the Internet and are very active on social networks. The Brazilian social and cultural identity is rooted in the Americas, Europe and Africa, which makes the business environment easier and the cultural gap smaller for Swiss entrepreneurs.

What opportunities do Rio de Janeiro and São Paulo offer?
Rio de Janeiro and São Paulo are the largest cities in Brazil and offer a wide range of opportunities. Home to more than 20 million people, they make regular appearances in lists of top 10 cities for digitally active entrepreneurs. Rio de Janeiro has R&D technology parks affiliated with top universities in areas such as biotechnology, engineering, computer science, oil and gas, renewable energy and the creative economy, among others. São Paulo is the financial heart and industrial powerhouse of the country. The State of São Paulo is home to almost 50% of Brazil’s active start-ups (2022 figure). Most of them are developing technologies in the areas of biotechnology, big data, artificial intelligence and machine learning, and the market segments they serve most are health and well-being, and agribusiness. The world’s most innovative companies have offices in São Paulo, which improves the conditions for market innovation and traction, hiring of skilled labour and investments.

What are the challenges?
Bureaucracy is one of the main challenges that entrepreneurs face in Brazil. This wastes time and money for businesses and is compounded by high local and federal taxes. Despite the impressive variety and quantity of data collected, the ability to use it is limited due to the lack of structured databases. In addition, language can be a barrier to accessing information and data from public institutions, as such resources are mainly in Portuguese. These conditions and other aspects of the Brazilian business culture make it necessary to have contacts with reliable and trustworthy local partners in order to enter the market.