São Paulo in Brazil reaps the benefit of job creation, innovation and economic growth as an upcoming Mecca of startups!

10/30/2017  |  Startups

No other city like São Paulo is as controversially discussed as the Brazilian metropole: smog, traffic, crumbling sidewalks and the gap between poor and rich – but in the same breath, citizens will tell you they’d never live anywhere else. And apart from that, silently and unobtrusively, São Paulo evolved into a buzzing place of entrepreneurship. Boosting up to 2,700 active tech startups, São Paulo is home to the largest and most mature startup ecosystem in South America! Also, the Brazilian tech epicenter is one of the 15 largest ecosystems in the world. And yet, the city is not on everyone’s radar. Want to change that? Cool! Lean back and find out about São Paulo’s strengths, weaknesses and special features.

São Paulo’s biggest strengths for startups

São Paulo’s strength #1: Currency

The Brazilian currency lost a lot of value compared to the U.S. dollar. But what presents itself as a straight downside, is actually a big plus: Since companies in Brazil are pretty cost-efficient, American investors can focus on their potential when in the decision-making process on who to financially support. Also, foreign entrepreneurs get more for their seed capital, for example bigger office facilities. Not having to count every penny – not just an entrepreneur’s dream in São Paulo.

São Paulo’s strength #2: Basic Conditions for Startups

São Paulo has plenty of resources for young businesses and entrepreneurs, from startup accelerators to co-working spaces. As the largest city in Brazil, São Paulo counts about 12 million residents, and startups are pretty much naturally scattered across neighborhoods. Considering that, the city offers great startup resources without being overcrowded – an advantage our CODE_n finalist Precifica benefits from as well. In this context, Ricardo Ramos, Precifica’s CEO suggests that “Although it is expensive maintaining an office in the south area of São Paulo city, it is one of the best places you can be located if your business model depends on in-person meetings and your target persona are marketing and sales decision makers. Most of the time, meetings will occur in a radius of up to 3 kilometers, which is a benefit if you consider São Paulo traffic jams. Another benefit would be that the facilities available around the area attract highly skilled employees.”  Nonetheless, for safety reasons, make sure to avoid São Paulo’s favelas when travelling to meetings and business partners.

São Paulo’s biggest weaknesses for startups

São Paulo’s weakness #1: Weak Business Networking

Even though it’s nice to start a business in a non-jam-packed area, the lack of density reveals considerable weaknesses. This can make it difficult for early-stage ventures to make key connections, or to learn from their peers. So, be prepared for limited opportunities when it comes to networking with local players and investors and make the most of the opportunities you get.

São Paulo’s weakness #2: Cultural Diversity

Brazil is among the most racially diverse countries in the world. Because of this diversity, attaining a personal feeling for the country and its market can be quite difficult. Although, mastering São Paulo’s market could be the ultimate challenge to check if you are ready to take on the international market.

São Paulo’s special features to lure startups

São Paulo’s specialty #1: Governmental Support

To support the startup scene, the city government of São Paulo selects a group of technology-based startups for the fostering scheme “SP Stars”. The winners undergo a mentoring program and get access to advice from international tech companies, including Google, LinkedIn and Cabify. Through this initiative, the city’s government states its beliefs in startup companies and turns São Paulo into an extremely entrepreneur-friendly zone.

São Paulo’s specialty #2: Economic Power

With its economic power, São Paulo stands out for bringing together the main initiatives to stimulate the startup ecosystem. Furthermore, the city is the country’s financial hub and holder of the biggest consumer market, making it extremely appealing for high impact entrepreneurs.

São Paulo’s specialty #3: Top Startup Meetups

To fully understand the Brazilian startup scene, it is highly recommended to attend dedicated events and meetings for entrepreneurs. Luckily, São Paulo hosts a bunch of them with a wide range of different topics and fields.

But not only São Paulo has got promising startup qualities to offer – take a look at Belo Horizonte for example! The city located in Brazil’s San Pedro Valley provides great opportunities when it comes to a diverse and stimulating work environment. But there’s more to come:  also Rio de Janeiro’s startup scene is booming! Check out our Alumnus Aentropico and his thoughts on the topic.