Ecosystem Deep Dives #18: Brazil - LATAM's locomotive
Due to the combination of its large population and the latter's insatiable hunger for digital services, Brazil's start-up ecosystem is on the rise.
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Brazil, the only Portuguese-speaking country in LATAM, is the 5th largest country in the world and regroups 1/3rd of the continent’s population. On top of its sheer size, the Brazilian population stands out in terms of its internet usage. Indeed, Brazil has the interesting specificity of having more mobile phones than people, and making up a large part of GAFAM & Co’s user base.
“Brazil has been a consumer internet heavyweight for global messaging apps (Brazil is WhatsApp’s #2 market after India) and social media usage (Brazil has the fifth largest population of social media users worldwide and the largest outside the U.S. and Asia).” - Sequoia Capital
The size of the Brazilian domestic market also enables local start-ups to reach IPO-level scale without needing to internationalize (although that doesn’t mean they don’t). This “easier” path to scale isn’t the same for Colombian or Chilean start-ups for example, who are obliged to start planning international operations from the get-go. A common trend amongst non-Brazilian LATAM start-ups is actually to raise significant fundraising rounds based on the promise of capturing the vast Brazilian market. Recent Series B funding raised by Colombian start-ups Platzi and Chiper exemplify this type of move.