Brazil 2010: Samba, Soccer, and Startups

In 1999, at the height of the internet bubble, a group of three college students in São Paulo, Brazil came up with an idea for a comparison shopping engine and called it Buscapé, a popular winding firecracker symbolic of their scouring the web for the lowest prices. Buscapé went on to grow a commerce business dominant in most major countries in Latin America. This year, it was acquired for $347 million, making it the 27th largest acquisition of 2009.

The sale of Buscapé, within the backdrop of a robust Brazilian economy, acted as the catalyst for a Brazilian technology revolution, in the same way that the 1995 Netscape IPO sparked the web explosion in America.

In 2010, look to Brazil to make an entrance into the global technology, producing a string of home-grown successes like Buscapé as well as startups that are key players on the major platforms like Facebook, Twitter, and Google.

To understand why 2010 will be the year of Brazil, we need to first look at why 2009 was so special. Earlier this year, while the world was on the brink of a depression, Brazil weathered the storm relatively unscathed, picking up along the way the world’s approval with Rio’s selection as the home for the 2016 Olympics, and The Economist’s enthusiastic “Brazil Takes Off” endorsement on its cover. While Silicon Valley startups were told to switch to survival mode, a mix of government and private sector programs in Brazil created a healthy pool of capital for entrepreneurs. The Brazilian startup culture also matured during the year with the growth of information resources and events comparable to the budding tech scenes we’ve seen in Boulder and New York.

If 2009 was the year when all the pieces fell into place, 2010 will be the year when Brazil capitalizes on its new-found position. Internet usage is exploding: Internet penetration is rapidly expanding thanks to government-sponsored access, broadband access is proliferating, and mobile web usage is maturing as mobile data costs fall and smartphone adoption jumps. This series of compounding growth factors is creating fertile ground for new independent startups armed with a model of success and an eye on global markets.

Brazil has also started to see the opportunity outside its own borders, especially in the large open platforms. As the 3rd largest Twitter population (based on unique users from Google AdPlanner), Brazil also boasts a popular URL shortener in Migre.me. A Farmville-like casual game, Colheita Feliz, has already amassed 12 million users on Orkut - more than Facebook and Twitter users combined - (still the dominant social network in Brazil) and has set the stage for a home-grown social gaming company in the spirit of Zynga and Playfish.

Brazil has enough technical talent to launch both independent startups as well as big players on the major platforms (tens of thousands of computer science grads every year) – and it has a wealth of creative talent that assures many of these startups be innovative products rather than local copy-cats. For Brazil, 2010 is poised to be a year of world-class soccer, samba, and startups!