Breeding innovation has been a key aspect in the long-term strategy for governments and companies from around the world, to the point that making significant investments in brand new enterprises and startups has been a focus point for these organizations over the last few years.
With this mindset, the Startup Brasil program was created by MCTI, the Brazilian Ministry of Science, Technology and Innovation, in order to position the country as one of the main grounds for innovative enterprises in the world, bringing private investment and accelerating the development of new ideas and business models.
The program was created in 2013 and was inspired by the successful models of other government-led programs such as Startup Chile, which helped the development of various national and foreign startups over the last few years including success cases Todoist, SaferTaxi and CruiseWise. The initiative, managed and funded by MCTI, had the goal of turning Brazil into a major hub for innovation and also providing a welcoming environment to entrepreneurs, in a similar way to what was achieved by other startup programs.
Still ongoing and with four rounds initiated, Startup Brasil serves as an opportunity for young national and international companies to venture into the country’s rising entrepreneurial environment and gain, at the very least, business expertise, knowledge and valuable contacts.
Entrepreneurs and business partners who wish to experience the Startup Brasil program are highly advised to understand its peculiarities, such as the fact that, unlike Startup Chile, the Brazilian model puts an increased emphasis on the role of accelerators.
Each round of Startup Brasil begins with the release of Editais, which are calls for applications issued by the National Council for Scientific and Technologic Development. During this stage, accelerators will be chosen to participate in the program.
The choice of accelerators are based on parameters such as the track record of their teams, their relationships with investors, academic institutions and major companies, and the size of their investment in the program. The accelerators are delegated a number of responsibilities, which are evaluated continuously throughout the length of the program. Among other terms, accelerators are required to:
- Mentor the incubated startups
- Assist national companies to adapt better to the global market and vice-versa
- Make investments of at least BRL 20,000 in the startups through seed capital, with or without equity
- Offer the physical infrastructure for these companies to be installed
- Offer an in-loco mentoring and acceleration course with a minimum duration of three months
In the list of 17 accelerators previously chosen to participate in Startup Brasil are foreign companies like Microsoft, who operate Acelera Partners, and national companies 21212, Papaya Ventures and Start You Up.
Following the choice of accelerator projects, another round of Editais is released to select the startup projects to participate in the program. These companies are required to have less than 4 years of activity and submit projects directly related to technology or innovation, whether in terms of the final product or in the process to develop and serve their products.
Foreign startups have their proposals analysed by Apex-Brasil, or the Brazilian Trade and Investment Promotion Agency, and are submitted to a similar evaluation of the one applied to national startups. Factors such as the innovation and consistency of their solution, the expertise of their teams and the viability of their business model are taken into account by Apex-Brasil. The startup projects are evaluated by a team composed of the ministry’s representatives, market experts, researchers, venture capital investors and executives from technology companies, and later delegated to each accelerator based on their profile.
Once chosen, startups can have their members, either Brazilian or foreign, submit for monthly allowance grants from MCTI, based on their academic credentials and market experience in certain sectors such as software development, with a maximum of BRL 200,000 conceded for the entire duration of the projects.
Current Cases and Future Rounds
With the latest round of Startup Brasil starting in 2015, a number of events are currently being held in order for the young companies to share experiences, demonstrate their ideas and business models and attract partners and investors. According to its coordinators, the program has already brought BRL 24,3 million of investments from private companies, divided across 183 accelerated projects.
Some of the most successful startups to emerge from the program include company Shipfy, specialized in the segment of product tracking, which in August 2015 was acquired by national e-commerce product shipping management platform Axado. Another is Dujour, a mobile app developer that allows users to share images of fashion items and accessories which has received significant investments over the last few years.
The Startup Brasil program usually initiates two rounds per year, although none have been initiated to date in 2015. Representatives have stated that a new round of Editais should be released in the near future.