Start-Up Brasil

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The Start-Up Brasil program is a federal initiative developed by the Ministry of Science in Brazil, aimed at empowering startups through funding, acceleration, and market access.
What are the main aims and objectives?
The main aims of the Start-Up Brasil program are to support and foster the growth of innovative Brazilian startups by providing them with funding, acceleration, and market access. The program focuses on connecting startups with international venture capital communities, which enhances their exposure and growth potential. Furthermore, the program seeks to create a favorable environment for Brazilian startups to gain access to the domestic market. Overall, the Start-Up Brasil program seeks to boost the startup sector in Brazil and strengthen its position in the global innovation ecosystem. 
How does the program work?

The main features of the Start-Up Brasil program include: 

  1. IT start-ups: the program is geared specifically towards IT start-ups 

  1. Funding: The program offers individual investments of up to R$200,000 (US$98,971) for up to one year in the form of monthly grants for R&D support. Private funds for each selected company can range from 20,000 Brazilian reais ($9,897) to 1 million reais (or $494,854).  

  1. Attracting Talent: The goal is to attract both domestic and foreign talent to build tech companies within Brazil and create local jobs. 

  1. Business Acceleration: Selected startups will be put through one of nine business accelerators for six months to a year in a public-private partnership. Accelerators provide financial support, mentorship, project management, market validity tests, and access to other investors 

  1. Opportunity-based Entrepreneurship: The program aims to stimulate entrepreneurship driven by educated and technically qualified individuals. 

  1. Long-term Presence: Foreign-owned companies participating in the program must establish a long-term presence in Brazil. Overall a quarter of the winning startups can be foreign-owned.  

  1. Supporting Startups from All Sectors and Regions: The program supports startups from various sectors and regions of Brazil, connecting them to market and investment opportunities free of charge. 

To be eligible for the program, Brazilian and foreign company must have up to 4 years of incorporation. Additionally, a foreign entrepreneur is defined as one who has been living abroad for 3 years.  

What is the overall cost?
Between 2012 and 2020 the program received a total budget of BRL 350 million (approx $69.4 million).  
How was it implemented?

Startup Brasil was implemented by the Ministry of Science, Technology, and Innovation (MCTI), under the Strategic Program for Software and IT Services (TI MAIOR) funding mechanism. The National Council for Scientific and Technological Development (CNPq) and the Brazilian Trade and Investment Promotion Agency (APEX-Brasil) oversee the application process. 

MCTI implemented Start-up Brasil in 2012. Over the course of 2013 and 2014, the program held 4 public calls for entrepreneurs. In 2015, no new entrepreneurs were accepted to the program. Instead, current beneficiaries received resources and guidance to ease the scaling up process. Additionally, Startup Brasil undertook a reassessment of its accelerator partnerships. In 2016, public tenders will resumed for new startup ideas. 

What impact has been measured?

As of 2020, over 200 startups were accelerated through the Startup Brasil program surpassing the initial goal of accelerating 150 startups although it is unclear whether this was achieved by the original goal of 2014.  

Over the first 4 rounds of calls, 183 startups were accepted for acceleration out of 2855 entries. They represent 17 different states across Brazil and 13 different countries. About half of these businesses received further investment from private funders. It was initially reported that for every real the government spent, private investors matched it with R$ 2.80. Government statistics put the number closer to R$ 3.30.  

Policymakers can also point to the impressive development of the startup sector over this time period. The number of Brazilian startups grew by 427% between 2012 and 2020, which could indicate that the program has played a role in fostering the growth of new businesses. The record-breaking $9.4 billion (approx $1.9 billion) raised in 2021 also highlights the success Brazilian startups are now finding in attracting investments. Additionally, the increased presence of corporate venture capital (CVC) arms in Brazil could be associated with the program's focus on fostering collaboration between established corporations and startups. However, no impact studies have been made available that establish a causal link between the program and these improvements in the startup ecosystem.  

What lessons can be learned?

There was some initial criticism regarding the program’s selection criteria for accelerators, which resulted in the exclusion of some prominent firms. Startup Brasil 2.0 has expanded the number of participating accelerators from 9 to 12, which has alleviated some of the concerns. Criteria for entrepreneurs has also been a sticking point. Govenrment grants are funded through CNPq and are based on research and product development. Thus, academic thresholds are rather high. On one hand, the stipulation ensures that new businesses will focus on incorporating cutting edge technology. On the other hand, mandating the involvement of degree-holders may exclude innovators from disadvantaged backgrounds. 

Notes + Additional Context

While Startup Brasil focuses primarily on creating growth within the national ecosystem, it actively seeks to connect internationally as well. It has a healthy partnership with accelerators in New York City and San Francisco, which serves to attract foreign business to Brazil and allow Brazilian entrepreneurs to access opportunities abroad.

  1. Startup Brasil website (Portuguese & English)
  2. Accelerator Guide 2013 (English)
  3. 2014 Public Call (International Startups) (English)
  4. Startup Brasil 2.0 Announcement (English)

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