The startup revolution: bold ideas shaping markets in Brazil and beyond

“If you’re doing something that everyone agrees with, it’s probably not innovative,” mused Brazilian entrepreneur Emiliano Abad, founder of startup Belem AI and former product manager at Loggi and Wellpass. “If you’re doing something different, you need to be slightly exposed to ridicule — or failure.”

Speaking to Revista Problemas Brasileiros and Canal UM BRASIL — both initiatives of the Sao Paulo State Federation of Trade in Goods, Services, and Tourism (FecomercioSP) — during the Web Summit in Lisbon in November, Abad acknowledged the high failure rates of startups and the fact that investors are aware of these risks, yet stressed that backing these ventures remains an attractive proposition, as they are at the forefront of market innovation.

Investing in young, innovative companies always involves uncertainty. “When you work with startups, any venture capital firm or first-stage angel investor knows they’re essentially building a portfolio. They invest in a thousand companies, and only 10 will succeed,” Abad explained.

Despite the high failure rate, the returns from successful startups often outweigh the losses, making it a profitable strategy.

For an ecosystem to encourage risk-taking, failure must be tolerated, Abad argued. “Above all, I believe failure is accepted when execution is done well,” he said. “But if there are execution flaws and no learning process, then it is not necessarily well tolerated.”

Startups in Brazil: a panorama

When it comes to his homeland of Brazil, Abad highlighted a major strength of the country’s startup ecosystem: its large consumer base. “There are 200 million people, and the growth rate is still strong,” he noted. Despite economic ups and downs, the outlook remains positive. “In some areas, such as finance, Brazil is a model,” he argues. “Beyond that, the Central Bank provides a solid foundation for integration, and the fintech ecosystem is excellent.”

Brazil’s startup landscape is also fueled by a vibrant entrepreneurial culture and a growing network of accelerators and investors willing to take risks. The country has seen a surge in fintech and e-commerce startups, capitalizing on a highly digitalized consumer base and a regulatory environment that, in some sectors, encourages innovation.

However, challenges remain, including bureaucratic hurdles and inconsistent regulatory policies, which can slow down expansion and investment. For many startups, navigating these obstacles is as crucial as securing funding or developing breakthrough technologies.

Yet, the resilience and adaptability of Brazilian entrepreneurs continue to drive the ecosystem forward.

Many successful startups have leveraged the country’s complexities as opportunities, creating solutions tailored to local market needs while positioning themselves for international growth. With strong talent pools emerging from leading universities and a cultural mindset that embraces innovation, Brazil remains a promising hub for entrepreneurship in Latin America.

Ecosystems around the world

Speaking in Lisbon, where he is now based, Abad noted that Portugal and other European countries stand out in the startup scene for their perspective on growth.

While the country lacks a large internal market, it boasts exceptional human capital and a historically outward-looking approach. “Startups in Portugal are born thinking about how they will expand into new horizons: the United States, Europe, or even Brazil,” he said.

But for companies seeking to scale, the US remains unmatched. “When it comes to opportunities for innovative businesses, the country is far ahead,” Abad explained. “The US has an unparalleled ability to catapult small companies into massive enterprises. It’s very different from what happens in Europe and Brazil.” He points to major corporations like Meta, Alphabet, and Google — all founded less than four decades ago — as prime examples.