Investment in Brazilian startups has risen since 2024, after 2023 became known as the “startup winter.” Several factors led to a decline in venture capital funding, including higher U.S. interest rates, stricter requirements for business models, and the aftershock of 2021, a record year for risk investments in Brazil and globally. After this peak, which lasted until mid-2022, a downturn forced startups to rely on their own capital, leading to revised business plans and layoffs.

According to KPMG data, venture capital investment in Brazil reached US$2.25 billion (R$11.9 billion) last year, compared to US$2.1 billion (R$11.1 billion) in 2019 and the record US$6.66 billion (R$35 billion) of 2021. In the first half of this year alone, investment volume reached US$1.25 billion (R$6.6 billion), already more than half of last year’s total.

The pandemic period was a turning point in the startup investment market. The previous wave of investor euphoria shifted, giving way to stricter scrutiny of business models, with investors moving away from companies without clear cash flow generation.

Fintechs, startups in the financial sector, continue to stand out among innovative Brazilian businesses, attracting investors. However, the phase of consumer-focused startups receiving oversized checks has ended. The trend now is to invest in B2B (business-to-business) startups, which face fewer default risks and offer greater predictability in revenue and profit.

Leo Monte, president of the Brazilian Startup Association (Abstartups), highlights that São Paulo’s startup ecosystem already shows significant maturity, crucial for continuous development and attracting capital. With that, he says, investors can weed out the opportunists who create businesses just to raise funds.

“It’s no longer about how many small checks I write for different startups, but about how many mature startups exist, which allows me to make larger, more selective investments. This is a global trend,” says Monte.

Brian Requarth, CEO of the Latitud fund, notes that while fintechs remain strong, there are also opportunities in other areas, stressing that Brazil has startups and entrepreneurs capable of building successful businesses.

“Segments such as logistics technology, procurement, and tax automation are also gaining ground because they connect directly to the operational economy, in a capital-restricted environment, efficiency sells. We see investor appetite moving toward models like SaaS for infrastructure, data-embedded platforms, and vertical applications (focused on a specific industry),” he states.

In the first half of this year, Clara, a corporate expense management startup, raised US$80 million from General Catalyst's Customer Value Fund (CVF). The company had already raised US$70 million in 2021 with Coatue, which propelled it to unicorn status, a valuation above US$1 billion.

Gerry Giacomán Colyer, Clara’s CEO and cofounder, explains that the company has been focusing on operational efficiency and customer acquisition, with client referrals as an important growth engine.

“We run a business with an efficient way of acquiring new clients and driving growth, which is why we were able to secure this capital. The funding will be 100% dedicated to further scaling our growth. It combines expansion and continuous product development, new features to help clients manage all their payments. This way, the entire payment workflow can run in the cloud,” Colyer says.

He adds that investors are now seeking exponential growth opportunities and maturity in business strategy.

“The climate has changed, and investors are looking for companies that grow fast but are also financially and operationally excellent. There is a sense that the market will consolidate around companies that become platforms, and we want to be that for our clients,” Colyer states.

QI Tech, a fintech specializing in B2B financial solutions, is the latest company to reach unicorn status. The company received investments from General Atlantic (also a Nubank backer) that exceeded R$1 billion, and in April, an extension of the funding round pushed it past the US$1 billion valuation mark.

Marcelo Buosi, QI Tech’s Chief Operating Officer (COO), says Brazilian fintechs attract investors because of the market demand for digital financial solutions. “The B2B segment in fintechs grows because there’s a clear opportunity to generate large-scale impact: companies that provide financial infrastructure, like QI Tech, enable organizations of different sizes and industries to quickly and securely create or expand financial products with built-in compliance,” he explains.

According to Buosi, recent involvement of some fintechs in illegal activities, revealed by the “Carbono Oculto” (Hidden Carbon) operation launched by São Paulo’s Public Prosecutor’s Office with support from the Federal Police and Federal Revenue Service, should separate legitimate players from bad actors in the sector.

“Increased oversight brings more credibility to the ecosystem and protects customers and investors. Responsible innovation must go hand in hand with governance and compliance,” he says.

The wave of artificial intelligence (AI) has also helped Brazilian entrepreneurs create new businesses. One example is Jumpstart, which helps people emigrate, focusing specifically on U.S. immigration. The startup specializes in merit- and resume-based immigration petitions, which are lengthy processes (500 to 2,000 pages). AI allows the company to identify patterns and seasonality in professions and types of incubators accepted by immigration authorities, something humans would struggle to do. This way, Jumpstart is developing formulas tailored to different client cases.

AI has allowed Jumpstart to offer services 50% to 60% cheaper than major law firms. Major law firms usually charge between US$20,000 and US$30,000 for a Green Card, while Jumpstart charges between US$10,000 and US$12,000.

The company’s AI relies on fine-tuning existing models, such as ChatGPT and Gemini, and adapting them to the specific needs of the immigration sector.

“We want the immigration process to be as seamless and trustworthy as services offered by Nomad, Nubank, or BTG for high-income clients. Today, immigration services are extremely exhausting, with a saturated market and no truly trusted brand,” says Fabiano Rocha, an ITA-trained engineer and founder & CEO of Jumpstart.

São Paulo has been consolidating itself as one of the most essential innovation ecosystems in the world. Brazil is already considered the country’s capital of innovation. Recently, the city entered the list of the world’s 50 most relevant hubs in science and technology, climbing 24 positions in the preview of the Global Innovation Index. With this leap, São Paulo went from 73rd to 49th place — the only Latin American city in the top 100.

This placed São Paulo ahead of cities such as Melbourne (52nd), Stuttgart (54th), Milan (56th), Atlanta (59th), Montreal (62nd), Frankfurt (64th), Miami (67th), Cambridge (69th), Rome (82nd), Lyon (90th), and Manchester (94th).

Rodrigo Goulart, São Paulo’s secretary of economic development and labor, says the city has been implementing measures to foster innovation, including programs to accelerate startup ecosystems and reduce ISS tax rates from 5% to 2% for specific tech sectors.

“We have added new measures to the city’s entrepreneurship goals, focusing on young entrepreneurs and longevity. We also support senior professionals in technology to ensure these programs are not just temporary policies of one administration. The idea is to turn them into long-term public policy,” he explains.

São Paulo has initiatives like Green Sampa, Vai Tec, Sampa Games, and the coworking network Teias.

According to a report by Contabilizei, based on Federal Revenue data, company creation in Brazil has been rising, following the same trend as venture capital investments in startups.

This year, 4,700 new tech companies were created in Brazil, a 25% increase compared to last year. Most are service-sector businesses that expect to exceed the R$81,000 annual MEI threshold, with 88% of the new companies classified as micro or small businesses.

Guilherme Soares, executive vice president of operations at Contabilizei, notes that technology professionals in Brazil have an entrepreneurial history, with many founding companies that provide services to multiple clients.

“Greater investment in startups expands the tech services market. Looking at the data, companies cut spending in 2023 during the startup winter, when liquidity was limited. That’s when we saw a drop in new tech company registrations,” he says.

In 2024, São Paulo registered the highest number of new tech companies in Brazil, with 15,300, followed by Belo Horizonte (2,120) and Curitiba (1,680).

Contabilizei’s client base grew 40% from 2023 to 2024, surpassing 30,000. Their clients’ combined revenue reached R$6.5 billion, up 38% from the previous year. Among them, nearly 1 in 5 (19%) issued invoices abroad, up 33% yearly, with international revenue totaling R$2.3 billion in 2024, a 46% increase.

According to the iMonitor IT survey by Advance, the most significant opportunities for IT companies in Brazil are currently in artificial intelligence, digital marketing, cloud computing, cybersecurity, and data analytics.

Despite global growth in AI startup investments, Latin America has been capturing a shrinking share of this billion-dollar market. Data from CB Insights between 2021 and 2025 shows that while global funding totaled US$461.9 billion, the region secured only US$2.5 billion, just 0.54% of the global total. In 2025 alone, through June, global AI investments reached US$116.1 billion, compared to only US$100 million in Latin America.

Among the Brazilian startups that stood out in this still timid regional landscape, Blip (chatbots) received the largest round, US$60 million in Series C funding led by SoftBank, Warburg Pincus, and Accel. Others include Payface (facial biometrics for payments), which raised US$10 million with BTG Pactual participation, and Jota (legal and political data), which secured US$9 million in a seed round with Maya Capital, Alter Global, and Big Bets. Startups such as Neofin (corporate finance), Teachy (education), and Advolve (advertising) also ranked among the largest rounds, proving that despite structural challenges, Brazilian entrepreneurs are still attracting capital for AI-based solutions.

Experts say Latin America’s smaller share of AI funding stems partly from regional currency devaluations. Another factor is that startups in Brazil, Argentina, Chile, and Colombia often struggle to build businesses viewed by global investors as disruptive.

This disparity is also shown in deal counts: globally, there were 23,542 AI funding rounds between 2021 and June 2025, versus only 294 in Latin America. Despite rising global demand for machine learning, natural language processing, and other automation technologies, this highlights the region's difficulty in attracting capital for AI-driven businesses.

Another indicator of the gap is the average check size. While the global average per round was US$19 million, in Latin America, it was just US$8 million. In 2025, the difference grew even larger: US$41 million globally per round versus only US$2 million in the region.

The United States continues to lead global AI investments, concentrating a large share of venture capital in the sector. Although the report does not detail country-level data, industry experts point to the U.S. market as the primary destination for AI venture capital. The concentration of technical talent, infrastructure, access to data, and supportive public policies is a decisive factor behind this leadership.

This article is a summarized adaptation of content originally published by Estadão. To read the full version, visit the original site: estadao.com.br