Brazil is better than its story

It's our second-to-last newsletter of the year (seriously, where did the time go?), and I want to use it to say something I've been sitting with for a while. As someone who's spent years studying this ecosystem from the outside looking in—and who genuinely believes in it—there's an elephant in the room that doesn't get talked about enough.

And that elephant is this: the biggest skeptics of Brazilian tech aren't foreign investors. They're Brazilian entrepreneurs—and that self-sabotage is costing them real money. Not in execution—Brazilian operators are absolutely world-class. In narrative. In how they talk about their own market, their own opportunity, their own inevitability. They're paying a tax that American founders don't even know exists.

When an American founder walks into a room, they sell the dream. The market is massive. The timing is perfect. The team is world-class. Every slide radiates inevitability—this company will win.

When a Brazilian founder walks into the same room, they often open with caveats. "You know how Brazil is..." The market is complex, volatile. The regulatory environment is challenging. Competition is fierce. They're essentially apologizing for their own opportunity before making the case for it.

I'm not arguing for delusion. American founder optimism can tip into reality distortion, and that has its own costs. But there's a vast middle ground between irrational exuberance and preemptive surrender. It's the difference between selling a cow by describing her milk production, her lineage, and her health—versus opening with a detailed inventory of every spot on her hide.

This isn't just a cultural quirk. It's a competitive disadvantage that suppresses valuations, limits capital flows, and creates a self-fulfilling prophecy of skepticism. What makes it particularly frustrating is that this skepticism is increasingly disconnected from quantitative reality.

RUN THE NUMBERS

If you set aside the inherited narrative and run Brazil through the same filter any global tech investor uses: market size, infrastructure maturity, operator quality, capital availability, exit pathways, here's what comes back.

The rails are built

Brazil is not "emerging" in the way the word is often used. It is a single-language, continent-scale market of over 200 million people, with the fifth-largest internet population on earth—183 million users. Digital penetration is deep: payments, commerce, financial services, logistics, and mobility are already part of daily life.

The infrastructure caught up too. Microsoft committed $2.7 billion to expand cloud and AI infrastructure in Brazil. AWS pledged $1.8 billion through 2034. Pix—the instant payment system—processed 68 billion transactions in 2024, is used by 93% of Brazilian adults, and has effectively killed cash. The rails are built.

Unlike fragmented regions that require stitching together dozens of regulatory regimes and cultures, Brazil offers scale with coherence. When something works here, it works at meaningful scale.

Scale is no longer theoretical

The most underappreciated fact about Brazil's tech ecosystem is that scale is no longer theoretical.

Brazil now has dozens of companies generating $50–100M+ in ARR, growing 25–40% year over year, and operating at or near profitability. These are not paper unicorns. They are real businesses with real customers, real margins, and real operating discipline.

This matters more than any headline-grabbing funding round. Scaled companies anchor ecosystems. They normalize success. They create acquisition targets. They recycle experienced operators back into the system. Look at iFood, Stone, Mercado Libre, QuintoAndar—each one now a talent factory, spinning out founders and operators who carry institutional knowledge into new companies.

As Bruno Maimone of Warburg Pincus—one of the most active growth investors in the region—observed:

"In 2018, Brazil had six technology companies generating $100 million in ARR. Today, that number has increased six-fold."

Markets cross into maturity when outcomes become repeatable, not exceptional. Brazil has reached that point.

Allocation, not exploration

When the world's most disciplined growth investors start concentrating in a market, it tells you something about the underlying risk calculus.

Warburg Pincus, Summit Partners, General Atlantic, Mubadala, Bond Capital—these are allocators whose reputations are built on saying "no" far more often than "yes." And they're writing checks in Brazil at a scale historically reserved for far more established markets. Here are just a few recent examples:

• Contabilizei raised ~$125M from Warburg Pincus

• VOLL secured ~$120M from Warburg Pincus

• Celcoin raised $125M led by Summit Partners

• CERC raised ~$106M from Mubadala Capital

• Asaas attracted ~$148M backed by Bond Capital

These are not tourists chasing momentum. The question is no longer whether Brazil can produce scaled technology companies, but how many—and how quickly.

Liquidity lives inside the system

For years, Brazil was judged through a narrow lens: the IPO window.

That was always a flawed metric. Mature markets are not defined by IPO frequency alone; they are defined by liquidity optionality—the number of credible ways capital can exit, recycle, and re-enter the system.

By that measure, Brazil looks very different today.

Its M&A market has deepened, driven by both global acquirers and increasingly sophisticated local buyers. This shift is important because acquisitions, not IPOs, are the dominant exit path in most functioning tech ecosystems—although VCs hate to admit that and shoot for the stars in their scenario planning.

Liquidity no longer sits outside the system, waiting for a rare market window. It operates inside it.

That changes the risk profile. Downside protection becomes real. Upside becomes legible.

The evidence is visible in the transactions themselves. Brazil has become one of the most active M&A markets in emerging technology, with deals that reflect long-term underwriting rather than opportunistic timing:

• Visa acquiring Pismo for approximately $1 billion

• Prosus, through iFood, acquiring Despegar for roughly $1.7 billion in cash

• Visma acquiring Conta Azul for around $300 million

These are not speculative bets. They are the result of buyers doing the hard work of understanding Brazil's operating system—its payments rails, regulatory logic, and distribution dynamics—and committing capital accordingly.

THE $1 BILLION REALITY CHECK

There’s a question I've started asking when someone leans too hard on "Brazil risk":

How many technology companies in Brazil generate over $1 billion in annual revenue?

Most people guess two or three. The real answer is probably 10 to 15. Nubank. Mercado Libre. iFood. PicPay. CloudWalk. Stone. PagSeguro. TOTVS. Not valuation. Revenue.

What makes it even more striking is that most of these companies are under 15 years old. The ecosystem itself is barely older.

That's not a market with potential. That's a market with receipts.

IT’S TIME TO UPDATE THE STORY

It's easy to look at the US and see greener grass. But no market is perfect. 

The US has its own distortions—overcrowded categories, unsustainable burn rates, valuations detached from fundamentals. But American founders don't open pitches with those caveats. They position challenges as moats and complexity as competitive advantage.

Brazilian founders have earned the right to do the same. The complexity that once held Brazil back now functions as a barrier to entry. The regulatory maturity that required years of painful iteration is now a completed foundation others can't easily replicate. The operators who learned hard lessons in the first wave are now deploying those lessons at scale.

The story has changed. The storytelling is lagging by about five years.

So the next time you walk into a pitch, try this: lead with the evidence of what Brazil has become, not the memory of what it was.

Let the skeptics discover the challenges—they will anyway. Your job isn't to do their due diligence for them. Your job is to make the case for the opportunity.

Because the opportunity is real. Six times more companies at $100M ARR than seven years ago. Billion-dollar-revenue businesses built in under two decades. Global growth capital allocating at scale. An M&A market that actually produces liquidity.

That's not a market that needs apologizing for.

That's a market that needs founders willing to tell its story with the confidence it now deserves.

Thanks for reading,

Olga 

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