Pando

Moving to the Valley: 'I Want to Help Brazil, But Brazil Cannot Help Me Now'

By Sarah Lacy , written on April 16, 2012

From The News Desk

Three years ago I started on a forty-week journey through a dozen emerging markets, seeking the best entrepreneurs the world had never heard of. I found plenty, and several of my favorites were in Brazil.

At the time, I was stunned that almost no one from Silicon Valley was investing in Brazil. There was huge interest in China and India and some bubbling interest in Russia, but almost no one was looking at the other BRIC.

While the overall growth rate of Brazil hasn't been as high as China, India or Russia, the country's infrastructure is also more developed. Not to say investing in any emerging market is easy, but given the advantages in time zone and relative cultural similarities, the total lack of interest in Brazil seemed puzzling.

Over the last three years that has flipped completely. Several firms are getting aggressive on Brazil, most notably Redpoint Ventures, which has done several deals there, and many more are making exploratory trips. I know this because I get emails -- weekly now -- asking for intros.

While exploratory trips are a long way from actual dollars flowing in a meaningful way, there's suddenly a lot of hype around Brazil as the next market the Valley wants to court. Anecdotally, Brazil keeps coming up in conversations as "the next hot market," as if it has suddenly sprung up out of nowhere.

As far as I can tell, little has changed in the country over this three-year period. Brazil has huge opportunity, but there are few tech companies success stories to point to and high-growth entrepreneurship is still a relatively new concept in the country. Just as the void of activity was puzzling three years ago, the sudden swirl of hype out of nowhere is equally puzzling.

The same question underlies both the time when no one cared and the time when everyone is talking about it: Is Brazil ready to be the next hot market?

There are clearly great entrepreneurs there, and one of them is IBM Global Entrepreneur of the Year competition winner Gustavo Lemos. He is the CEO of IXDP, a company that replicates the shopping analytics you can get online in the real world. The company grew out of his own experience in his family-owned business, but he soon realized this is a global opportunity -- and a competitive one.

After years of insisting he didn't need to move to the Valley, he's recently reversed his thinking completely. We caught up with Lemos while he was in town meeting with investors, and wrangling with lawyers over how to legally move his company here.

Why the reversal? As he explains in the video below, Gustavo is proud of his country. It has come a long way over the past few years, catching lots of attention from investors worldwide. But the resources aren't quite there yet to build a global online analytics company. Between Brazil and his company, he had to chose the company.