You’re reading The Brazilian Report‘s weekly tech roundup, a digest of the most important news about technology and innovation in Brazil. This week’s topics: Brazil’s push for smart cities. How Brazil is an attractive market for legal tech startups. Didi’s strategy for Brazil. And the robots which could replace political analysts.


Brazil’s push for smart cities

The Brazilian government launched the National

Strategy for Sustainable Smart Cities, which will create indicators and goals to foster innovation in Brazil&#8217;s major urban centers. The National Secretary of Telecommunications and Digital Policies, Vitor Menezes, said a smart city is defined by &#8220;the use of innovative infrastructure to promote the well-being of local communities through four pillars: social, environmental, cultural, and economic.&#8221;</p> <p>During the plan&#8217;s presentation, government officials laid out their first priorities: the installation of security cameras with facial recognition software, crop monitoring technology, systems to reuse rainwater, and urban mobility projects. &#8220;Brazil has an infrastructure problem. So we can&#8217;t talk about smart cities before having the basics done,&#8221; said the secretary.</p> <script src="https://www.buzzsprout.com/299876/1078994-43-brazil-s-infrastructure-woes.js?player=small" type="text/javascript" charset="utf-8"></script> <h4>Smart cities in Brazil</h4> <p>Italian-British company Planet has announced bold plans to build ten smart cities in Brazil by 2022 (it is more accurate to call them &#8216;smart neighborhoods&#8217;, however). The <a href="https://smartcitylaguna.com.br/">pilot project</a> (Laguna Smart City) was built in São Gonçalo do Amarante, in the northeastern state of Ceará. The project cost USD 50 million on a land spanning 330 hectares. So far, 90 hectares have been built, with the first families moving in in January</p> <p>Architecture website Arch Daily wrote a <a href="https://www.archdaily.com/909330/manufactured-cities-a-case-study-of-the-first-smart-city-in-brazil">review</a> on it:</p> <blockquote class="wp-block-quote"><p><em>&#8220;Its success isn’t associated to the amenities of living in a smart city, however, as tempting as the idea of living in a city where many things can be controlled by a phone app, it seems that the most convincing explanation for the numbers is in the land valuation. From August 2015 to November 2017, the residential square meter went up 140.9 percent whereas the commercial went up 218.2 percent. People who bought in 2015 seemed to have made a smart investment.&#8221;</em></p></blockquote> <hr class="wp-block-separator"/> <h2>Brazil&#8217;s enormous potential for legal tech companies</h2> <p>Brazil&#8217;s Justice system is a behemoth. There is a backlog of 80 million (yes, million) cases, which command the expenditure of 1.4 percent of the country&#8217;s GDP on courts, judges, and public defenders. The number of lawyers is in the tens of millions and, every year, the national bar association puts 30,000 new lawyers in the market.</p> <p>These numbers make Brazil one of the most promising markets for legal tech companies—which can mean two things: (1) helping facilitate the practice of law through technology, or (2) using technology to help consumers access legal expertise or access justice.&nbsp;</p> <p>In 2018 alone, the number of legal tech startups in Brazil rose 240 percent to 150, making it one of the fastest-growing markets for innovation. Last year, Brazil received the biggest innovation center for the law market in Latin America, the Future Law Innovation Center—which is supported by Thomson Reuters.</p> <p>Brazil is considered to be a mature market for legal tech solutions—not only due to its sheer size. Since 2006, the Justice system has made strides in digitalizing cases. In 2010, the Superior Court of Justice became the world&#8217;s first fully digital national court.</p> <p>One area in which many companies are operating is in litigation between private parties. Brazil has a paltry settlement rate of just 17 percent (in some U.S. states, <a href="https://scholarship.law.cornell.edu/cgi/viewcontent.cgi?article=1202&amp;context=facpub">that rate reaches 87 percent</a>). Legal tech companies can help push these levels up through data analysis. Two parties can more easily reach a settlement if they know the average figures for similar cases. Other firms focus on easy-to-understand legal counseling, helping users navigate the myriad documents and laws that form Brazilian bureaucracy.</p> <p>This digital revolution in Brazilian law is a major threat to small firms, as writes Zoë Andreae, CEO of legal tech firm LECARE GmbH. &#8220;Small law firms will face great threats of being displaced by legal tech innovations that automate and replace activities that make up the core of [their] business.&#8221; Here&#8217;s a map of Brazil&#8217;s legal tech ecosystem, by AB2L, the local association for legal tech firms:</p> <figure class="wp-block-image"><img src="https://brazilian.report/wp-content/uploads/2019/08/Slide3-1024x576.png" alt="legal tech companies brazil" class="wp-image-22011" srcset="https://brazilian.report/wp-content/uploads/2019/08/Slide3-1024x576.png 1024w, https://brazilian.report/wp-content/uploads/2019/08/Slide3-300x169.png 300w, https://brazilian.report/wp-content/uploads/2019/08/Slide3-768x432.png 768w, https://brazilian.report/wp-content/uploads/2019/08/Slide3-610x343.png 610w, https://brazilian.report/wp-content/uploads/2019/08/Slide3.png 1280w" sizes="(max-width: 1024px) 100vw, 1024px" /></figure> <hr class="wp-block-separator"/> <h2>How Didi wants to dethrone Uber in Brazil</h2> <p>Chinese ride-hailing company Didi came to Brazil early in 2018, after <a href="https://brazilian.report/money/2018/01/04/uber-brazil-didi-chuxing-99-app/">purchasing Uber&#8217;s main competitor, 99</a>. The move was part of its plan to take over Latin America, one of the regions with the fastest growth of mobile internet penetration rates. It is also where Uber is growing fastest—with a presence in 200 cities across 15 countries.</p> <p>Didi, however is waiting in the wings to take over. The company is present in over 1,000 Brazilian cities, and in 32 Mexican regions where half of the population lives. Last month, Didi&#8217;s Latin American CEO Mi Yang announced expansion plans for Chile and Colombia.</p> <p>But Didi&#8217;s plan goes further than ride-hailing. The company wants to offer financial services to facilitate exchanges between users and drivers. Didi plans on launching a form of card system, which would accumulate balances to be used as a regular credit card. Didi&#8217;s international business officer Zheng Bu explained: &#8220;In Brazil, many people can drive, but aren&#8217;t allowed to be app drivers as they don&#8217;t have bank accounts.&#8221;</p> <p>In Brazil, Colombia, and Mexico, no more than 30 percent of the population has a credit card—which would open a highly profitable lane for the Chinese company.</p> <hr class="wp-block-separator"/> <h2>Who needs analysts when you can have robots?</h2> <p>During months of intense negotiations in Congress around the pension reform, startup Arkera followed the process from a distance, at its London headquarters. Arkera&#8217;s algorithm closely monitored comments in Brazilian newspapers and government websites, cross-referencing them with statements made by lawmakers on the issue.&nbsp;</p> <p>Weeks prior to the actual House floor roll call vote, the data-driven company predicted—almost exactly—the outcome. Arkera&#8217;s clients (hedge funds in England and in New York) bet on the Brazilian Real, which in May was at its lowest level in eight months. Since then, the Brazilian currency gained 8 percent against the U.S. Dollar.</p> <p>The company, which has raised GBP 4 million in funding last year, believes its robots are capable of filtering political noise and accurately determining the outcome of important congressional votes in distant countries. Last year alone, UK companies slashed their budgets on research by 30 percent—opting for analysts looking at political development from afar. These professionals could soon be replaced.</p> <hr class="wp-block-separator"/> <h2>Video games</h2> <p>The Senate approved a proposal to amend the constitution creating tax exemptions for video games and consoles. The bill initially proposed reducing tariffs from 72 to 9 percent, but senators chose instead to erase them all—in a push to stimulate the sector. It remains unclear whether the bill affects only Brazilian companies, or if foreign players with local subsidiaries will also benefit. The bill must still be analyzed by the lower house before it may come into force.</p> <hr class="wp-block-separator"/> <h2>Fifa 20</h2> <figure class="wp-block-image"><img src="https://brazilian.report/wp-content/uploads/2019/08/fifa-20-volta-football-gameplay-1024x575.jpg" alt="" class="wp-image-22013" srcset="https://brazilian.report/wp-content/uploads/2019/08/fifa-20-volta-football-gameplay-1024x575.jpg 1024w, https://brazilian.report/wp-content/uploads/2019/08/fifa-20-volta-football-gameplay-300x168.jpg 300w, https://brazilian.report/wp-content/uploads/2019/08/fifa-20-volta-football-gameplay-768x431.jpg 768w, https://brazilian.report/wp-content/uploads/2019/08/fifa-20-volta-football-gameplay-610x342.jpg 610w, https://brazilian.report/wp-content/uploads/2019/08/fifa-20-volta-football-gameplay.jpg 1600w" sizes="(max-width: 1024px) 100vw, 1024px" /><figcaption> Fifa 20</figcaption></figure> <p>The new Fifa 20 game, to be launched on September 27, introduces its new &#8216;Volta&#8217; gameplay mode—with games being played on &#8220;street&#8221; courts, similar to its previous standalone title, Fifa Street. One of the playable courts will be an arena in the heart of a Rio de Janeiro favela. Another 15 cities will be featured: Amsterdam, London, Paris, Tokyo, Cape Town, Barcelona, Miami, Buenos Aires, Lagos, Venice, New York, Rome, Mexico City, and Berlin.

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MoneyAug 09, 2019

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BY Gustavo Ribeiro

An award-winning journalist with experience covering Brazilian politics and international affairs. His work has been featured across Brazilian and French media outlets.