Tech Roundup, Sep. 13, 2019 | Meet Quinto Andar, Brazil’s newest unicorn

. Sep 13, 2019
quinto andar startup brazil

You’re reading The Brazilian Report‘s weekly tech roundup, a digest of the most important news on technology and innovation in Brazil. This week’s topics: Brazil gets world’s first ISO certification on innovation. The country has a new unicorn, Quinto Andar. Chinese behemoth invests in innovation hub. The IPO of XP Investimentos. Happy reading!

Meet Quinto Andar, Brazil’s newest unicorn

The real estate sector is not what comes

to mind when talking about innovation. Brazil&#8217;s most renowned startups are concentrated either in finance, logistics, or agriculture. But Quinto Andar, an app focused on connecting real estate owners and tenants, has invested in the sector. It has been enough to qualify Quinto Andar as Brazil&#8217;s newest unicorn, after raising USD 250 million in a fourth round of investment led by the <a href="">omnipresent Asian investment group SoftBank</a>.</p> <p>Renting an apartment in Brazil can be a challenging process, requiring financial guarantees and numerous <a href="">administrative hoops</a>. Quinto Andar aims to eliminating steps in this process, slashing fees from up to 40 percent of rent to roughly 15 percent, and cutting down the timeframe for closing a deal from 30 to three days.</p> <p>The strategy may enhance the risks for owners—but also represents a major opportunity. Gabriel Braga, Quinto Andar&#8217;s founder, has estimated the residential real estate business is worth BRL 200 billion—and it will only go up. In October 2018, the company said it had intermediated one apartment visit every two minutes—doubling its 2017 performance. Today, about 4,500 rental contracts are closed every month through the platform.</p> <p>The company was initially seen as a potential wrecking ball to the sector by real estate agencies, but they have decided to team up with the startup. Quinto Andar now offers exclusive services to 15 such agencies.&nbsp;</p> <p>Quinto Andar currently operates in 25 cities in the three wealthiest Brazilian macro-regions: the Southeast, South, and Center-West. Next year, the company will establish a footprint in the North and Northeast. Quinto Andar also plans to invest heavily in software development, improving its current app, and in hiring new executives to lead its over 1,000 employees.</p> <p>But the main reason for the new round of investments—which came only nine months after the previous one of BRL 250 million—is Quinto Andar&#8217;s plan of international expansion. The new Brazilian unicorn has been coy about its plans, but one thing is certain: internationalization will come through Latin America.</p> <hr class="wp-block-separator"/> <h2>Brazil gets world&#8217;s first ISO certification on innovation</h2> <p>In July The International Organization for Standardization launched its ISO 56002 certification in innovation management—and the first company to get it was a Brazilian one: CSI Locações, a Ceará-based tech company, alongside a water company from Dubai.</p> <p>The ISO 56002 seal involves six pillars: visionary leadership, insight management, risk management, adaptive culture, the creation of value and, finally, the approach to processes. &#8220;The biggest challenge is to create a culture of innovation, so that innovations can happen in a systematized fashion, instead of being sporadic. We first need to develop an innovation mindset to then create processes to guarantee its efficacy,&#8221; said Alexandre Pierro, a Brazilian member of the ISO committee.</p> <p>Currently, the ISO 56002 seal is within the reach of any company which seeks to guarantee that its management processes follow the best global practices with a focus on innovation. &#8220;It will be a great opportunity to transform Brazilian companies, disseminating ideal innovative conduct to confront the challenges we face every day. Companies have already realized that the world has changed, and that they need to change along with it to remain active,&#8221; added Mr. Pierro.</p> <hr class="wp-block-separator"/> <h2>Chinese behemoth invests in innovation hub</h2> <p>CTG Brazil, a local subsidiary of Chinese infrastructure group China Three Gorges, has announced the creation of its own innovation lab in Brazil. While the lab will be located in São Paulo, the initiative was a partnership with the Santa Catarina Tech Association (Acate), one of Brazil’s main entities to foster entrepreneurship.</p> <p>For a company of CGT&#8217;s size, the investment is quite <a href="">modest</a>: BRL 2.4 million, with 20 percent coming from the company&#8217;s own funds, and being financed with a mandatory budget for innovation imposed by the National Electric Energy Agency.</p> <p>The company is keen on developing digital solutions for energy commercialization, adding value to its offer of services. CTG is currently Brazil&#8217;s second-largest private energy generator and is already investing BRL 3 billion in the modernization of hydroelectric plants in Jupiá (Santa Catarina) and Ilha Solteira (São Paulo).</p> <p>The partnership with Acate will last for an initial two years. Within the next six months, the entity&#8217;s team will carry out an &#8220;immersion&#8221; within CTG, mapping its main challenges and systems used.</p> <hr class="wp-block-separator"/> <h2>Congress to summon Big Tech executives</h2> <p>A parliamentary investigation committee in Brazil&#8217;s Congress will invite executives from a number of tech giants to provide clarifications about the spreading of fake news online. Representatives and senators have summoned the legal representatives of WhatsApp, Google, Twitter,&nbsp; Facebook, YouTube, and Telegram.</p> <p>The committee was set up to investigate the propagation of fake news on social media in Brazil, particularly in connection to last year&#8217;s presidential election. Senator Flávio Bolsonaro—the president&#8217;s eldest son—is against the committee and voted against inviting the Big Tech executives to be heard by Congress. He claims there is no reason for the committee to exist, and by summoning representatives of social media companies, the members of Congress are &#8220;searching for a determined fact, if there are any.&#8221;</p> <p>The committee will also spread its focus into topics such as cyberbullying and data privacy, inviting a representative from The Intercept Brasil (which recently promoted the leak of a massive amount of private messages shared between important figures of the Car Wash anti-corruption investigation) and Lola Aranovich, a professor from the Federal University of Ceará who has been consistently targeted by threats online.</p> <p>This push from Brazil&#8217;s Congress goes in line with moves in Europe and the U.S., where Big Tech has also come under the spotlight in recent years, and calls for more regulation have gained steam. Facebook CEO Mark Zuckerberg was summoned to the U.S. Senate last year in connection with the Cambridge Analytica scandal.</p> <hr class="wp-block-separator"/> <h2>The IPO of XP Investimentos</h2> <p>Brokerage firm XP Investimentos will go public. The company, founded in 2001, could raise around USD 2.5 billion, which will help fund the creation of XP&#8217;s own bank. Two years ago, 49.9 percent of XP shares were purchased by Itaú, Brazil&#8217;s biggest privately-owned bank. For more information on the deal, check our <a href="">September 13 Daily Briefing</a>.

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Gustavo Ribeiro

An award-winning journalist, Gustavo has extensive experience covering Brazilian politics and international affairs. He has been featured across Brazilian and French media outlets and founded The Brazilian Report in 2017. He holds a master’s degree in Political Science and Latin American studies from Panthéon-Sorbonne University in Paris.

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