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Tech Roundup: Pandemic spurs boom in health tech investments

. Nov 13, 2020
health tech investments Image: Wan Wei/Shutterstock

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: Brazilian health techs thrive amid pandemic, local restaurants plan to foster competition in deliveries, and the startup that wants to foster Latin America’s entrepreneurial ecosystem. 

Pandemic spurs boom in health tech investments 

Brazilian startups have largely braved the economic storm created by the Covid-19 pandemic,

but one sector in particular has thrived: health techs. A new report by think tank Distrito brings astonishing data: between January and October, health techs raised USD 93 million in investments — almost 50 percent more than in all of 2019.</p> <ul><li>When it comes to the number of investments, 2020 could break last year’s record (45). So far, 42 operations have been confirmed — with two months still to go.</li><li>In October alone, four investment operations raised USD 25 million.&nbsp;</li></ul> <div class="flourish-embed flourish-chart" data-src="visualisation/4339396"><script src="https://public.flourish.studio/resources/embed.js"></script></div> <p><strong>Health techs&#8217; profile.</strong> Brazil currently has 577 health techs, most of them created between 2015 and 2018. The lack of newcomers is accredited to the sheer complexity of the sector.</p> <ul><li>The main areas of specialization are management and electronic medical records (25%), information access (17%), marketplaces (13%), and telemedicine (11%).</li><li>Forty-three percent of firms are headquartered in the state of São Paulo, the country’s biggest tech and corporate hub.</li></ul> <hr class="wp-block-separator"/> <h2>Brazilian restaurants want their own delivery platform</h2> <p>While delivery services gave bars and restaurants a lifeline during the pandemic, the sector is wary of its total dependence on <a href="https://brazilian.report/coronavirus-brazil-live-blog/2020/06/29/latin-american-delivery-app-couriers-to-join-brazilian-strike/">app companies</a>, due to their fees of up to 27 percent and history of <a href="https://brazilian.report/latin-america/2020/07/27/understanding-latin-america-wave-informal-employment/">anti-competitive practices</a>. In an attempt to boost competition, the Brazilian association of bars and restaurants (Abrasel) wants to launch its own platform, to connect establishments from all over the country to all apps.</p> <p><strong>How will this work?</strong> When customers look for a specific restaurant or dish, the platform would show all places available for delivery. The restaurant would then pay a pre-established delivery fee.</p> <ul><li>A new app by and for restaurants would only be available in 2021 at the earliest, due to technology, compliance, and logistics issues.</li><li>Abrasel also plans to adopt the new <a href="https://brazilian.report/podcast/2020/11/04/explaining-brazil-podcast-banking-instant-payment-pix-up-steam/">Central Bank instant payment system PIX</a> as both a payment method and messaging system. The bank, however, reportedly says <a href="https://valor.globo.com/empresas/noticia/2020/11/12/restaurantes-preparam-plataforma-de-delivery.ghtml">talks have not begun</a>.</li><li>Retail giant Magazine Luiza — which recently purchased delivery app AiQFome — and Google were speculated as potential partners but both said they are not a part of the project.</li></ul> <p><strong>How will this help restaurants? </strong>Abrasel chairman Paulo Solmucci says having a single platform managing all orders will make management easier. It could also foster new entrants in the deliveries market, allowing for more competition.&nbsp;</p> <hr class="wp-block-separator"/> <h2>This startup wants to boost entrepreneurship in Latin America</h2> <p>This week, Latin America gained a new startup hub: the entrepreneurial community Latitud. Founded by Brian Requarth, cofounder of the real estate marketplace Viva Real, former Duolingo Marketing VP Gina Gotthilf, and former executive at shopping intelligence startup Escale Yuri Danilchenko, the new company aims to provide mentorship for startup founders and connect them to investors.&nbsp;</p> <p><strong>Backgrounds. </strong><a href="https://latitud.com/">Latitud</a> is based on the founders’ experience as entrepreneurs and mentors. Mr. Requarth, for instance, has been an angel investor for famous Brazilian startups such as Quero Educação and Quinto Andar.&nbsp;</p> <p><strong>Online-based.</strong> Latitud does not have a physical space; the idea is to digitally connect people all over Latin America. The company will kickstart operations with a network of roughly 50 mentors and 100 companies selected to be part of the mentorship program. <a href="https://link.estadao.com.br/noticias/inovacao,ex-executivos-de-viva-real-e-duolingo-lancam-comunidade-para-startups-latinas-latitud,70003510835">According to</a> newspaper Estado de S.Paulo, 37 percent of the selected companies are led by women — in an effort to narrow the gender gap in a traditionally homogeneous field.</p> <hr class="wp-block-separator"/> <h2>Take note</h2> <ul><li><strong>Digital transformation. </strong>After Magazine Luiza’s plethora of acquisitions, it is now time for competitor Via Varejo to go shopping. In an effort to boost its digital transformation, the retailer <a href="https://link.estadao.com.br/noticias/inovacao,via-varejo-anuncia-investimento-no-distrito-empresa-de-inovacao-aberta,70003507242">acquired</a> a 16.7 percent stake in innovation think-tank Distrito, which owns startups hubs in São Paulo and Curitiba. The idea is to have access to the ecosystem, instead of picking one startup to acquire at a time.&nbsp;&nbsp;</li><li><strong>Logistics 1.</strong> Meanwhile, Amazon Inc opened <a href="https://br.financas.yahoo.com/noticias/amazon-anuncia-novos-centros-distribui%C3%A7%C3%A3o-212500574.html?guccounter=1&amp;guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&amp;guce_referrer_sig=AQAAAEsv98gCLNhsDa3MyffNsszjtyeLUJ40LLVMuyZ3PssRp0_XDxpBzoIByEO3WSbD5yRvuPHU8watEhixNomMeeKy1bVUE3fUGWtgketC7dPhYaZCP6yX7wDfzob1qukOURGLkTDwpJFXCD9pUf327mFEjWlHclCmGi_7PNX5iZbn">three new distribution centers</a> in Brazil, bringing its total to eight. The announcement came just after Amazon’s first Prime Day in the country and AliExpress expressing intentions to open its own distribution center in Brazil. The locations — Betim (Minas Gerais), Santa Maria (Brasília), and Nova Santa Rita (Rio Grande do Sul) — will allow the company to deliver products to Prime customers in 500 new cities within two days.&nbsp;</li><li><strong>Logistics 2.</strong> Ecommerce competition is proving to be fierce, as online marketplace Mercado Livre also <a href="https://6minutos.uol.com.br/negocios/com-5-novos-centros-de-distribuicao-mercado-livre-quer-entregas-do-e-commerce-no-pais/">announced</a> the construction of five new distribution centers in Brazil in 2021, in the states of São Paulo, Minas Gerais, and Santa Catarina. The new infrastructure will grant the company another 340,000 square meters of storage, immediately after it created its <a href="https://brazilian.report/tech/2020/11/06/tech-roundup-a-landmark-decision-on-software-taxation-in-brazil/">very own airplane fleet</a>.&nbsp;&nbsp;</li><li><strong>Data leak. </strong>São Paulo energy utility company Enel is the latest in a series of companies that have suffered <a href="https://www.terra.com.br/noticias/tecnologia/enel-sp-vaza-cpf-telefone-e-mais-dados-pessoais-de-300-mil-clientes,e91e4f536d5df4f6afee4a1cee50c7fas8epu8ra.html">data leaks</a> in Brazil this year. Personal information — such as name, address, taxpayer IDs, and even bank account numbers — was exposed of up to 300,000 customers in the city of Osasco — the equivalent of four percent of Enel’s entire customer base. The company is now subject to sanctions foreseen in the General Data Protection Law.&nbsp;&nbsp;</li><li><strong>Freelancing. </strong>Israeli freelancing platform Fiverr <a href="https://www1.folha.uol.com.br/mercado/2020/11/startup-israelense-de-trabalho-freelancer-chega-ao-brasil.shtml">arrived in Brazil</a>, launching its platform in Portuguese and allowing payments in Brazilian Reais. The company is known for connecting freelancers and companies — principally from the small and medium-sized enterprises (SMEs) segment — and saw its user base grow as many people lost their jobs amid the pandemic. Fiverr, however, has already been criticized due to low payments for workers.</li><li><strong>Politics. </strong>As the election for House Speaker approaches in Brazil&#8217;s Congress, various political groups are organizing to win the coveted post. Sources <a href="https://valor.globo.com/politica/noticia/2020/11/12/fabio-faria-e-cogitado-como-plano-b-para-presidencia-da-camara.ghtml">told</a> Valor Econômico that, in case lawmaker Arthur Lira fails to come up as a viable candidate, the Jair Bolsonaro administration is considering launching Communications Minister Fábio Faria as their favorite. The cabinet minister is known for having good political liaisons in Congress, but there is no news on who might replace him in the cabinet.&nbsp;&nbsp;</li><li><strong>5G. </strong>Anatel and the Brazilian Agency of Industrial Development (ABDI) signed a deal to allow testing of private 5G networks for business uses. Together, they will develop projects to test and validate frequency bands, necessary bandwidth, and other key performance indicators to implement 5G in selected environments. The studies will become technical references for regulators.

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Natália Scalzaretto

Natália Scalzaretto has worked for companies such as Santander Brasil and Reuters, where she covered news ranging from commodities to technology. Before joining The Brazilian Report, she worked as an editor for Trading News, the information division from the TradersClub investor community.

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