In the spirit of sharing the knowledge that was shared with us at Brazil at Silicon Valley, we will be sharing summaries of our takeaway notes. We hope you enjoy them as much as we enjoyed the original talks!

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Why is now a great time to build in Brazil? (Angela Strange & Hugo Barra)

TL;DR:

– Every company will eventually become a fintech company, with financial services becoming a horizontal platform.

-Brazil’s fintech revolution is driven by regulatory changes and the proactive efforts of the Brazilian Central Bank, such as the launch of Pix.

-AI offers opportunities for tech-forward solutions in Brazil’s financial infrastructure, catering to previously uneconomical customer bases.

-Brazilian founders should improve their storytelling skills when pitching to investors.

-To overcome credit-related challenges, companies should make credit part of a broader platform and demonstrate a strong track record in underwriting.

Angela Strange, a general partner at Andreessen Horowitz, is a prominent figure in the fintech industry. In her talk at BSV, Angela shared insights on the evolution of fintech, the growth of the industry in Brazil, and the potential for AI to revolutionize the way financial services are delivered. 

One of the key takeaways from Angela’s lecture is her belief that every company will eventually become a fintech company. With the growing importance of financial services, companies that incorporate financial services into their offerings can better attract, retain, and monetize their users. Examples of companies that embody this vision include Uber and Lyft, which act as financial services platforms for drivers. As Angela noted, financial services have become a horizontal platform, enabling various types of companies to thrive. For example, Toast, a company that offers vertical software for restaurants, has expanded into lending. Similarly, Fudo, a Latin American company, brings software to industries still reliant on pen and paper or Excel spreadsheets.

The fintech revolution in Brazil has been driven by regulatory changes and the efforts of the Brazilian Central Bank (BCB). The BCB has been proactive in creating a regulatory environment that has allowed the fintech industry to flourish. One notable success story is the launch of Pix, a universal payment system that gained rapid adoption, with 80% of the country using it within three years. The BCB ensured Pix’s success by making it mandatory, free for consumers, and enforcing a consistent user experience. These developments have created a competitive advantage for Brazil, and the future of fintech in the country remains promising.

As more companies adopt financial services, there is a need for more tech-forward solutions in Brazil’s financial infrastructure, including lending as a service and improved collections. With AI coming of age and causing a paradigm shift in computing, there are opportunities for Brazilian fintech companies to take advantage of this revolution, further bolstering their growth and development. By utilizing AI, companies can serve customers more efficiently and economically, allowing them to cater to previously uneconomical customer bases.

During the talk, Angela highlighted the importance of storytelling skills for Brazilian founders when pitching their ideas to potential investors. While Brazilian founders excel at spotting and developing raw talent, they could improve their ability to effectively communicate the quality of their product and team. 

Investors are currently nervous about credit in all markets, not just Brazil. To overcome this challenge, companies should consider making credit a part of a broader platform, creating a stickier business model. Additionally, demonstrating a proven track record in underwriting and bringing in someone with relevant experience can make the business more attractive to investors.

In conclusion, Angela’s lecture provides valuable insights into the fintech industry, the growth of the industry in Brazil, and the potential for AI to revolutionize the way financial services are delivered. As companies continue to adopt financial services, there is a need for more tech-forward solutions in Brazil’s financial infrastructure, and the future of fintech in the country remains promising. Founders should focus on improving their storytelling skills when pitching their ideas to investors, and investors should look for those who have thought deeply about a problem and have a strong founder-market fit. By sharing insights across different countries, industries, and sectors, investors can help companies recognize and leverage the potential of AI in their operations.

The Importance of Agriculture Technology in Addressing Climate Change

Teresa Cristina Vendramini, Nolan Paul, Mary C. Pearl, Matt Barnard

TL;DR: 

-Agtech’s crucial role in addressing climate change

-Challenges in spreading agtech to smallholder farmers in Brazil

-Increasing food production by 70% with reduced greenhouse gases

-Balancing nature-based and tech solutions while integrating into local communities

Agriculture technology (agtech) has a crucial role to play in addressing climate change, which is one of the most significant challenges facing the planet. In this panel, the importance of ag tech in addressing climate change is discussed. The conversation covered various topics related to agtech and its role in the agricultural sector, including challenges, opportunities, and solutions.

The group notes that 80% of farmers in Brazil are smallholders, and 15% have never been to school, making it challenging to spread agricultural technology that could help combat climate change. However, South America provides a unique 52-week cycle for technology deployment, which is an advantage in bringing new technologies to the market. The estimated cost of investments needed to achieve net zero greenhouse gas emissions by 2050 was also discussed, along with the projected market value of climate tech.

The group discussed the need to increase food production by 70% while reducing greenhouse gases and the potential for agriculture technology to help solve this problem. Indoor agriculture and vertical farming were highlighted as a solution to land and water scarcity, which is becoming increasingly important as the food chain becomes more fragile and less reliable. This technology enables them to discover and deliver the best recipes for plant growth with consistency.

The conversation then moved to the issue of food waste, which uses more water than any country in the world and ag tech has an essential role to play in addressing this problem. They give examples of companies that use technologies licensed from universities to extend the shelf life of food and bring fiber back into human diets, for example.

The conversation highlighted the need for a more democratic food system and the importance of opening up professions that provide higher income and more certainty. Finally, the conversation addressed the balance between nature-based solutions and tech solutions, highlighting the importance of integrating into local communities when using technology to solve sustainability problems. Ag tech has the potential to be a significant part of the solution to climate change, but it must be developed and implemented with care and sensitivity to the needs of local communities and ecosystems.

Democratizing Artificial Intelligence

(Alexandr Wang, Peter Norvig)

TL;DR:

• The conversation between Alexandr Wang and Peter Norvig discussed the democratization of AI and its potential risks and benefits.
• Alexandr Wang shared his journey from MIT freshman to entrepreneur, founding Scale AI, now valued at $7 billion.
• The speakers emphasized the need for careful rollout of AI technology and thoughtful consideration of its global impact, including concerns over consumer protection, privacy, and geopolitical risks.
• They highlighted the importance of clear regulations and guidelines in AI to prevent bad actors from misusing technology and stressed the need to make AI tools more widespread and affordable.
• The experts also discussed the potential of AI to distribute gains more evenly if integrated into people’s work and made more accessible, and suggested that Brazil could use AI to modernize and economically develop more quickly, leveling the playing field with other countries.

In a recent conversation between Alexandr Wang, CEO and Founder of Scale AI, and Peter Norvig, Researcher at Google and Education Fellow at Stanford, the two industry leaders discussed the importance of data, computational power, and new algorithms for AI’s development, as well as the potential risks and concerns surrounding AI technology.

Alexandr Wang shared his journey from MIT freshman to entrepreneur, founding Scale AI, now valued at $7 billion. Wang’s vision was to support the AI ecosystem through data and datasets, believing in the potential of deep learning and its dependency on data, as demonstrated by the release of AlphaGo and TensorFlow in 2015-2016.

The conversation explored the democratization of AI, which aims to build and utilize AI applications for every use case that can help humanity. The experts acknowledged the need to balance democratization with the risks of bad actors using the technology maliciously. They discussed the potential shift in app infrastructure and operating systems due to AI technology and pondered whether a language specifically for machines should be developed.

Addressing the Future of Life Institute’s call for a pause on generative models, the speakers emphasized the need for careful rollout of AI technology and thoughtful consideration of its global impact. They acknowledged concerns over consumer protection, privacy, and geopolitical risks but argued that pausing AI development in the United States is not a viable option due to ongoing development in other countries.

The speakers highlighted the importance of clear regulations and guidelines in AI to prevent bad actors from misusing technology. They discussed the potential impact of AI on education, emphasizing the need to adapt educational curricula to incorporate technology without promoting cheating.

They also considered the impact of AI on workers, with the belief that every job, particularly knowledge jobs, will change on some level. AI tools can make workers more effective, allowing them to accomplish greater things. The challenge for knowledge workers is to utilize AI tools to produce the best possible version of their work and to continually improve.

The conversation touched on concerns about inequality between those who can use AI tools and those who cannot. The speakers stressed the importance of making these tools more widespread and affordable. They also addressed the risk of wealth concentration and income inequality and referred to Erik Brynjolfsson’s paper “The Turing Trap,” which emphasizes the importance of building AI tools that augment humanity and help people, rather than simply imitating human abilities.

The experts discussed the potential of AI to distribute gains more evenly if integrated into people’s work and made more accessible. They suggested that people will become managers of robot fleets rather than being replaced by robots. They also agreed that coding skills will remain valuable, along with prompt engineering and knowing how to use AI models.

Lastly, the speakers discussed Brazil’s potential to take advantage of AI, noting its growing population and thriving tech companies as positive indicators. They highlighted the entrepreneurial opportunities AI can bring to Brazil’s unique ecosystem and economy and suggested that Brazil could use AI to modernize and economically develop more quickly, leveling the playing field with other countries

Digital Transformation and M&A: Insights from Whole Foods CTO Leandro Balbinot

(Leandro Balbinot, Henrique Marumoto)

TL;DR:

• The article is based on a talk moderated by Henrique Muramoto and features Leandro Balbinot as a panelist.
• The focus of the panel is on effective corporate transformation, particularly in the area of digital transformation and M&A.
• Amazon prefers to develop products in-house, but they also acquire companies if it accelerates value growth and the capabilities fit their roadmap.
• The conversation covers topics such as the importance of disseminating a desired culture within a company, the successful acquisition of Avi, and the challenge of implementing a company culture when acquiring a larger company.
• The speaker also emphasizes the importance of iterative digital transformation, making sense of data, and choosing the right company and understanding non-negotiables before a merger or acquisition.

In yesterday’s talk moderated by Henrique Muramoto, Managing Director of Warburg Pincus Brazil, Leandro Balbinot, CTO of Whole Foods, shared his experience in digital transformation and M&A. The conversation covered a range of topics related to these areas, including the challenges of post-merger integration, the importance of understanding founders and their purpose, and the need to prioritize and understand the reality on the ground.

One key takeaway from the conversation was the importance of working closely with the team and stakeholders to continuously invest in product development. Balbinot emphasized the need for creativity and sales skills when convincing franchisees to adopt new technology, and highlighted the potential of technologies like hyper-automation, image recognition, and IoT to improve customer experience and help farmers.

However, Balbinot also cautioned against a big bang approach to digital transformation, recommending instead an iterative approach starting with smaller projects that make sense. He emphasized the importance of choosing the right company and understanding non-negotiables before a merger or acquisition, and advised taking the time to learn and integrate slowly to avoid cultural clashes.

Balbinot also discussed the importance of data in decision-making for physical retail, emphasizing the need to make sense of the data and use it to understand customers, store clusters, and regional complexities. Whole Foods uses data to successfully launch new products in all 540 stores, and has found conversational AI to be transformational in simplifying operations and making ordering more efficient.

Overall, Balbinot’s insights provide valuable lessons for companies undergoing digital transformation or considering mergers and acquisitions. By working closely with stakeholders, prioritizing and understanding the reality on the ground, and taking an iterative approach to change, companies can successfully navigate these complex and challenging processes.

Global Investment Trends

(Alex Clavel, Antoine Colaço, Mercedes Bent, Luis Lora)

TL;DR:

• The article discusses a panel discussion on global investment trends featuring four panelists who shared their experiences and insights on venture capital and investment frameworks.
• The panelists discussed the potential of the Latin American market, particularly Brazil, and the importance of understanding market differences and applying a regional lens when investing in startups.
• The speakers acknowledged that the region has made progress in supporting entrepreneurs, but there are still gaps in the market, such as the liquidity profile of the capital markets, that need to be addressed.
• The conversation focused on investment opportunities in Brazil and Latin America, particularly in the technology sector, and the challenges faced by cross-border funds dealing with foreign companies.
• The article concludes with advice for entrepreneurs and investors on building resilient companies, having a big and bold vision, and finding strengths and complementing weaknesses.

Investing in Brazil and Latin America presents both opportunities and challenges for investors. The venture capital market in Latin America is still small and nascent, but growing rapidly, presenting an opportunity for investors to start something in a market they believe will continue to grow. However, understanding market differences and applying a regional lens when investing in startups is crucial, as a business model that works in one market may not work in another market due to regulatory and structural issues.

There are still gaps in the market that need to be addressed, particularly in relation to the size and liquidity of capital markets. The liquidity profile of the capital markets in the region is a challenge for companies, and efforts are being made to expand liquidity. However, the size of the capital market should not limit the amount of capital allocated to opportunities in the region. There are still many whitespace opportunities and inefficiencies in the market that present attractive investment opportunities.

Despite concerns about the market, Brazil has a large pool of subscription-based businesses, and US and European companies have large user bases in Brazil and Latin America. Brazilians are excited to try new technologies, particularly in the consumer sector. However, challenges still exist, such as the potential for exits given the current state of the capital markets. Mercedes is of the mind that Brazilians should be writing more code and not letting US and European entrepreneurs eat their lunch! 

Investors also face challenges when dealing with foreign companies that have large user bases in Brazil but may not have Portuguese language capabilities. This presents an opportunity for companies to build more software in Brazil instead of outsourcing to Europe or the US. Antoine also emphasizes the importance of product management skills in Brazil and suggests that training in this area could help companies reach the next level quickly.

The fundraising environment in Brazil is tough, but Mercedes advises companies to keep building and reaching out to US investors who are just an email away. The importance of having scrappy and resilient founders who are willing to pivot and overcome challenges is also emphasized, as well as having a big and bold vision for a company.

In summary, investing in Brazil and Latin America presents opportunities and challenges for investors. The market is growing rapidly, but understanding market differences and applying a regional lens when investing in startups is crucial. Despite challenges, there are still many whitespace opportunities and inefficiencies in the market that present attractive investment opportunities. Companies should focus on building product management skills and reaching out to US investors.

Brazil’s Potential to Lead Climate Tech Investing and The Rise of Climate Tech Investing

(Marina Mansur, Alex Laplaza, Phoebe Wang, Ida Hempel, Julia Sekula)

TL;DR:

• Brazil has the potential to become a leader in climate tech investing, with a unique position to transition to sustainable energy and materials.
• The green economy in Brazil could be a $125 billion economy by 2040, with sustainable aviation fuel and the carbon credit market being the two largest opportunities.
• Climate tech presents a significant investment opportunity with potential for profit, with startups having raised over $500 million in sustainable energy.
• Climate tech is seen as a hedge against macroeconomic risks and threats, and policies such as the US Infrastructure Investment and Jobs Act can fill the gap between early-stage research and commercialization.
• The conversation is mostly focused on nature-based solutions, but other areas like green hydrogen and agriculture could be explored, and entrepreneurs from various backgrounds can transition to climate tech.

In yesterday’s panel discussion on climate investors, Marina Mansur from McKinsey and Company provided valuable insights into climate technology. The discussion focused on Brazil’s potential to lead the way in climate tech investing and the impact of climate tech on macroeconomic risks and threats. The panel also discussed the US government’s Infrastructure Investment and Jobs Act, the potential of Latin America in climate tech, the importance of nature-based solutions, and the role of software and hardware in climate technology.

To limit global warming to 1.5 degrees Celsius, there is a need to transition the global economy to sustainable energy and materials. This requires a three to five trillion dollar investment annually until 2030. Brazil has a unique position to lead this transition and become a powerhouse in supporting this global transition. The green economy in Brazil could be a $125 billion economy by 2040 based on renewable power, bio-based energy and materials, and the carbon market. Startups have raised over $500 million in sustainable energy, and there is increasing VC interest in the field.

The panelists agreed that climate tech is here to stay and that there has been an amazing confluence of factors that make it a viable investment opportunity. The passing of the US Infrastructure Investment and Jobs Act is seen as a mind shift towards the opportunity to be a leader in the global transition towards a sustainable future.

The conversation highlights the importance of building big, profitable businesses to have an impact on climate and how impact doesn’t get you to scale, but scale gets you to impact. Tesla is given as an example of a business that changed the way we move and drive cars and is now the most valuable OEM in the world.

The panelists caution against becoming overly reliant on policies and emphasize the importance of having a sound business plan. When asked what aspect of the policy they think the US government got right, one panelist cites the grants for accelerating the scale-up of existing solutions, especially in hard-to-abate sectors such as cement and steel production. They hope that other countries, including Latin American countries like Brazil, can adopt similar policies to promote clean energy innovation and investment.

The discussion also focused on the potential of Latin America, particularly Brazil, in climate tech, but despite having natural advantages and industries that could contribute to the sector, it is still lagging behind in terms of investment and development. The problem could be attributed to a lack of recognition of climate industries in Brazil and not fully leveraging its talent and technology adoption.

The conversation also touched on the importance of nature-based solutions. The speakers mentioned that Brazil is in a good position for nature-based solutions, which include forestry and reforestation planning. However, nature-based solutions require a lot of monitoring and reporting, which can be challenging. The speakers also discussed the importance of a portfolio of solutions and how nature-based solutions and engineered carbon removal are complementary.

Lastly, the panelists discussed the role of software and hardware in climate technology. Climate tech is considered “deep tech,” which encompasses both software and hardware. Computational power is in high demand to support regenerative AI models. Entrepreneurs from various backgrounds, including FinTech and InsurTech, can transition to climate tech. Ultimately, building a profitable and scalable company requires good unit economics, regardless of the industry.

In conclusion, Brazil has a unique position to lead the way in climate tech investing and become a powerhouse in supporting the global transition towards a sustainable future. Climate tech is seen as a viable investment opportunity and a hedge against macroeconomic risks and threats. The importance of nature-based solutions, a portfolio of solutions, and sound business plans are emphasized. Climate tech is “deep tech” and requires both software and hardware, and entrepreneurs from various backgrounds can transition to climate tech.

If you’d like to read our summaries from BSV Day 2, visit here.

This article is an AI-enhanced article draft from our takeaway notes for every talk held at BSV. We wish you enjoy it as much as we’ve enjoyed the original talks and also serve as a way to share the content of BSV with the people who couldn’t attend the event.