brazil’s black silicon valley could be an epicenter of innovation in latin america
Brazil has experienced significant growth in its startup sector over the past five years.
Historically, São Paulo and Belo Horizonte have served as the primary startup centers within the nation. However, a new generation of cities is now actively developing their own robust startup communities. This includes Recife, centered around the Porto Digital hub, and Florianópolis, supported by Acate. Most recently, Salvador da Bahia is emerging as a potential “Black Silicon Valley.”
Although financial and media industries are largely based in São Paulo and Rio de Janeiro, Salvador, a city of three million residents in the state of Bahia, is widely recognized as a major cultural center within Brazil.
The city boasts a substantial 84% Afro-Brazilian population, resulting in a profound and visible African influence throughout its history, musical traditions, culinary offerings, and overall culture. The state of Bahia, comparable in size to France, is home to 15 million people. Bahia’s strong creative heritage is evident, as the origins of many significant Brazilian cultural elements – including samba, capoeira, and numerous regional foods – can be traced back to this region.
It is often overlooked that Brazil possesses the largest Black population of any country outside of Africa. Similar to their counterparts in the U.S. and throughout the Americas, Afro-Brazilians have faced a long-standing struggle for social and economic fairness. Like Black founders in the United States, Afro-Brazilian entrepreneurs encounter challenges in securing funding.
Research conducted by professor Marcelo Paixão for the Inter-American Development Bank indicates that Afro-Brazilians are three times as likely to be refused credit compared to white Brazilians. Furthermore, Afro-Brazilians experience poverty rates more than double those of white Brazilians, and their representation in legislative bodies remains limited, despite constituting over 50% of the population. They also hold fewer than 5% of leadership positions within the country’s 500 largest companies. In comparison to nations like the United States or the United Kingdom, the disparity in racial funding is even more pronounced, considering that over half of Brazil’s population identifies as Afro-Brazilian.
Bahia has the potential to become a leading hub for innovation in Latin America
Salvador, the capital city of Bahia, is widely considered the origin point of Brazil’s Black Silicon Valley, a thriving innovation ecosystem primarily located around the Vale do Dendê hub.
Vale do Dendê works in collaboration with regional startups, investment firms, and governmental bodies to foster entrepreneurship and drive innovation. It also manages startup acceleration initiatives specifically designed to empower Afro-Brazilian entrepreneurs. The Vale do Dendê Accelerator has garnered attention from both domestic and international media outlets due to its pioneering efforts in extending startup and technology education to communities that have historically lacked access.
Over the course of nearly three years, the accelerator has directly assisted 90 companies spanning a diverse range of industries, with significant participation from the creative and social impact fields. The vast majority of these businesses have experienced substantial, double-digit growth, and several have successfully secured additional funding or corporate partnerships. TrazFavela, a delivery service connecting customers with products from underserved communities, represents an early success story, having received support from the accelerator in 2019. Even amidst pandemic-related restrictions, the company saw a 230% increase in business between March and May following its incubation period, and has since entered into an agreement with Google Brasil for further investment and assistance.
The economic viability of Afro-Brazilian businesses is increasingly acknowledged. Diaspora Black, another company initially supported through mentoring from Vale do Dendê and focused on Black culture within the tourism industry, received investment from Facebook Brasil and achieved a 770% growth rate in 2020.
A similar pattern is evident with AfroSaúde, a health technology company dedicated to serving low-income populations with a novel service aimed at preventing COVID-19 in favelas – densely populated urban areas with a significant Black population. The application now boasts a network of over 1,000 Black healthcare professionals, generating employment opportunities while tackling a health crisis that disproportionately impacted racial groups.
Bahia is poised for a period of significant growth and innovation
Even with the economic difficulties currently facing Brazil, numerous large corporations – both domestic and international – and investors are recognizing the increasing number of new businesses being formed. Qintess, a prominent information technology firm, has become a key sponsor in an effort to establish Salvador as the preeminent center for Black technology innovation in Latin America.
The corporation revealed a commitment of approximately 10 million reais (equivalent to almost $2 million USD) over a five-year period to support Black-owned startups. This includes a partnership with Vale do Dendê to provide training for roughly 2,000 individuals in technological fields and to accelerate the growth of over 500 startups with Black founders. Furthermore, Google introduced a 5 million reais (approximately $1 million USD) Black Founders Fund in September, in collaboration with Vale do Dendê, to strengthen the Afro-Brazilian startup environment.
It is clear that the next generation of groundbreaking ideas will originate in developing economies, and communities of the African Diaspora are positioned to have a substantial impact. Brazil, possessing the largest population of African descent in the Western Hemisphere, has the potential to be a leading force in this movement. Vale do Dendê is actively seeking collaborations to foster a more inclusive startup and creative economy landscape throughout Brazil and Latin America.