Brazil – a good place for IT investments
We have seen a consolidation move in Brazil in 2008, including with the friendly takeover offer for Datasul by TOTVS (both companies made several acquisitions of their own in 08 and previous years), the acquisition of ATAN by Accenture, and the merger of several System Integrators into R$ 100m + national behemoths, including BBKO-Hold, Virtus (Dedalus), or BRQ thru several acquisitions. Two special deals worth highlighting are the 70/30 British-Brazilian Joint Venture PromonLogicallis, and the 25% 100m USD investment by Mitsubishi into Politec, a strategic alliance formed to capture Japanese-origin IT talent of Brazil for Japanese multinationals in the Americas or Japan. These companies have all strengthened themselves in order to fight for a dominant position in Brazil and Latin America, increasing competition forces against the already large Brazilian players Stefanini, CPM Braxis, Vertax, Spread, DBA, DTS, Ci&T or Tivit, to name just a few. Brazilian venture capital and private equity firms have recently invested in software and backed some of the IT service firms’ consolidation moves. This is noteworthy, as available local capital historically shunned risks and went after lucrative consumer financing opportunities or, simply, left it working at a 1.x % monthly interest rate low-risk-deposit in a local bank. The appetite for entrepreneurship and taking an active role in globalization can certainly be felt with these investors and company founders, a decisive leap forward for Brazilian society.
Brazil provides IT entrepreneurs with a great opportunity within the national and regional context. With IT companies having looked at Asian and Eastern European opportunities for the past 20 years first, Brazil and Latin America certainly offer one of the greater opportunities for the next decade. Be sure you become part of that exciting movement.
Posted by ThomasEggers, Regional Director on 02 February 2009