São Paulo ahoy! Why Euro startups are targeting Brazil

There’s an interesting split forming in the expansionistic aims of Germany’s startups. The entertainment-centric services are setting their sights on the U.S., the UK and nearby European countries. But it’s getting ever clearer that the e-commerce moneyspinners are targeting Brazil.

It’s not hard to see why. The Brazilian economy is doing nicely and its web market is booming. What’s more, Brazil’s own startup scene is turning white-hot, as evidenced by the arrival of the likes of Sequoia – so now’s the time to get in there.

The latest evidence of this is the expansion of Germany’s KaufDa, majority-owned by publisher Axel Springer, into Brazil this week. KaufDa is a location-based couponing service that does mobile in a big way. It’s hardly the only service with such ambitions (if I had a cent for every local-deals startup I’ve seen recently…) but when it was bought by Axel Springer last May it already had around 11 million users just in Germany, a nation of 82 million people. In other words, it’s pretty successful at what it does.

Axel Springer took the service into France last December under the name Bonial, then Spain (Ofertia) and Russia (Lokata). Now it’s in Brazil under the name Guiato.

By launching Guiato in Brazil we are already present in four of the world’s ten biggest economies with our KaufDa concept. Brazil’s fast economic growth, in particular, renders this market so attractive for us,” said Christian Gaiser, CEO of what is called the Bonial International Group these days.

And KaufDa/Bonial aren’t the only ones with their eyes on the Portuguese-speaking nation. Everyone’s favourite clonesters, the Samwer Brothers, have been out there for a while. Rocket Internet has around a dozen startups in Brazil, which is clearly its biggest growth area outside of south-east Asia, and the company also opened up a 130-strong developer center in the Portuguese city of Porto in May – cheap labour plus a convenient linguistic match, no doubt.

It’s no surprise that Brazil is so attractive right now. Actually, the same goes for anywhere in the world that has a healthy economy and has been largely ignored by English-first, developed-world-centric internet services for too long.

True: the services spreading out of Europe to São Paulo aren’t the most original, but they clearly meet a need. The U.S. and UK markets are saturated and their economies aren’t doing brilliantly right now. Add to that the Sisyphean task of trying to break into those markets from the non-English-first outside, and places like Brazil seem like even more of a no-brainer.