Over a year after it was initially announced to go out, Start-Up Brasil finally launched its fifth call this week.
The call was launched by Brazil’s Science and technology ministry on August 10.
It follows an announcement in April last year by Start-Up Brasil - which is run by Softex, Brazil's software association - that a new call would open soon to select 100 technology firms (see this earlier post).
A spokesman for the programme Rodrigo Lima told Small Business Insight in June last year that the impeachment of former president Dilma Rousseff had put the call on hold.
The programme, which was launched in 2012, works with accelerators, which then help tech start-ups that are selected to grow. Participating firms must be at least four years old.
In the latest call the programme has halved the number of start-ups it initially aimed to select, to 50. In addition, while in the past a quarter of places were reserved for non-Brazilian start-ups – in the current call the programme will only take on Brazilians start-ups, Lima told Small Business Insight.
In this round those projects selected for support will each receive 9.7 million reals ($3.05m) in funding between this year and next year and will each have access to seed funding of up to 200,000 reals during an 18 to 24-month acceleration programme.
Startups have until September 25 to apply and the names of those selected for the third cohort will be announced on November 30.
It's early days, but so far the programme has had some success. The first cohort of 45 start-ups (38 Brazilian) were able to increase their combined revenue by 139% between January to August 2014.
The ministry’s secretary of information policies Maximiliano Martinhão (pictured above) said at the launch of the latest call that the government is currently in talks with Brazilian development bank BNDES to create a programme to help start-ups to internationalise.
Key has been the multiplier effect of the programme - as previous calls have shown that each real the state puts in, the private sector puts in a further three reals.
The government committed 34.7 million reals ($10.9m) in funding in all in the previous four calls to assist 183 start-ups (including startups from 13 other countries). This helped generate 1,200 jobs and attract an additional 103 million reals ($430m) in private investment.
Martinhão said the multiplier effect the programme has, had helped the ministry to motivate to get further public resources from the fiscus for the latest call, during a time when the government is trying to cut spending – with the country only now recovering from an over two-year recession.
The programme is popular among start-ups. For the last four calls Start-Up Brasil received a total of 2,855 applications.
If state money can indeed help attract three times more funding from the private sector, it might help Brazil and other middle-income countries to find a sustainable way to support and foster innovative solutions. Such solutions could prove vital to boosting growth.
Timm is a South African who writes on small business. Click here to sign up for the monthly Small Business Insight newsletter.
Stephen Timm is a