Breakdown: Globant’s Hunger for Brazilian Tech

Globant’s been hungering for Brazilian firms for a while, but a recent spree of acquisitions underscores the company’s interest in Latin America’s largest economy and one of the region’s true tech powerhouses.

What’s new: Globant recently acquired Iteris Holding, a Brazilian consultancy firm specialized in tech transformation. 

• Aside from acquiring Iteris’ portfolio of customers –many of them relevant players in banking–, Globant characterized the acquisition as an important move in their plans for Latin America, which have Brazil as a centerpiece.

• “With this acquisition, we are taking significant steps in Brazil because we believe in the potential of this market,” stated Globant’s CEO Martín Migoya in a press release. “This new phase entails substantial growth for our operations in the country.”

Who’s counting?: Since 2019, Globant has been on a shopping spree for Brazilian firms or companies with a strong pressence in the country.

• Last year, the company acquired Salesforce-focused consulting firm Nescara . 

• Globant also snatched-up cloud transformation firms Avanxo (in 2019) and gA (in 2020), plus creative agency GUT (in 2023). All have major operations in Brazil, with offices spread all throughout the Americas. 

The numbers: In August 2023, Globant announced a US1$ billion investment in Latin America. Though the company did not specify how much would go to Brazil, it did emphasize that there would be “a strong expansion” in the country.

• Globant aims to have three main business units in Brazil –in Rio de Janeiro, in Florianopolis and in Campinas– by 2028.

• Globant’s current headcount in Brazil stands at around 1,200. The company aims to increase that number to 4,000 by 2028.

What’s been said: Ignacio Iglesias, CBO at Globant LATAM, stated in August that “our Latin American strategy for the following years is centered in Brazil.”

• “We’re committed to Brazil in the long term,” Iglesias told Bnamericas. “We trust in the business ecosystem and the country’s academic infrastructure, and we’re seeking to consolidate ourselves as leaders when it comes to leveraging the [local] tech industry.”

The outward urge: Globant already exports its services outside of Latin America. Some of its most prominent clients include US companies like Google, Electronic Arts and Disney. Company leadership, however, underscored plans to use their Brazilian operations to grow even further beyond Latin America, leveraging the nearshoring boom in the region.

• “The time to focus on Brazil is past,” Iglesias said. “Our future growth will be much stronger than today’s. Brazil has matured as a market; it has some of the top professionals [in the IT industry].”

Outsider perspective: Alex Sheplyakov, CTO at Wiserbrand –a digital consultancy firm with offices in Argentina, Ukraine and the US– told NSAM that Brazil has emerged as a “particularly appealing prospect” for Argentinean tech firms due to its physical and cultural proximity.

• “The economic landscape in Brazil, combined with the competitive pricing strategies of Brazilian tech enterprises, renders acquisitions there significantly more cost-effective than in Argentina, Uruguay, or Chile,” Sheplyakov commented. “This financial advantage, along with cultural congruence, presents a strong case for Argentinean firms considering acquisitions in Brazil.”

The matter of scale: Brazil is the top producer of software developers, programmers and engineers in Latin America, in terms of volume. 

• It also has some of the most respected universities for tech in the region, several of them globally recognized.

• Its main cities (São Paulo and Rio de Janeiro, in particular) are among the most expensive for tech sourcing in Latin America, however. And the country’s tax system can be quite intimidating.

An economic angle: Argentina has for years been one of Latin America’s most chaotic economies. The country is currently undergoing an economic transformation which promises to bring back hope but also (at least initially) even more chaos.

• Some of Argentina’s most influential tech executives have found a “safe haven” for their businesses in neighboring Uruguay, a territory which shows promise but is far from the technological powerhouse that Brazil has proven to be. 

NSAM’s take: Big Latin American tech consultancies tend to be more successful regionally than globally. Globant is one of the few which has managed to carve a reputation in the global business stage. It seems, however, that the company is directing its ambitions towards an even bigger international presence.

The fact that it will use Brazil as a platform to make that jump speaks volumes of the country’s growing reputation as the premiere destination in Latin America for tech.

Globant’s leadership plans to upgrade Brazil’s technological capabilities, going for expertise in cutting edge technologies such as AI, cloud and quantum computing.

While other Latin American geos are also upgrading, Brazil stands at a privileged position due to its recent history in the tech industry, the size of its economy and population, as well as its popularity among tech leaders as a nearshoring option. In other words: Latin America’s technological gap is about to grow even wider.

Brazil does not hold all the cards, however. The country remains, by far, the most expensive site for nearshore tech, thanks in no small part to its reputation in the market. Globant’s actions –and the ones of those who follow– might push Brazilian pricing even higher, opening an opportunity for other geos –either established or emerging– that offer quality service and expertise at a fraction of the cost.

We hesitate to use the term “saturation”. Brazil is big enough to sidestep such a characterization, but one could certainly say that its main cities –like Rio and São Paulo– have very busy tech ecosystems. 

In that context, it’s no surprise that sourcing alternatives are emerging outside the most popular metropolitan areas. If sites like Campinas, Recife and Florianopolis consolidate their bona fides as tech destinations, that could tip the scales towards affordability in Brazil.