Nearshore Americas

Tech Firms Plunge into Brazil with Both Feet

Tech investors seem to have shaken off any lingering doubts about the political transition in Brazil. Private equity firm Silver Lake plans to invest $1 billion into Brazilian IT firms over the coming five years, while global manufacturer General Electric says it will within two years open a $550 million research center in Rio de Janeiro state focused on energy, health, and information technology products.

The investments come after a concerted effort by newly inaugurated President Dilma Rousseff, the hand-picked successor to Luiz Inácio Lula da Silva, who himself had to overcome early criticism of his socialist background.

Lula’s “third way” approach turned Brazil into an exporting powerhouse, gains Rousseff appears anxious to consolidate by moving the country beyond commodities exports and into higher value technology services development.

“Brazil is the highest priority for Silver Lake,” Silver Lake Chairman and Co-founder David Roux told Brazilian daily Valor Economico. Roux specifically mentioned investment interest in data centers, video games, telecommunications, and software.

Silver Lake in September spent $68 million to buy a 20 percent stake in Brazilian web host Locaweb, which accounts for nearly a quarter of all “.br” domains. It was Silver Lake’s first investment in the country.

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The GE project is expected to generate 1,000 direct jobs, including 200 research positions, according to Brazilian ministers close to the announcement.

Kirk Laughlin

Kirk Laughlin is an award-winning editor and subject expert in information technology and offshore BPO/ contact center strategies.

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