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Brazil stands out as a new global technology hub, driven by acquisitions and labor shortages. With the growing demand for talent, large companies are investing and seeking to expand their operations.
In recent times, a surprising phenomenon is gaining strength: Brazil is becoming a true paradise for foreign companies looking for talent in the technology sector.
The global labor shortage and growing demand for developers have turned the country into a strategic hub for IT offshoring, a change that promises to have an impressive impact on the market in the coming years.
Recently, Japanese giant NTT Data announced the acquisition of Brazilian technology services company Aoop, reinforcing the trend that Brazil is positioning itself as the new India in the technology sector.
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According to Daniel Milanez, COO and co-founder of IGC Partners, This change is part of a broader movement, where Brazil stands out as an attractive destination for companies looking to outsource their IT operations.
The impact of acquisitions
Over the past four years, more than 20 acquisitions of Brazilian companies in the technology area were carried out, moving almost R$9 billion.
IGC Partners, for example, brokered around 75% of transactions in this sector, including the sale of Aoop.
According to Rafael Frugis, partner at IGC, By early 2025, more transactions are expected to take place, with at least two operations already in the due diligence phase.
The pandemic as a catalyst
The COVID-19 pandemic acted as a true catalyst for this transformation.
While Indian service providers faced difficulties in their deliveries, Brazil began to be seen as a viable alternative.
In addition to the quality of the workforce Brazilian work, the cultural affinity with American and European companies, added to the smaller time zone difference, contributed to this change in perception.
Offshoring has become “near shoring” or “friendly shoring”, according to Frugis.
Growth of technology companies
Historically, technology services companies in Brazil have always been cash generators, but were not highly valued by investors.
However, the growing need for digital transformation, driven mainly by the emergence of digital banks, has made companies such as Tivit, CI&T and Stefanini stand out.
In 2019, for example, Itaú acquired Zup, a company with 900 employees, for R$575 million., which exemplifies the search by large corporations for technology talent.
The new wave of acqui-hire
Currently, the Brazilian market is experiencing a new wave of strategic hiring, with large companies such as Boticário, Ambev and Alpargatas carrying out Acqui-Hires, where they pay multiples of more than R$1 million for development teams.
This movement reflects a significant change in the dynamics of the sector., with international investors seeing Brazil as a promising destination to establish operations.
The geopolitical scenario and international presence
Brazil also benefits from a changing geopolitical scenario.
The war in Ukraine and the fragility of the Indian sector during the pandemic opened up space for the country in the technology market.
Global companies, such as India's Marlabs and Argentina's Globant, are expanding their presence in Brazil, demonstrating their growing interest in hiring local talent.
NTT Data, for example, not only acquired Aoop, but is also looking to expand its operations in Brazil.
The future of offshoring in Brazil
Meanwhile, Brazilian startups, such as Santa Catarina-based Indicium, are going international.
After receiving a US$40 million investment from the Columbia Capital fund, the company now operates from New York, exporting services developed in Brazil.
CI&T, which launched its IPO on Nasdaq in 2021, saw its revenue rapidly internationalize, reinforcing the trend that Brazil is an important player in the global technology scene.
IGC Partners, a specialist in mergers and acquisitions, is expected to broker more than 20 operations this year, with more than 70% of these transactions involving the sale of mid-sized Brazilian companies to foreign investors.
The scenario is promising and points to an increasingly integrated future for Brazil in the global technology market.
With all these changes, the question remains: will Brazil become the new heart of global technology, surpassing India and Russia? What do you think of this transformation?
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