Brazil's Big Opportunity Attracts Tech Dreamers

Fundacity CEO Miklos Grof is a Hungarian who came to Brazil via the UK, Austria and Chile

[image_library_tag 5fad03b4-c4a5-498c-a3a6-160f57f6e6ef 148x162 alt="mik-300dpi" title="mik-300dpi" width="148" height="162"class="left "]Miklos Grof laughs when I suggest he is being either very smart or crazy. A Hungarian who spent eight years in the UK, he now lives in Belo Horizonte, Brazil, where he is CEO and co-founder of a startup, Fundacity. The company is intended to open up technology investing for Latin American firms through a cloud portal. His path isn’t perhaps the traditional one for tech entrepreneurs that leads to Silicon Valley or some other hotspot, but it is likely that as the technology startup opportunity globalises there will be more like him that try their luck in relatively untapped geographies.

Grof, 28, graduated in Economics from the University of Nottingham then took a Masters in Finance at the London School of Economics before working in corporate restructuring at PwC.

“I didn’t feel I was realising everything I could do so I started eyeballing the startup space,” he recalls. “I was looking at Tel Aviv, San Francisco, London, Singapore…”

He could, perhaps, have become a business development type but then hundreds of thousands of people were having the idea at the same time. The Startup Chile project to attract entrepreneurs lured him into taking a holiday and then staying on in Santiago.

“It was a bit crazy: I didn’t have an idea for a product and didn’t know the language…”

Within a year he spied the bigger opportunity in Brazil, where he lives now in Belo Horizonte, after having set up Fundacity with his business partner, Diego Izquierdo.

“The opportunity is huge and Brazil has one of the more robust ecosystems,” he says. “I decided that if I had come this far I might as well take the full risk.”

Fundacity has raised $300,000 from a cosmopolitan array of angel investors with links to Hong Kong, Greece, Lithuania and closer to his current home. His team have their personal roots in Brazil, Poland and Chile, while Grof adds Hungary, the UK and 14 years in Austria. But, he says, there are relatively few Europeans on the Brazilian startup scene, hence the question referred to at the top: whether he is being exceptionally clever in making himself a bigger fish in a small pool or just running down a blind alley.

Grof is betting on the former and sees Fundacity as a way to connect Brazil and LatAm’s lively startup scene with people who might never have invested previously.

“Our goal is to make startup investment easy,” he says, and to that extent Fundacity has developed cloud-based portfolio management tools and is working with leading local startup accelerators.

On the day we speak, Fundacity is launching its Fundacity Investment Clubs, hooking up new investors with experienced investors leading the clubs, in much the same model as a horseracing syndicate where investors take shares in a horse that is stabled and trained by experts.

Fundacity particularly likes startups with developed products that are making revenue and have a global outlook and he dreams of making the next Google or Uber. Ultimately, Grof hopes to create a virtuous cycle where Latin American companies make successful exits and that money is ploughed back into the next generation of startups, as happened in Israel in the 1990s.

“There are few angels here because the ecosystem is new but people are excited,” he says. “I watch this telenovela [TV drama series] and even on there, there’s a Steve Jobs-style character. But it’s definitely not awash with cash, so let’s create a structure.”

He says that he likes the life there and Brazil has not only a bigger business opportunity but also a better chance of keeping successful entrepreneurs than Chile.

“Brazilians are very welcoming to foreigners, it’s a rich cultural country and it’s easy to feel at home here. In meetings, people are very open. Chilean people are much more introverted, a bit more shy.”

There are challenges, of course.

“Sao Paulo is very international but the rest of Brazil isn’t like that and finding international talent is difficult. Things are still highly regulated especially in the finance sector and that’s difficult but sometimes people think it’s tougher than it really is. Travel is really expensive here and things might be slower than I’m used to in London but people bring a really open and friendly attitude to innovation.”

In the medium term, Grof wants to scale out across Latin America and then maybe turn to Asia.

“I’d like people to think ‘emerging market plus startup equals Fundacity’,” he says.

He could have gone to Silicon Valley or stayed in London and competed against all the City boys leaving the banks and financial services to launch their own startups, but Brazil is a huge market with a growing middle class with less competition.

“I can develop a huge network across a continent. I don’t think I could have made a dent in San Francisco but here we can make a real mark,” he says.

All over the tech world, people are leaving their comfort zones to seek their fortunes. A decade ago they might have been magnetically attracted to the west coast of the US and today cities like London and Berlin have a pull. But for young, ambitious people like Miklos Gof there are new valleys to conquer and fresh fields to explore.


Martin Veitch is Editorial Director at IDG Connect