Welcome to this week’s Brazil tech and innovation round-up. Here is a selection of three noteworthy developments in Latin America’s largest economy: the latest numbers of Brazil’s wearables market, Nubank’s seed fund for black tech entrepreneurs and the Series D round announced by e-commerce player Nuvemshop.
The wearables market in Brazil has skyrocketed in 2020, according to the latest numbers from analyst firm IDC announced this week. Sales of truly wireless headphones with more advanced features and connection to the Internet have increased by 284%, with about 570.000 units sold, while and sales of smartwatches and smart bands have seen 81% growth in relation to 2019, with 1.3 million units sold. Both categories have generated 2.2 billion reais ($382 million) in sales last year.
Despite the positive result for the year, the growth trajectory in wearables in Brazil was not the linear throughout 2020. In the first three months of the year, the market performed well, with smartwatches and headphones seeing 266% and 312% growth, respectively. The second quarter saw timid growth, with the social distancing measures and the high street shutdown introduced as a result of Covid-19, with 21% growth in the smartwatch and smart band segment, while headphones sales had a 308% increase.
The real boom in the wearables space in Brail came in the second half of the year, with manufacturers seeing “unprecedented growth” in sales, according to IDC, with sales of wireless headphones growing 326% and 246% in Q3 and Q4, respectively, in relation to the same periods in 2019. Sales of smartwatches and smart bands saw a 24% and 122% growth in the third and fourth quarter, respectively.
“Apart the shift of professional videoconferencing and study activities to the home due to the pandemic, and the consumer interest in investing in devices to work or study with more privacy and comfort, new players have emerged in the Brazilian market and increased competitiveness,” said IDC Brazil analyst Renato Murari de Meireles.
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The decline in prices also played an important role in driving consumer demand: the average price of smartwatches and smart bands went from 1.507 reais ($261) in Q3 to 1.199 ($208) in Q4 on average. Headphones, on the other hand, went from from 814 reais ($141) in the third quarter to 710 reais ($123) in the last three months of the year.
IDC predicts the wearables market in Brazil will continue to grow this year, with more than 2 million smartwatches or smart bands sold, and over 1 million “smart” headphones sold in 2021. Corporate sales will gather momentum, the analyst noted, with more companies providing smart headphones own addition to other equipment to work remotely, such as a laptop and a smartphone. The analyst also noted the consumer interest in wearables in Brazil has paved the way for a burgeoning grey market, with an increasing number of unofficial importers and illegal sellers offering counterfeit copies of highly sought after items.
Fintech giant Nubank has launched a seed fund dedicated to supporting Brazilian black entrepreneurs. Announced on Wednesday (24), the Semente Preta (Black Seed, in Portuguese) fund will allocate a total of 1 million reais ($173,000) to Brazilian startups led by black entrepreneurs with a validated minimum viable product (MVP) operating in areas such as financial services, data, people, digital marketing, games, software, applications and programming.
According to the company, the startups will be selected according to the level technology and innovation is applied to their business proposition, as well as their creativity, strategy and financial performance, as well as their use of data and business intelligence. Nubank also said it wants to support companies that are committed to accelerating the inclusion of under-represented groups and stimulating regional development.
The fund is part of the company’s recent commitments to advance racial equality, which includes a pledge to hire 2,000 black professionals, with at least 22% of them in management roles. The startup, one of the world’s largest digital banks with over 30 million customers, said it wants to do its part to change the realities black founders face in Brazil when seeking capital. According to a study carried out by São Paulo-based accelerator BlackRocks Startups, only 30% of Brazilian startups led by black founders have received support in their entrepreneurial journey compared to 41% of non-black founders.
Also this week, São Paulo-based e-commerce firm Nuvemshop announced a $90 million Series D round led by Accel Partners. Existing backers including Qualcomm Ventures and Kaszek Ventures, have also joined the round. This follows the company’s previous $30 million round announced in October 2020.
The Latin America’s answer to Shopify, the firm has nearly 80,000 merchants on its platform in Brazil, as well as Argentina and Mexico, where it operates as Tiendanube. It provides a one-stop shop for e-commerce small and medium-sized vendors with functionality from hosting and logistics to shipping solutions.
Nuvemshop’s growth accompanies the burgeoning e-commerce market in Latin America. In Brazil alone, the e-commerce segment has grown 41% in 2020, generating the equivalent of $ 15.1 billion, the best performance the segment has recorded since 2007, according to the Webshoppers study conducted by consultancy Ebit/Nielsen in partnership with Brazilian fintech Bexs.