The main news about tech and innovation in Brazil. This week: patent delays, instant payments, real estate startups
This week. WIPO claims Brazil still world’s slowest in granting patents. PIX completes first year of operations revolutionizing Brazil’s payment system. Startups also want in on Brazilian real estate boom.
WIPO: Brazil world champion in patent delays
Brazil is a country with huge potential for innovation and technology, yet in many areas the country still faces serious problems. According to the World Intellectual Property Indicators Report (WIPI), published this week by the World Intellectual Property Organization (WIPO), Brazil remains the slowest in the world in granting patents, despite having made progress in the last year.
What happened. According to the report, in 2020 Brazil granted 86.4 percent more patents than in the previous year. The rate of increase was higher than in other emerging economies such as China (17.1 percent) and India (11.8 percent).
- A large portion of the 20,407 patents registered in Brazil over the period was done by foreigners. The improvement in the country’s performance was second only to that of the Malaysian patent office, which saw a 99-percent growth in concessions.
- Nevertheless, Brazil still leads in the time it takes to get a patent registered in the country, with a walt of 62.3 months on average (5.19 years).
- Even with the number of pending applications having declined by 20.8 percent in the last year, Brazil still has the largest backlog among emerging economies, with 140,865 applications.
- Moreover, the report noted that patent filings also fell 4.1 percent last year, to 24,338, while the global average saw growth of 1.6 percent.
Why it happened. Roberto Ribeiro, a lawyer specializing in intellectual property, told The Brazilian Report that the situation is due to the economic crisis of recent years and a lack of investment in research and development.
- “This disincentive has certainly led to a decline in interest on the part of investors to conduct research in Brazil or to register a patent here, because of doubts over the stability of our economic situation,” he explained.
- However, Mr. Ribeiro comments that the country is taking positive steps, such as the implementation of a National Institute of Industrial Property (Inpi) plan to combat the patents backlog as well as measures to reduce the bureaucracy involved in obtaining patents, a move that has sped up patent grinding.
- Nevertheless, Mr. Ribeiro reiterates the importance of increasing Inpi’s financial independence so that the funds obtained are used with greater efficiency.
- “In short, the problem is this: too many patent applications, with not enough staff or infrastructure,” he concludes.
PIX completes one year revolutionizing Brazilian payment system
Next week, the Central Bank’s instant payment system, PIX, will celebrate its one-year anniversary, since operations commenced on November 16. The remarkable uptake over this period suggests it is revolutionizing the country’s payment system.
A year in numbers. According to data from the monetary authority, PIX grew more than 600 percent in a year, from 13.7 million individual users to have made at least one transaction by November 2020, to 104,4 million in October of this year.
- The number of “keys” registered in the system, is equally impressive, growing from 95.2 million to 348 million in the same period.
- Corporate accounts, though fewer in absolute number also saw a considerable jump, from 1.1 million to 7.9 million.
- In terms of transactions by both individuals and companies, 33.5 million were made in November last year, in comparison with over 1 billion by the end of September, 2021.
- On traded amounts, PIX shot up from BRL 29.5 million at its creation to BRL 554.4 million by the end of September.
New functionalities. PIX has proven to be a hit in making direct transactions, but it remains relatively disfavored for retail operations, due in particular to the Brazilians’ preference for paying in installments. For this reason, credit cards are still king when paying in stores.
- However, the instant service may become more advantageous for consumers and commercial establishments alike from November 29, when two new functions are due to be implemented: PIX Saque and PIX Troco.
- The former will work like a traditional bank withdrawal, allowing customers to withdraw cash at an ATM or at any store that offers the service through a QR Code.
- The latter is also a type of cash withdrawal, but functioning more like a “cashback system where PIX can be used to make a purchase of goods or services in an establishment, plus a stipulated additional amount. The latter would be instantly given back as cash to the consumer.
- According to the Central Bank, the two new functions are expected to make small businesses more attractive by allowing them to increase their flow of customers, as well as increasing security by reducing the amount of cash in the stores’ register.
Startups also want in on Brazilian real estate boom
With historically low interest rates and a newfound appreciation for the home as a place for leisure as well as work- a trend obviously boosted by the Covid-19 pandemic -, 2020 was a boom year for the Brazilian real estate market. Startups, observing a record number of inaugurations and sales, did not want to be left out.
Proptechs on the rise. Known as proptechs, startups in the real estate segment grew rapidly over the past year. By mid 2021, there were 527 companies in this segment in Brazil and they managed to raise USD 879 million between January and July alone in venture capital investment.
- This amount is at least four times higher than that registered over the entirety of last year.
- The sector also accounts for two of 20 Brazilian unicorns – the real estate platforms QuintoAndar and Loft.
Home sweet home. As well as those giants, a good example of the segment is aMORA, a startup whose target market is still somewhat overlooked by other players: those looking to buy a property through financing, but who lack the usual 20 percent of the total value demanded by banks as a deposit.
- The startup evaluates and purchases the property in question, in return for a 5-percent down payment from the customer, who then pays a monthly fee for three years, after which they decide whether or not to keep the property.
- Over this period, part of the monthly fees goes towards a deposit created by the startup itself, which the client recovers at the end of the contract.
- “The product we offer helps start the process of first-home ownership in a context of higher interest rates and lower purchasing power for Brazilians,” explained Rafael Tellechea Cerqueira, aMORA’s COO, to The Brazilian Report.
Flexible housing. In a different vein, other startups are targetting a niche that sees housing as a service. Housi, for example, is a proptech allowing anyone to rent a house indefinitely.
- “The world today works on demand. People no longer aim for ownership, they want the experience, the service. Housi was created to fulfill this role in the real estate market, offering housing by subscription, without bureaucracy, all in less than a minute,” according to the startup’s CEO, Alexandre Frankel.
- Unicorn. Known as the “Uber of freight”, Brazilian startup CargoX connects truck drivers with carriers and is the newest Brazilian unicorn. With a USD 200 million investment led by the Chinese company Tencent and the Japanese fund SoftBank, the company now aims to become the segment’s “Mercado Livre”, changing its name to Frete.com and creating a fintech focused on loans for truckers called. Frete Pago.
- iFood. IFood Pedal is one year old and has reached the milestone of 1 million deliveries made by more than 13,000 couriers. The startup is a partnership between the main delivery app in Brazil with the urban mobility startup Tembici, which makes electric bicycles available for deliveries at low cost. The project, which already operates in São Paulo and Rio de Janeiro, will now be taken to four more Brazilian state capitals, with more 2,500 electric bikes.
- Connectivity. The American satellite internet company Viasat announced this week that it will enter Latin America as an internet provider by targeting remote communities in regions with limited connectivity. The company aims to win over customers where traditional telecoms in the region have failed to make inroads.
- Fake news. Facebook and Instagram announced on Thursday that they removed more than 1 million posts that contained serious misinformation about Covid-19 in Brazil. The platforms claim that they use WHO criteria, with whom they work in partnership. Examples of fake news and content are statements denying the existence of the pandemic, or that Covid-19 vaccines can leado death and other illnesses such as AIDS or autism.
- Digital bank. As fintechs are challenging big banks around the globe, Brazilian bank Bradesco’s chief executive, Octavio de Lazari, signaled during a meeting with investors this week that the institution is considering expanding its digital bank operations to countries like Mexico and the United States. Currently, the bank’s digital operations involve three brands: Next, Digio and Bitz.
- 5G. Anatel, Brazil’s telecoms regulator, announced that operator Fly Link has given up the frequency It won at the 5G auction last week and will have to pay a fine.
Article published on The Brazilian Report.