São Paulo Concentrates Over Half Of All AI Startups In Brazil

The state of São Paulo concentrates more than half of all companies focused on development of products and services around artificial intelligence, according to a new study.

Considering the 702 startups currently active in the AI space mapped in the study by open innovation firm Distrito in association with KPMG, the state of São Paulo concentrates 51,9% of all companies.

From a regional perspective, the South East of Brazil, which includes the states of São Paulo and Rio de Janeiro, concentrate 70,2% of the IA startups, followed by the South (22,5%), Northeast (3.7%), Midwest (3.2%) and North (0.3%) of the country.

Of all the companies mapped in the study, 479 develop solutions for specific industries, while 223 cater for various segments of the market. The health and biotechnology space concentrates largest number of startups (12.5%), followed by Human Resources and personnel management (10%), and manufacturing, as well as agriculture and food, both accounting for 9.6% of all startups in the AI field.

When it comes to companies serving organizations from various industries, the most common type of business is startups providing AI as-a-service (AIaaS) with 34.1%, followed by those offering business intelligence and analytics services (30.9%), data management and market intelligence; chatbots (19.3%); cybersecurity (9.4%); and recommendations systems that suggest products based on users' current and predicted behavior (6.3%).

Among the study's findings, there is a point regarding lack of diversity: new companies focused on AI have one of the greatest gender inequalities in the national ecosystem when it comes to their corporate structure: only 13.5% of the founders in these companies are women, and the startups are typically led by men aged 40, mostly hailing from São Paulo.

According to the study, Brazilian startups focused on AI solutions have raised $839 million since 2012, through 274 funding rounds, with 2020 being the busiest year in terms of investment volume.