I'm a Brazilian, living in São Paulo state. I've lived here for 35 years, and before that lived in a number of other countries. In my current role, I do roughly 50% international travel. There's only one thing I'm certain about this post: it's that most brazilian commenters here will zero in on everything that's wrong about Brazil, regardless of the facts. I don't yet have a grand theory for why this happens, but it usually does. Anyway, on to the topic of the post.
Brazil has a really great startup scene, and there are many small and new companies popping up everywhere with interesting ideas. I've had my own companies participate in acceleration rounds and pitches and have been positively impressed with the quality of the programs and participants. In the past five years, funding has become much easier to get access to, and there are good hubs to exchange ideas and find talent to hire. Lots of interns and trainees coming out of university are hungry and talented, so there's a real talent pool to leverage. And the potential customer base for any class of product is massive.
A lot of the negativity will be around legislation, taxation, etc. From decades of experience both here and abroad, I can say Brazil doesn't deserve it -- it's easy and cheap to start a new company, and while taxes aren't trivial they are for the most part handled entirely by an accountant for a monthly flat fee. Yes, there are some vexing circumstances -- I've had companies subject to double taxation due to bureaucracy, and handling the chain of tax credits for physical goods that cross state boundaries is annoying. But by and large, for software companies, these are not very relevant concerns. And even with physical goods, there are lots of companies doing e-commerce nationwide, so it can't be that bad.
If there is one defining challenge to startups operating in Brazil it is that B2B deals are very slow to close. In my experience this derives from a tendency to undervalue services delivered by small companies, which for young startups is often the meat of a serious B2B contract. You can spend a year working on a 5-digit deal at risk before seeing the first payment from a customer. Often you don't have that runway and have to give up, pivot or die. In comparison, American and European companies tend to be much more agile about buying services. However, the transition to SaaS has made this problem tractable and I have seen many startups selling higher-value SaaS subscriptions successfully.
In summary, if you can manage to ignore the negativity, the country has great potential, and another round of successful startups should follow the existing crop the article mentions.