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President Bolsonaro should boost Brazil’s entrepreneurial ecosystem

President Bolsonaro should boost Brazil’s entrepreneurial ecosystem

In late October following a significant victory for Jair Bolsonaro in Brazil’s presidential elections, the stock market for Latin America’s largest country shot up. Financial markets reacted favorably to the news because Bolsonaro, a free-market proponent, promises to deliver broad economic reforms, fight corruption and work to reshape Brazil through a pro-business agenda. While some have dubbed him as a far-right “Trump of the Tropics” against a backdrop of many Brazilians feeling that government has failed them, the business outlook is extremely positive.

When President-elect Bolsonaro appointed Santander executive Roberto Campos as new head of Brazil’s central bank in mid-November, Brazil’s stock market cheered again with Sao Paulo’s Bovespa stocks surging as much as 2.65 percent on the day news was announced. According to Reuters, “analysts said Bolsonaro, a former army captain and lawmaker who has admitted to having scant knowledge of economics, was assembling an experienced economic team to implement his plans to slash government spending, simplify Brazil’s complex tax system and sell off state-run companies.”

Admittedly, there are some challenges as well. Most notably, pension-system reform tops the list of priorities to get on the right track quickly. A costly pension system is increasing the country’s debt and contributed to Brazil losing its investment-grade credit rating in 2015. According to the new administration, Brazil’s domestic product could grow by 3.5 percent during 2019 if Congress approves pension reform soon. The other issue that’s cropped up to tarnish the glow of Bolsonaro coming into power are suspect payments made to his son that are being examined by COAF, the financial crimes unit.

While the jury is still out on Bolsonaro’s impact on Brazilian society at large after being portrayed as the Brazilian Trump by the opposition party, he’s come across as less authoritarian during his first days in office. Since the election, his tone is calmer and he’s repeatedly said that he plans to govern for all Brazilians, not just those who voted for him. In his first speech as president, he invited his wife to speak first which has never happened before.

Still, according to The New York Times, “some Brazilians remain deeply divided on the new president, a former army captain who has hailed the country’s military dictators and made disparaging remarks about women and minority groups.”

Others have expressed concern about his environment impact with the “an assault on environmental and Amazon protections” through an executive order within hours of taking office earlier this week. However, some major press outlets have been more upbeat: “With his mix of market-friendly economic policies and social conservativism at home, Mr. Bolsonaro plans to align Brazil more closely with developed nations and particularly the U.S.,” according to the Wall Street Journal this week.

Based on his publicly stated plans, here’s why President Bolsonaro will be good for business and how his administration will help build an even stronger entrepreneurial ecosystem in Brazil:

Bolsonaro’s Ministerial Reform

President Temer leaves office with 29 government ministries. President Bolsonaro plans to reduce the number of ministries to 22, which will reduce spending and make the government smaller and run more efficiently. We expect to see more modern technology implemented to eliminate bureaucratic red tape and government inefficiencies.

Importantly, this will open up more partnerships and contracting of tech startups’ solutions. Government contacts for new technology will be used across nearly all the ministries including mobility, transportation, health, finance, management and legal administration – which will have a positive financial impact especially for the rich and booming SaaS market players in Brazil.

Government Company Privatization

Of Brazil’s 418 government-controlled companies, there are 138 of them on the federal level that could be privatized. In comparison to Brazil’s 418, Chile has 25 government-controlled companies, the U.S. has 12, Australia and Japan each have eight, and Switzerland has four. Together, Brazil-owned companies employ more than 800,000 people today, including about 500,000 federal employees. Some of the largest ones include petroleum company Petrobras, electric utilities company EletrobrasBanco do Brasil, Latin America’s largest bank in terms of its assets, and Caixa Economica Federal, the largest 100 percent government-owned financial institution in Latin America.

The process of privatizing companies is known to be cumbersome and inefficient, and the transformation from political appointments to professional management will surge the need for better management tools, especially for enterprise SaaS solutions.

STEAM Education to Boost Brazil’s Tech Talent

Based on Bolsonaro’s original plan to move the oversight of university and post-graduate education from the Education Ministry to the Science and Technology Ministry, it’s clear the new presidential administration is favoring more STEAM courses that are focused on Science, Technology, Engineering, the Arts and Mathematics.

Previous administrations threw further support behind humanities-focused education programs. Similar STEAM-focused higher education systems from countries such as Singapore and South Korea have helped to generate a bigger pipeline of qualified engineers and technical talent badly needed by Brazilian startups and larger companies doing business in the country. The additional tech talent boost in the country will help Brazil better compete on the global stage.

The Chicago Boys’ “Super” Ministry

The merger of the Ministry of Economy with the Treasury, Planning and Industry and Foreign Trade and Services ministries will create a super ministry to be run by Dr. Paulo Guedes and his team of Chicago Boys. Trained at the Department of Economics in the University of Chicago under Milton Friedman and Arnold Harberger, the Chicago Boys are a group of prominent Chilean economists who are credited with transforming Chile into Latin America’s best performing economies and one of the world’s most business-friendly jurisdictions. Joaquim Levi, the recently appointed chief of BNDES (Brazilian Development Bank), is also a Chicago Boy and a strong believer in venture capital and startups.

Previously, Guedes was a general partner in Bozano Investimentos, a pioneering private equity firm, before accepting the invitation to take the helm of the world’s eighth-largest economy in Brazil. To have a team of economists who deeply understand the importance of rapid-growth companies is good news for Brazil’s entrepreneurial ecosystem. This group of 30,000 startup companies are responsible for 50 percent of the job openings in Brazil and they’re growing far faster than the country’s GDP.

Bolsonaro’s Pro-Business Cabinet Appointments

President Bolsonaro has appointed a majority of technical experts to be part of his new cabinet. Eight of them have strong technology backgrounds, and this deeper knowledge of the tech sector will better inform decisions and open the way to more funding for innovation.

One of those appointments, Sergio Moro, is the federal judge for the anti-corruption initiative knows as “Operation Car Wash.” With Moro’s nomination to Chief of the Justice Department and his anticipated fight against corruption could generate economic growth and help reduce unemployment in the country. Bolsonaro’s cabinet is also expected to simplify the crazy and overwhelming tax system. More than 40 different taxes could be whittled down to a dozen, making it easier for entrepreneurs to launch new companies.

In general terms, Brazil and Latin America have long suffered from deep inefficiencies. With Bolsonaro’s administration, there’s new promise that there will be an increase in long-term infrastructure investments, reforms to reduce corruption and bureaucratic red tape, and enthusiasm and support for startup investments in entrepreneurs who will lead the country’s fastest-growing companies and make significant technology advancements to “lift all boats.”

President Bolsonaro should boost Brazil’s entrepreneurial ecosystem
Source: TechCrunch

Mental well-being took center stage at CES 2019

Mental well-being took center stage at CES 2019

This week, the Las Vegas Convention Center was packed with many of the year’s biggest new devices. But over the last several years, The Sands has become the place where the real magic happens. The segment of the show known as Eureka Park is where the startups and accelerators congregate, often times showing off products that are still years away.

A quick walk around the floor (insofar as someone can walk quickly with that much humanity slowly shuffling through the halls) sheds a lot of light on the industry’s biggest trends. Plenty are holdovers from previous years — smart home and wearables continue to dominate —  but others offer insight into where the next several years of technology may be going.

One key trend that absolutely exploded this past year is mental well-being. Between the sleep, relaxation, concentration and meditation products on display, you couldn’t walk five feet without encountering another pitch. The list includes some familiar faces (to us, at least) like the Muse meditation and sleep headsets and a whole slew of new entrants.

The trajectory tracks if you consider many of these products a kind of extension of the fitness trackers that were all the rage a few years back. First startups pushed to keep our bodies in shape, moving on to sleep tracking and, eventually, our minds. The accessibility of sensors that can track things like basic brain activity have helped push the concept along.

It’s a worthy cause, of course. The proliferation of many technologies has done some pretty rough stuff to our bodies and brains over the years. Wouldn’t it be great if tech could also turn that around.

In many cases, the use is clear. Decades of scientific studies have demonstrated the value simply sitting quietly during meditation practice can have on your stress levels and mental health. If a product can help you get into a routine, great. But there’s an even larger opportunity for snake oil salespeople than we saw on the fitness side.

Certainly the FDA has a role to play, ensuring that companies can’t make untested medical claims for their products, but much of the burden here will ultimately be placed on journalist and consumer alike. When it comes to this category, the placebo effect is very real.

Mental well-being took center stage at CES 2019
Source: TechCrunch

An unsecured database exposed the personal details of 202M job seekers in China

An unsecured database exposed the personal details of 202M job seekers in China

The personal details belonging to more than 202 million job seekers in China, including information like phone numbers, email addresses, driver licenses and salary expectations, were freely available to anyone who knew where to look for as long as three years due to an insecure database.

That’s according to findings published by security researcher Bob Diachenko who located an open and unprotected MongoDB instance in late December which contained 202,730,434 “very detailed” records. The database was indexed in data search engines Binary Edge and Shodan, and was freely visible without a password or login. It was only made private after Diachenko released information about its existence on Twitter.

Diachenko, who is director of cyber risk research at Hacken, wasn’t able to match the database with a specific service, but he did locate a three-year-old GitHub repository for an app that included “identical structural patterns as those used in the exposed resumes.” Again, ownership is not clear at this point although the records do seem to contain data that was scraped from Chinese classifieds, including the Craigslist-like 58.com.

A 58.com spokesperson denied that the records were its creation. They instead claimed that their service had been the victim of scraping from a third-party.

“We have searched all over the database of us and investigated all the other storage, turned out that the sample data is not leaked from us. It seems that the data is leaked from a third party who scrape[d] data from many CV websites,” a spokesperson told Diachenko.

TechCrunch contacted 58.com but we have not yet received a response.

While the database has now been secured, it was potentially vulnerable for up to three years and there’s already evidence that it had been regularly accessed. Although, again, it isn’t clear who by.

“It’s worth noting that MongoDB log showed at least a dozen IPs who might have accessed the data before it was taken offline,” Diachenko wrote.

There’s plenty of mystery here — it isn’t clear whether 58.com was behind the hole, or if it is a rival service or a scraper — but what is more certain is that the vulnerability is one of the largest of its kind to be found in China.

An unsecured database exposed the personal details of 202M job seekers in China
Source: TechCrunch

Crypto mining giant Bitmain is reportedly getting a new CEO as its IPO plan stalls

Crypto mining giant Bitmain is reportedly getting a new CEO as its IPO plan stalls

Crypto mining giant Bitmain is reportedly getting a new CEO as its IPO plan stalls

Bitmain, the Chinese crypto miner maker, looks like it has reached an interesting point in its pathway to going public. There’s been little heard since the company filed to go public in Hong Kong in September, but now it appears that a new CEO has been hired and its two founders are leaving.

That’s according to a report from SCMP which — citing two sources — said Wang Haichao, Bitmain’s director of product engineering, has assumed CEO duties following a transition that began in December. Founders Wu Jihan (pictured above) and Zhan Ketuan will be co-chairs with Wang described as the “potential successor.”

The publication said that it isn’t clear when a new CEO will be named, or indeed whether an outside appointment will be made.

Bitmain declined to comment on the report when asked by TechCrunch.

The company, which is said to have been valued as high as $15 billion, certainly appears to have stalled with its IPO following the filing of an application on September 26. That document opened up a treasure trove of financial information regarding the company, which is estimated to supply around three-quarters of the world’s crypto mining machines.

Indeed, Bitmain’s IPO filing showed heady growth in revenue. The company grossed more than $2.5 billion in revenue in 2017, a near-10X leap on the $278 million it claimed for 2016, while sales in the first six months of last year surpassed $2.8 billion.

However, there were no figures for Q3 2018 and, since September, the price of Bitcoin and other cryptocurrency has plummeted further still, therein reducing the appeal of buying a mining machine and likely impacting Bitmain’s sales.

Bitmain saw impressive revenue growth as the crypto market grew, but it isn’t clear how the business weathered the price slump that affected the market in 2017

We reported that the company likely made a loss of around $400 million in that Q3 quarter. Things are likely to have been trickier still in Q4, as crypto prices dropped so low that mining companies in China were reported to be selling off machines because the cost of power to mine was lower than the reward for doing so.

Bitmain has diversified into non-mining services, to its credit, but its efforts to grow Bitcoin Cash — a controversial fork of Bitcoin — have been controversial and likely loss-making, to boot.

The price of Bitcoin Cash is currently $162 at the timing of writing, that’s down significantly from around $2,500 one year ago. That doesn’t bode well for Bitmain’s investment into the cryptocurrency, and it likely explains why the company has made layoffs, like others in the crypto space.

What a difference four months can make. The challenge for the company’s (apparent) new CEO is certainly a daunting one.

But Bitmain’s struggle isn’t unprecedented. Just this week, its closest rival — Canaan — was linked with a U.S. IPO. The company had planned to go public in Hong Kong last year but it allowed its application to expire as crypto market prices went south.

There’s plenty to watch out for in the mining space in 2019!

Editorial note: The author owns a small amount of cryptocurrency. Enough to gain an understanding, not enough to change a life.

Crypto mining giant Bitmain is reportedly getting a new CEO as its IPO plan stalls
Source: TechCrunch

Baidu announces Apollo Enterprise, its new platform for mass-produced autonomous vehicles

Baidu announces Apollo Enterprise, its new platform for mass-produced autonomous vehicles

Baidu made several big announcements about Apollo, its open-source autonomous vehicle technology platform, today at CES. The first is the launch of Apollo Enterprise for vehicles that will be put into mass production. The company claims that Apollo is already used by 130 partners around the world. One of its newest partners, Chinese electric vehicle startup WM Motors, plans to deploy level 3 autonomous vehicles by 2021.

Apollo Enterprise’s main product lines will include solutions for highway autonomous driving; autonomous valet parking; fully autonomous mini-buses; an intelligent map data service platform; and DuerOS (Baidu’s voice assistant) for cars.

Baidu also released Apollo 3.5, the latest version of its platform, which now supports “complex urban and suburban driving environments.” Apollo 3.5 is already used by customers including Udelv, an autonomous delivery van startup that recently partnered with Walmart to test grocery deliveries. Baidu says up to 100 self-driving vehicles based on Apollo 3.5 will be deployed in the San Francisco Bay Area and other regions in the United States.

In China, Baidu plans to launch 100 robo-taxis that will cover 130 miles of city roads in Changsha, the capital city of Hunan province. The robo-taxis will use Baidu’s V2X (i.e. vehicle-to-everything) technology, to enable them to communicate with road infrastructure, like traffic lights.

Baidu announces Apollo Enterprise, its new platform for mass-produced autonomous vehicles
Source: TechCrunch