Biotechnology is leading the deep tech scene in Brazil, but faces challenges related to infrastructure and private investment

According to a report by the consulting firm Emerge, almost half of the 952 science-based startups mapped in the country develop solutions in this area, especially for the health and agribusiness sectors.

By Elton Alisson  |  Agência FAPESP – Most science and technology-based startups in Brazil operate in the biotechnology sector. Of the 952 deep tech companies identified in the country, nearly half (433) develop solutions in this area, primarily for the health and agribusiness sectors.

To overcome the “valley of death” and bring their innovations from the laboratory to market, Brazilian biotech companies face several challenges. These include difficulty accessing research infrastructure for initial technology validation, low appeal to private investors, and an absence of managers with market knowledge and experience among their staff.

The findings are from the Deep Tech Radar Brasil 2025 report, prepared by the consulting firm Emerge, in partnership with Cubo Itaú, the innovation hub of Brazil’s largest private bank. Some of the study’s main conclusions were presented at the 2nd Agro-Health Congress, which took place on September 17 and 18 in Ribeirão Preto, in the interior of the Brazilian state of São Paulo.

“Biotechnology is one of the natural birthplaces of deep tech companies, as it’s a cutting-edge technological field where the goal is to advance research and development [R&D] at the frontier of knowledge. It’s no coincidence that almost half of Brazilian science-based startups operate in this sector,” said Douglas Veronez, project manager at Emerge.

“These companies have developed solutions primarily aimed at the healthcare and agribusiness sectors, but also at industry and manufacturing, energy and climate, urban infrastructure, mining, and oil and gas, since biotechnology is a cross-cutting field with applications in various sectors,” he said.

According to the expert, 74% of Brazilian deep tech companies – mostly biotech companies – are in the technology development stage and have not yet generated revenue.

According to the authors of the report, one of the challenges faced by biotech startups at this stage is access to expensive research infrastructure located in research and development centers at public and private scientific, technological, and innovation institutions (ICTs), as well as some non-profit organizations.

“Accessing this infrastructure is a challenge for emerging biotechnology companies in Brazil, which need laboratories for initial validation, scaling, or pilot plants to develop the first batch of their products, for example. We need to resolve access to infrastructure that’s free of bureaucracy and, if possible, certified, so that biotech companies in the country can overcome this challenge,” said Veronez.

The expert pointed out that recent legislation, such as the new Legal Framework for Science, Technology, and Innovation, promises to help reduce this bottleneck. Approved by the Brazilian Congress in 2016, the new legislation, known as the “Innovation Law,” provides for the creation of mechanisms that allow universities, research institutes, and companies to collaborate by sharing laboratories, for example. Through this law, deep tech companies could conduct research in partnership with ICT research groups or pay for the use of laboratory infrastructure.

“There are several forms of cooperation provided for in this law, but in practice, very few ICTs are using this space-sharing model,” said Veronez. “We know of some cases of startups that have managed, through R&D agreements with universities, to access, develop research, and use this external infrastructure for validation. But to build a pilot plant, for example, is more complicated.”

New scientific infrastructure

Rafael Della Giustina Leal, head of the science, technology, and innovation division of the Brazilian Ministry of Foreign Affairs – also known as Itamaraty – emphasized in a lecture at the opening of the event that in addition to facilitating access, the creation of new research infrastructure is essential for the formation of a biotech ecosystem in Brazil.

One advance in this area was the construction of Sirius at the Brazilian Center for Research in Energy and Materials (CNPEM) in Campinas. This circular accelerator of charged particles (electrons) generates radiation called synchrotron light, which allows the composition and structure of matter to be investigated at the atomic and molecular scale. It works like a giant microscope, capable of revealing the interior of materials, biological tissues, and pathogens. It has applications in virtually all areas of knowledge.

“Sirius is a fourth-generation synchrotron light source. There are only three in the world, and the Brazilian one was the last to be built,” said Leal. In the coming years, through the Orion project, Sirius will be coupled with the first maximum biological containment laboratory (biosafety level four – NB4) in Latin America, as well as the first of its kind in the world to be connected to a synchrotron light source.

“Imagine how many ideas, companies, products, and businesses could emerge when this laboratory is up and running,” Leal estimated.

According to the ambassador, much of the world is unaware of Brazil’s research infrastructure and its advancements in biotechnology, particularly in strategic sectors such as agribusiness and health. He pointed out that this lack of awareness affects foreign investment decisions in Brazilian biotech companies.

“A Brazilian startup trying to raise funds abroad already starts with this image attached. There are several cases of Brazilian startups that have established themselves in Silicon Valley and present themselves as American startups, even though all the technology is Brazilian,” he pointed out.

To reduce the gap between how Brazil is perceived and its actual standing in frontier areas of knowledge, such as biotechnology, Itamaraty has been active in innovation diplomacy in recent years. This approach uses tools from the Ministry of Foreign Affairs to promote Brazilian innovation, Leal explained.

“One of the objectives of Itamaraty’s actions in this area is to engage Brazilian science and technology-based companies in the internationalization process, take and showcase the best solutions abroad, and facilitate, through embassies and consulates, contact with potential partners and investors,” he explained.

Dependence on public capital

According to the authors of the report, Brazilian biotech companies heavily rely on public funding to advance the development of innovative products and processes because the initial risk is very high.

“Because their R&D and market risk is very high, private capital doesn’t enter. Therefore, they need to resort to public funding. And FAPESP is currently the main agency in Brazil that promotes, through PIPE [Innovative Research in Small Businesses Program], the creation and development of innovations by science-based startups in the country,” said Veronez.

According to data from the report, 47% of Brazilian deep tech companies have not received any type of public or private investment. “These companies are developing with bootstrapping [their own resources] as best they can,” said Veronez.

“It’s very rare for these companies to receive private investment in the early stages of technological development because the risk is very high. Therefore, they need to raise public funds. But as they evolve, they need to try to attract private investment, including obtaining an endorsement of the potential of the solutions they’re developing. And that counts for a lot in the investment market,” said Veronez.

According to the report, the value of investments made in deep tech companies in Brazil in recent years has been up to BRL 200,000. While this amount helps sustain the companies in the initial phase, it falls far short of their development and scalability needs. The expert explained that this low value reflects the profile of private investment in science-based startups in Brazil, which is still heavily concentrated in angel capital.

“Larger investments from venture capital still account for a very small proportion of the total private funds raised by Brazilian deep tech companies,” he said.

Veronez pointed out that this type of private investment is precisely what science-based startup entrepreneurs should pursue. In addition to providing a larger volume of resources, venture capital funds help investee companies navigate the ecosystem better and develop faster.

“In addition to providing financial resources, venture capital funds contribute business experience, which is often lacking in teams that start science-based startups,” he said.

According to Thomas Carolla, a partner at private equity investment manager 10b, venture capital funds account for less than 5% of investments in biotech companies in Brazil. “There’s still a lot of room for growth,” he concluded.