As Brazil’s economy has expanded, the number of Brazilians connected to the Internet has soared from 5 million in 2000 to 67 million in 2008. That represents a rich opportunity for companies hoping to connect to a growing online consumer market. But how? In Brazil, the person to call is Gustavo Caetano, a 28-year-old former computer gamer who is at the forefront of Brazil’s expanding digital streaming industry.
Caetano is the founder and CEO of Samba Tech, a Belo Horizonte-based online video platform that manages companies’ Internet video presence. Their customers include cable companies looking to leapfrog traditional hookups and reach new viewers as well as rich media producers and companies that just want to improve the quality of their video conferencing. “We’ve created a platform that allows a company to publish a video on different devices and for different channels. With one click, you can publish a video on YouTube, your own Web page [or] on a mobile carrier,” says Caetano. He added that the company, which charges clients on a subscription basis, offers an alternative to pricey in-house software and technical infrastructure. His innovative approach has already made Samba Tech a regional leader in the field. The company streams video to 60 million viewers per month and reported profits of $1 million last year. The future looks even brighter: it expects to earn $5 million in 2010.
Samba Tech was originally created to deliver video games on mobile phones. Caetano founded the business with $100,000 reais (about $50,000) from an angel investor in 2004 when he was a marketing student at the Escola Superior de Propaganda e Marketing in Rio de Janeiro. In 2007, as companies like YouTube and Hulu were expanding, Caetano recognized the growing demand for online video content. At the recommendation of a group of MIT consultants that he met during a course at the Sloan School of Management, he dropped mobile games and focused all his efforts on building the largest online video platform in Brazil.
After receiving a $3 million investment from the Minas Gerais-based venture capital fund, Fir Capital Partners, in 2008, the company was able to expand from 15 employees to 45. With a staff of computer scientists and engineers recruited from IBM and Motorola in São Paulo and Rio de Janeiro, Samba Tech was soon providing live streaming for four of the country’s five largest cable companies and landed a contract with Rede Record TV station to stream the 2010 Winter Olympic games. Today, it works directly with national soccer clubs to stream games. In recognition of his work, Caetano was named “Entrepreneur of the Year” in 2009 by the Rio-based business magazine Pequenas Empresas & Grandes Negócios.
Samba Tech has also become a way for companies to outsource their internal communication infrastructure. Companies like the cosmetics giant O Boticário and the magazine publishing house Grupo Abril have hired Caetano and his team to provide support for videoconferencing, remote training and multimedia presentations.
Caetano has already attracted overseas attention. Samba Tech has partnered with Adobe and California-based media distributor Edgecast to expand its reach. Samba Tech will open a Silicon Valley branch this fall to tap into the U.S. market, and the company aims to receive 80 percent of its revenue from foreign customers in five years. But they have no intention of leaving Brazil. Caetano, who has set up a network of young tech companies in Belo Horizonte to help incubate innovation and growth in the field, is dedicated to promoting IT entrepreneurship at home. “We want to show the world that we can also innovate in Brazil,” he says.