Will Brazil’s Roaring 20s see the rise of early-stage startups?

Since 2007, the number of publicly listed companies in Brazil has decreased from 400 to just a little over 300.

In the past six years there were only 21 IPOs — an average of just 3.5 public exits per year; by 2019, even Iran had more listed companies than Brazil. Global capital markets are heated given pandemic stimulus packages and low interest rates worldwide, but in Brazil the boom comes with a special feature: in Q3 2020, there were 25 primary and secondary equity offerings, and this year is on track to be the most active in history both in number of deals and dollar volume.

The most important event, however, is not necessarily the reversal of a shrinking public market but the fact that startups are issuing stocks for the first time, a dramatic change for a market previously dominated by industries like commodities and utilities.

Growth versus value: Revert the shrinking market and internet companies

Not only is Brazil’s IPO market roaring, the waitlist is even more impressive: More than 47 companies have filed at CVM (equivalent to the the Securities and Exchange Commission) to issue equity and are waiting for approval. In other words, the IPO is equivalent to more than 15% of the number of publicly listed companies. In the first half of October, six companies were approved to issue equity. Obviously construction and retail names are still predominant as they take advantage of the lower rates, but the main novelty are new entrants in internet and technology.

In the past decade, there were 56 IPOs in Brazil and only two were in the software space, both in 2013. That is a reflection of the profile of the investors who dominate local markets, which are used to allocating assets to companies in sectors like oil, paper and cellulose, mining or utilities. Historically, publicly listed companies in the country were value plays, as few of them had significant exposure to the domestic market and derived a significant share of revenue from commodities and exports.

As a result, companies that focused on the domestic market or on growth were never quite embraced by local investors. Many investors deploying capital in Brazil were mostly foreign and very risk-averse to the dynamics of the domestic market; in 2007, when Brazil went through a similar IPO boom, 70 percent of the demand for equity offerings came from foreign investors.

Along with an undervalued currency, growth companies struggled to find attractive valuations on the local exchange. As a result, growth companies such as Stone Payments, Netshoes, PagSeguro, Arco Educação and XP Investimentos did their IPOs in New York where they attained higher valuations. It’s ironic that there were three times more IPOs of Brazilian growth companies in the U.S. in the past five years than there were in the domestic market in the last decade.

Roaring 20s: New investors and massive portfolio relocations

Ride Vision raises $7M for its AI-based motorcycle safety system

Ride Vision, an Israeli startup that is building an AI-driven safety system to prevent motorcycle collisions, today announced that it has raised a $7 million Series A round led by crowdsourcing platform OurCrowd. YL Ventures, which typically specializes in cybersecurity startups but also led the company’s $2.5 million seed round in 2018, Mobilion VC and motorcycle mirror manufacturer Metagal also participated in this round. The company has now raised a total of $10 million.

In addition to this new funding round, Ride Vision also today announced a new partnership with automotive parts manufacturer Continental .

“As motorcycle enthusiasts, we at Ride Vision are excited at the prospect of our international launch and our partnership with Continental,” Uri Lavi, CEO and co-founder of Ride Vision, said in today’s announcement. “This moment is a major milestone, as we stride toward our dream of empowering bikers to feel truly safe while they enjoy the ride.”

The general idea here is pretty straightforward and comparable with the blind-spot monitoring system in your car. Using computer vision, Ride Vision’s system, the Ride Vision 1, analyzes the traffic around a rider in real time. It provides forward collision alerts and monitors your blind spot, but it can also tell you when you’re following another rider or car too closely. It can also simply record your ride and, coming soon, it’ll be able to make emergency calls on your behalf when things go awry.

As the company argues, the number of motorcycles (and other motorized two-wheeled vehicles) has only increased during the pandemic, as people started avoiding public transport and looked for relatively affordable alternatives. In Europe, sales of two-wheeled vehicles increased by 30% during the pandemic.

The hardware on the motorcycle itself is pretty straightforward. It includes two wide-angle cameras (one each at the front and rear), as well as alert indicators on the mirrors, as well as the main computing unit. Ride Vision has patents on its human-machine warning interface and vision algorithms.

It’s worth noting that there are some blind-spot monitoring solutions for motorcycles on the market already, including those from Innovv and Senzar. Honda also has patents on similar technologies. These do not provide the kind of 360-degree view that Ride Vision is aiming for.

Ride Vision says its products will be available in Italy, Germany, Austria, Spain, France, Greece, Israel and the U.K. in early 2021, with the U.S., Brazil, Canada, Australia, Japan, India, China and others following later.

Warren gets $1.4 million to help local cloud infrastructure providers compete against Amazon and other giants

Started as a side project by its founders, Warren is now helping regional cloud infrastructure service providers compete against Amazon, Microsoft, IBM, Google and other tech giants. Based in Tallinn, Estonia, Warren’s self-service distributed cloud platform is gaining traction in Southeast Asia, one of the world’s fastest-growing cloud service markets, and Europe. It recently closed a $1.4 million seed round led by Passion Capital, with plans to expand in South America, where it recently launched in Brazil.

Warren’s seed funding also included participation from Lemonade Stand and angel investors like former Nokia vice president Paul Melin and Marek Kiisa, co-founder of funds Superangel and NordicNinja.

The leading global cloud providers are aggressively expanding their international businesses by growing their marketing teams and data centers around the world (for example, over the past few months, Microsoft has launched a new data center region in Austria, expanded in Brazil and announced it will build a new region in Taiwan as it competes against Amazon Web Services).

But demand for customized service and control over data still prompt many companies, especially smaller ones, to pick local cloud infrastructure providers instead, Warren co-founder and chief executive officer Tarmo Tael told TechCrunch.

“Local providers pay more attention to personal sales and support, in local language, to all clients in general, and more importantly, take the time to focus on SME clients to provide flexibility and address their custom needs,” he said. “Whereas global providers give a personal touch maybe only to a few big clients in the enterprise sectors.” Many local providers also offer lower prices and give a large amount of bandwidth for free, attracting SMEs.

He added that “the data sovereignty aspect that plays an important role in choosing their cloud platform for many of the clients.”

In 2015, Tael and co-founder Henry Vaaderpass began working on the project that eventually became Warren while running a development agency for e-commerce sites. From the beginning, the two wanted to develop a product of their own and tested several ideas out, but weren’t really excited by any of them, he said. At the same time, the agency’s e-commerce clients were running into challenges as their businesses grew.

Tael and Vaaderpass’s clients tended to pick local cloud infrastructure providers because of lower costs and more personalized support. But setting up new e-commerce projects with scalable infrastructure was costly because many local cloud infrastructure providers use different platforms.

“So we started looking for tools to use for managing our e-commerce projects better and more efficiently,” Tael said. “As we didn’t find what we were looking for, we saw this as an opportunity to build our own.”

After creating their first prototype, Tael and Vaaderpass realized that it could be used by other development teams, and decided to seek angel funding from investors, like Kiisa, who have experience working with cloud data centers or infrastructure providers.

Southeast Asia, one of the world’s fastest-growing cloud markets, is an important part of Warren’s business. Warren will continue to expand in Southeast Asia, while focusing on other developing regions with large domestic markets, like South America (starting with Brazil). Tael said the startup is also in discussion with potential partners in other markets, including Russia, Turkey and China.

Warren’s current clients include Estonian cloud provider Pilw.io and Indonesian cloud provider IdCloudHost. Tael said working with Warren means its customers spend less time dealing with technical issues related to infrastructure software, so their teams, including developers, can instead focus on supporting clients and managing other services they sell.

The company’s goal is to give local cloud infrastructure providers the ability to meet increasing demand, and eventually expand internationally, with tools to handle more installations and end users. These include features like automated maintenance and DevOps processes that streamline feature testing and handling different platforms.

Ultimately, Warren wants to connect providers in a network that end users can access through a single API and user interface. It also envisions the network as a community where Warren’s clients can share resources and, eventually, have a marketplace for their apps and services.

In terms of competition, Tael said local cloud infrastructure providers often turn to OpenStack, Virtuozzo, Stratoscale or Mirantis. The advantage these companies currently have over Warren is a wider network, but Warren is busy building out its own. The company will be able to connect several locations to one provider by the first quarter of 2021. After that, Tael said, it will “gradually connect providers to each other, upgrading our user management and billing services to handle all that complexity.”

Microsoft announces its first Azure data center region in Taiwan

After announcing its latest data center region in Austria earlier this month and an expansion of its footprint in Brazil, Microsoft today unveiled its plans to open a new region in Taiwan. This new region will augment its existing presence in East Asia, where the company already runs data centers in China (operated by 21Vianet), Hong Kong, Japan and Korea. This new region will bring Microsoft’s total presence around the world to 66 cloud regions.

Similar to its recent expansion in Brazil, Microsoft also pledged to provide digital skilling for over 200,000 people in Taiwan by 2024 and it is growing its Taiwan Azure Hardware Systems and Infrastructure engineering group, too. That’s in addition to investments in its IoT and AI research efforts in Taiwan and the startup accelerator it runs there.

“Our new investment in Taiwan reflects our faith in its strong heritage of hardware and software integration,” said Jean-Phillippe Courtois, Executive Vice President and President, Microsoft Global Sales, Marketing and Operations. “With Taiwan’s expertise in hardware manufacturing and the new datacenter region, we look forward to greater transformation, advancing what is possible with 5G, AI and IoT capabilities spanning the intelligent cloud and intelligent edge.”

Image Credits: Microsoft

The new region will offer access to the core Microsoft Azure services. Support for Microsoft 365, Dynamics 365 and Power Platform. That’s pretty much Microsoft’s playbook for launching all of its new regions these days. Like virtually all of Microsoft’s new data center region, this one will also offer multiple availability zones.

Gen Z spends 10% more time in non-game apps than older users

A new report released today by App Annie digs into how Gen Z consumers engage with their smartphones and mobile apps. According to data collected in Q3 2020, Gen Z users spend an average of 4.1+ hours per month in top non-gaming apps, or 10% longer than older demographics. They also engage with apps more often, with 20% more sessions per user in non-gaming apps, at 120 sessions per month per app, compared with older groups.

This app engagement data is only a view into Gen Z trends, but is an incomplete analysis, as it only focuses on select markets, including the U.S., U.K., Brazil, France, Germany, Indonesia, Japan, Mexico, South Korea and Turkey. It also included only data collected from Android devices, which doesn’t provide as full a picture.

App Annie found that Gen Z is more likely to use games than older users, but they don’t access them as often or use them as long. Those ages 25 and older actually spent nearly 20% longer in their most-used games and accessed them 10% more frequently. Both demographics spent more total time gaming than using non-game apps, on a monthly basis.

Image Credits: App Annie; data focuses on top 25 non-game apps by MAUs, excluding preinstalled apps, on Android in select markets

One breakout in the games category for Gen Z users, however, was the casual arcade game Among Us!, which just became the third-most played game worldwide, thanks to its team-based multiplayer features and the surge of Twitch streams. When Rep. Alexandria Ocasio-Cortez played the game on Twitch last night, it became one of the biggest-ever Twitch streams, peaking at 435,000 concurrent viewers.

Other popular Gen Z games include Match-3 games like Candy Crush Saga and Toon Blast, action games like PUBG Mobile and Free Fire, and casual simulation games like Minecraft Pocket Edition and Roblox.

Image Credits: App Annie

The report also examined what apps Gen Z users prefer across a range of non-game categories across both iOS and Android.

TikTok and Snapchat, in particular, stood out as the top over-indexed social and communication apps among Gen Z in nine out of the 10 markets analyzed for this report. This comes on the heels of Snap’s blowout earnings yesterday, where the social app topped analyst expectations and saw daily user growth climb 4% to 238 million.

Discord is also seeing strong growth, particularly in France, as mobile and remote gaming has become an epicenter of social interactions during the pandemic.

Image Credits: App Annie

Among entertainment apps, Twitch was the top over-indexed app in six out of the 10 markets for Gen Z users, though live streaming niconico was popular in Japan.

App Annie found that finance and shopping apps haven’t yet reached a broad Gen Z audience, but are demonstrating promising growth.

Image Credits: App Annie

Few finance apps over-index with Gen Z, though the demographic tends to interact with non-bank fintech apps like Venmo, Monzo and DANA. In South Korea, a top app was peer-to-peer payments app Toss, which also offers loans, insurance and credit.

Top Gen Z fashion apps, meanwhile, included Shein, ASOS, Shopee and Mercari.

Overall, active Gen Z users are rising faster across the markets analyzed, compared with older groups, with emerging markets like Indonesia and Brazil seeing the most growth.

Image Credits: App Annie

App Annie noted that Gen Z is becoming one of the most powerful consumer segments on mobile, as 98% own a smartphone and have a combined estimated spending power of $143 billion annually.

“Gen Z has never known a world without their smartphone. They see the world through this mobile first lens,” said Ted Krantz, CEO, App Annie, in a statement about the report’s findings.

Which neobanks will rise or fall?

The neobank, or digital bank, phenomenon continues to take the world by storm, with global winners, from Brazil’s Nubank valued at $10 billion and Berlin’s N26 valued at $3.5 billion, to Chime, now valued at $14.5 billion as the most valuable consumer fintech in the United States.

Neobanks have led the charge of the $3.6 billion in venture capital funding for consumer fintech startups this year. And as the coronavirus-fueled acceleration of digital transformation continues, it seems the digital bank is here to stay, with some estimates pointing to neobanks reaching 60 million customers in North America and Europe by the end of 2020, and surpassing 145 million by 2024.

The space is also becoming more crowded, a trend which will only accelerate with fintech eating the world and creating greater infrastructure that enables any company to include a bank account as a product extension.

As a result, neobanks are not a monolithic model and not all are created equal. Looking underneath the hood of business models across the globe reveals remarkable operational differences and highlights specific features that are more likely to succeed in the long-term.

Five global models of neobanks

Today there are five distinct models that are leading globally:

Interchange-led: Relies on payments revenue, sourced through interchange as the revenue driver. Every time a customer uses the neobank’s card as a payment method they get paid [e.g. Chime / US; Neon (hybrid of 1 & 2) / Brazil].

Credit-led: Leverages a credit-first model, starting off with a credit card or similar offering, and later providing a bank account [e.g. Nubank, Neon (hybrid of 1 & 2) / Brazil].

Latin America’s digital transformation is making up for lost time

“Gradually, then suddenly.” Hemingway’s words succinctly capture the recent history of tech in Latin America. After more than a decade of gradual progress made through fits and starts, tech in Latin America finally hit its stride and has been growing at an accelerating pace in recent years.

The region now boasts 17 unicorns up from zero just three years ago. For the first time, the most valuable company in the region isn’t a state-controlled oil or mining behemoth, but rather e-commerce platform MercadoLibre.

We are only in the first chapter of this long story, however. When we compare the penetration of tech companies in Latin America to both developed and developing markets, we estimate that the market could grow nearly tenfold over the next decade. The value to be unlocked will be measured in trillions of dollars and the lives improved in the hundreds of millions.

Our venture capital fund, Atlantico, conducts a thorough annual analysis of market data from Latin America in what we call the Latin America Digital Transformation Report. The report consists of hundreds of data-rich slides based off of original studies, surveys and models constructed from a combination of public and proprietary data shared by many of the region’s leading tech companies. This year, for the first time, we have decided to make the report public and here we highlight some of the findings from this year.

Global venture capitalists, the likes of Sequoia, Benchmark and a16z have planted their flags through key investments in companies like Nubank, Wildlife and Loft. Those are not isolated incidents – venture capital investments in the region have nearly doubled annually for the last three years according to the Latin American Venture Capital Association (LAVCA). In order to understand what investors are seeing in the region, we analyzed the market through a simple framework we apply throughout our report.

The starting point for this framework is the socioeconomic foundation in place. The context in which transformation occurs is important in shaping its possible outcome. The same ingredients applied in different contexts and time periods will produce very different results. Thus, we believe that Latin America is unique globally, and the types of companies that will flourish (and to what extent) will be different than in other parts of the world. Trying to shoehorn foreign business models and products is unlikely to yield good results.

In the case of Latin America, it’s key to remember the region boasts a population twice that of the United States and a GDP half that of China’s (but similar on a per capita basis). In short: Latin America is big, a central factor that has the power to attract capital and talent. However, also critical to note is that economic inequality is severe. While a quarter of the region’s population lives in poverty, the wealthy in Mexico City and São Paulo enjoy living standards in line with their peers in New York and London.

This unique mix of large opportunity and critical problems waiting to be solved has provided fertile ground for the gig economy to flourish. Case-in-point: Brazil is Uber’s largest market globally in volume of rides, with São Paulo its largest city. Rappi, a major food delivery player in the region, valued at over $3 billion, grew its sales by 113% over the first five months of the pandemic. When taken together, the largest ride-hailing and food-delivery services in Brazil are already the largest private employer in Brazil, a formidable contribution to reducing high unemployment.

When we track technology company value as a percent of the economy (tech company market cap as a % of GDP) we clearly see that Latin America, at 2.2% penetration, has a ways to go. Our estimate is that it is 10 years behind China (at 27% penetration), which itself is five years behind current U.S. levels (39% penetration).

Image Credits: Atlantico

However, it is important to note that Latin America is making up for lost time. This metric for tech company penetration or share has been growing on average at 65% per year since 2003. In comparison, the growth in U.S. tech company penetration has grown at 11% annually in the same period, while China’s has expanded at 40%.

https://www.atlantico.vc/latin-america-digital-transformation-report

Image Credits: Atlantico

Drivers of digital transformation

Within the socioeconomic context of the region, we advance to looking at the three drivers of change in our framework: people, capital and regulation.

On the people front, the greater visibility of successful role models has catalyzed a desire to follow entrepreneurial footsteps. People like Mike Krieger (co-founder of Instagram), Marcos Galperin (founder/CEO of Mercado Libre) and Henrique Dubugras (founder/co-CEO of Brex) have shown that local talent can go on to build global companies.

In a survey we conducted with nearly 1,700 college students from the top universities in Brazil, 26% of students voiced a desire to work at startups or big tech companies. A whopping 39% expressed plans to start a company in the future, that number rising to 60% when we consider only computer science students. As more and more of the region’s top graduates flock to tech, it gives us confidence in the accelerating growth of the sector over many years to come.

On the capital front, the growth of venture funding in the region has been frequently written about. Last year, it hit a peak of $4.6 billion after doubling from the year before. However, what perhaps is more surprising is that despite this rapid growth, we are still far from the ceiling. When we view venture capital investments as a proportion of GDP, we see Latin America as only one-seventh of the U.S. level and a quarter of the level in India.

Brazil’s banks try to outflank challengers by investing in a $15 million round for Quanto

Trying to outflank competition from neo banks and other potential challengers, two of Brazil’s largest financial services institutions, Bradesco and Itaú Unibanco, have invested in Quanto, a company developing technology to let retailers and other businesses access financial information and services.

Joining Brazil’s two largest banks are Kaszek Ventures, one of Latin America’s largest venture capital firms, and Coatue, the multi-billion dollar hedge fund. 

Bradesco joined the round through its InovaBra Ventures investment fund while Itaú invested directly and had its participation approved by Brazil’s Central Bank, according to a statement.

“Open banking changes the way we understand and consume financial services, but it’s quite exciting to see the Brazilian market embracing this new moment in such a positive way,” said Richard Taveira, Quanto’s chief executive, in a statement. “Brazil has the potential to lead the use of open banking worldwide, and this round is a testament to that.”

Brazil’s Central Bank is deeply invested in the prospect of opening up banking regulation to allow information and data sharing between payment processors and technology providers, retailers, and other service providers in the financial services value chain.

Quanto, which provides standardized bank data application programming interfaces that allow institutions to slash the time it takes to ccess bank account data.

“Open banking is an important evolution in the financial services market and we believe that Quanto can contribute in an impactful way in creating a more competitive market, focused on the customer experience,” said Rafael Padilha, Director at Bradesco Private Equity and Inovabra Ventures, in a statement.

The Quanto technology could enable financial product distribution through the same API platform as business to business services, the company said. Quanto claims that its services will make it easier for customers to access low-interest credit lines with a single sign-on model and to receive competitive interest rates by sharing banking data with multiple lenders in a single flow.

“Quanto provides the rail for banks and fintechs to compete, and consumers are the ones who win”, said Taveira.

How Moovit went from opportunity to a $900M exit in 8 years

In May 2020, Intel announced its purchase of Moovit, a mobility as a service (MaaS) solutions company known for an app that stitched together GPS, traffic, weather, crime and other factors to help mass transit riders reduce their travel times, along with time and worry.

According to a release, Intel believes combining Moovit’s data repository with the autonomous vehicle solution stack for its Mobileye subsidiary will strengthen advanced driver-assistance systems (ADAS) and help create a combined $230 billion total addressable market for data, MaaS and ADAS .

Before he was a member of Niantic’s executive team, private investor Omar Téllez was president of Moovit for the six years leading up to its acquisition. In this guest post for Extra Crunch, he offers a look inside Moovit’s early growth strategy, its efforts to achieve product-market fit and explains how rapid growth in Latin America sparked the company’s rapid ascent.


In late 2011, Uri Levine, a good friend from Silicon Valley and founder of Waze, asked me to visit Israel to meet Nir Erez and Roy Bick, two entrepreneurs who had launched an application they had called “the Waze of public transportation.”

By then, Waze was already in conversations to be sold (Google would finally buy it for $1.1 billion) and Uri was thinking about his next step. He was on the board of directors of Moovit (then called Tranzmate) and thought they could use a lot of help to grow and expand internationally, following Waze’s path.

At the time, I was part of Synchronoss Technologies’ management team. After Goldman Sachs and Deutsche Bank took us public in 2006, AT&T and Apple presented us with an idea that would change the world. It was so innovative and secret that we had to sign NDAs and personal noncompete agreements to work with them. Apple was preparing to launch the first iPhone and needed a system where users could activate devices from the comfort of their homes. As such, Synchronoss’ stock became very attractive to the capital markets and ours became the best public offering of 2006.

After six years with Synchronoss while also making some forays into the field of entrepreneurship, I was ready for another challenge. With that spirit in mind, I got on the plane for Israel.

I will always remember the landing at Ben Gurion airport. After 12 hours traveling from JFK, I was called to the front of the immigration line:

“Hey! The guy in the Moovit T-shirt, please come forward!”

For a second, I thought I was in trouble, but then the immigration officer said, Welcome to Israel! We are proud of our startups and we want the world to know that we are a high-tech powerhouse,” before he returned my passport and said goodbye.

I was completely amazed by his attitude and wondered if I really knew what I was getting into.

The opportunity in front of Moovit

At first glance, the numbers seemed very attractive. In 2012, there were roughly seven billion people in the world and only a billion vehicles. Thus, many more people used mass public transport than private and users had to face not only the uncertainty of when a transport would arrive, but also what might happen to them while waiting (e.g., personal safety issues, weather, etc.). Adding more uncertainty: Many people did not know the fastest way to get from point A to point B. As designed, mass public transport was a real nightmare for users.

Uri advised us to “fall in love with the problem and not with the solution,” which is what we tried to do at Moovit. Although Waze had spawned a new transportation paradigm and helped reduce traffic in big cities, mass transit was a much bigger monster that consumed an average of two hours of each day for some people, which adds up to 37 days of each year*!

What would you do if someone told you that in addition to your vacation days, an app could help you find 18 extra days off work next year by cutting your transportation time in half?

* Assumes 261 working days a year, 14 productive hours per day.

Facebook fights order to globally block accounts linked to Brazilian election meddling

Facebook has branded a legal order to globally block a number of Brazilian accounts linked to the spread of political disinformation targeting the country’s 2018 election as “extreme”, claiming it poses a threat to freedom of expression outside the country.

The tech giant is simultaneously complying with the block order — beginning Saturday after it was fined by a Supreme Court judge for non-compliance — citing the risk of criminal liability for a local employee were it not to do so.

However it is appealing to the Supreme Court to try to overturn the order.

A spokesperson for the tech giant sent us this statement on the matter:

Facebook complied with the order of blocking these accounts in Brazil by restricting the ability for the target Pages and Profiles to be seen from IP locations in Brazil. People from IP locations in Brazil were not capable of seeing these Pages and Profiles even if the targets had changed their IP location. This new legal order is extreme, posing a threat to freedom of expression outside of Brazil’s jurisdiction and conflicting with laws and jurisdictions worldwide. Given the threat of criminal liability to a local employee, at this point we see no other alternative than complying with the decision by blocking the accounts globally, while we appeal to the Supreme Court.

On Friday a judge ordered Facebook to pay a 1.92 million reais (~$367k) fine for non compliance, per Reuters, which says the company had been facing further daily fines of 100,000 reais (~$19k) had it not applied a global block.

Before the fine was announced Facebook had said it would appeal the global block order, adding that while it respects the laws of countries where it operates “Brazilian law recognizes the limits of its jurisdiction”.

Reuters reports that the accounts in question were controlled by supporters of the Brazilian president, Jair Bolsonaro, and had been implicated in the spread of political disinformation during the country’s 2018 election with the aim of boosting support for the right wing populist.

Last month the news agency reported Facebook had suspended a network of social media accounts used to spread divisive political messages online which the company had linked to employees of Bolsonaro and two of his sons.

In a blog post at the time, Facebook’s head of security policy, Nathaniel Gleicher, wrote: “Although the people behind this activity attempted to conceal their identities and coordination, our investigation found links to individuals associated with the Social Liberal Party and some of the employees of the offices of Anderson Moraes, Alana Passos, Eduardo Bolsonaro, Flavio Bolsonaro and Jair Bolsonaro.”

In all Facebook said it removed 33 Facebook accounts, 14 Pages, 1 Group and 37 Instagram accounts that it identified as involved in the “coordinated inauthentic behavior”.

It also disclosed that around 883,000 accounts followed one or more of the offending Pages; while the Group had around 350 accounts signed up; and 918,000 people followed one or more of the Instagram accounts.

The political disops effort had spent around $1,500 on Facebook ads, paid for in Brazilian reais, per its account of the investigation.

Facebook said it had identified a network of “clusters” of “connected activity”, with those involved using duplicate and fake accounts to “evade enforcement, create fictitious personas posing as reporters, post content, and manage Pages masquerading as news outlets”.

An example of removed content that was being spread by the disops network identified by Facebook (Image credit: Facebook)

The network posted about “local news and events including domestic politics and elections, political memes, criticism of the political opposition, media organizations and journalists”; and, more recently, about the coronavirus pandemic, it added.

In May a judge in Brazil had ordered Facebook to a block a number of accounts belonging to Bolsonaro supporters who had been implicated in the election meddling. But Facebook only applied the block in Brazil — hence the court order for a global block.

While the tech giant was willing to remove access to the inauthentic content locally, after it had identified a laundry list of policy contraventions, it’s taking a ‘speech’ stance over purging the fake content and associated accounts internationally — arguing such an order risks overreach that could damage freedom of expression online.

The unstated implication is authoritarian states or less progressive regimes could seek to use similar orders to force platforms to apply national laws which prohibit content that’s legal and freely available elsewhere to force it to be taken down in another jurisdiction.

That said, it’s not entirely clear in this specific case why Facebook would not simply bring down its own banhammer on accounts that it has found to have so flagrantly violated its own policies on coordinated authentic behavior. But the company has at times treated political ‘speech’ as somehow exempt from its usual content standards — leading to operating policies that tie themselves in contradictory nots.

Its blog post further notes that some of the content posted by the Brazilian election interference operation had previously been taken down for violating its Community Standards, including hate speech.

The case doesn’t just affect Facebook. In May, Twitter was also ordered to block a number of accounts linked to the probe into political disops. It’s not clear what action Twitter is taking.

We’ve reached out to the company for comment.