How a trade fair is challenging cliches about favelas

On a scorching hot December morning, Mateus de Lima woke up in Marcone, a favela in the north of São Paulo. He felt like something good was going to happen: The results of a prestigious global competition for entrepreneurs were finally to be announced. The prize was participation in a support programme at an elite US university. But Mateus de Lima was rejected - and was devastated.

“I was told that my pitch was far too focussed on the favela community. That was one of the worst days of my life,” recalls Lima. He is CEO of the company Todas Por Uma (All For One), which has developed an app that allows people to report cases of domestic violence to a trusted network. The company also offers AI-enabled chips that can be installed in devices and trigger an alarm as soon as an attacker takes away your mobile phone.

A month after the announcement, Lima saw an advert on television calling for applications to take part in the first Expo Favela. The aim of the fair is to build a bridge between the formal city and the favelas. On the one hand, life in these neighbourhoods is characterised by poor housing conditions, inadequate basic services and high crime rates; on the other hand, many favelas are also a breeding ground for creativity and entrepreneurial spirit.

There is a growing number of young company founders who have grown up there and are setting up businesses. Sometimes these are very specifically geared towards the specific needs of these neighbourhoods, as with Mateus de Lima, and sometimes they focus on general demand and larger markets. The organisers of Expo Favela want to connect managers from traditional companies with founders from the informal settlements, promote cooperation and meanwhile boost their chances and opportunities. The first of these fairs took place in São Paulo in 2022 and attracted tens of thousands of participants - a clear indication of the potential that lies dormant in the neighbourhoods.

Lima applied and made it to the final ten in a competition organised by the Expo for companies from favelas across Brazil. On the podium, he proudly explained that his start-up was aimed at his community, the favela - and he had achieved this goal.

“I was told that my pitch was far too focussed on the favela community”

“That moment was a turning point. I recognised myself in each of these entrepreneurs,” reports Lima. He is now working with large cosmetics companies to incorporate his warning chips into make-up products. 

Mateus de Lima is one of many whose life has been changed by the Expo. The driving force behind this is the NGO Central Única das Favelas (CUFA), which is committed to social inclusion. Its founder Celso Athayde knows what he is talking about: He's from a favela himself. 

The entrepreneur, who was honoured by the Schwab Foundation for Social Entrepreneurship at the World Economic Forum in Davos in 2022, was born in the ‘Sapo’ (Brazilian for ‘toad’), a favela in Rio de Janeiro. For years, Athayde lived on the streets, dealing in all sorts of merchandise to keep his head above water. He worked for organised crime gang leaders and was afraid that he would be a dead man by the age of 18 if not before.

His life took a turn when he met Zeca. The merchant from his neighbourhood convinced him that life had more to offer than a life on the streets. Athayde entered the hip-hop scene and ended up working as a producer for famous rappers such as Racionais MCs and MV Bill. Together with MV Bill, he founded CUFA in 1999 to try and improve living conditions in the favelas. During the coronavirus pandemic alone, the organisation raised 400 million reais (more than sixty million euros) by fundraising with stars from film and music. They supported over 13 million people in need in Brazilian favelas, especially mothers.

“Investors haven't fully recognised favelas' potential”

With Expo Favela, he aims to initiate a radical rethink - saying no to deprivation and yes to the power that lies within these communities. “Investors haven't yet fully recognised the potential that lies dormant in favelas,” says Athayde. “We need to stop seeing favelas as spaces of social deprivation and realise their entrepreneurial and innovative spirit. Reversing this narrative is an essential prerequisite for change.”

His Expo is growing rapidly, with regional fairs now taking place in 24 Brazilian states and beyond. In October, an event was held in Paris, bringing together entrepreneurs from informal settlements and investors, just like in Brazil. 

Athayde is currently on tour in the 49 countries in which CUFA is active. The aim is for the events to take place worldwide and at some point culminate in a grand finale and competition in New York. 

“Our vision for the future is that Expo Favela will develop into a global forum that connects and strengthens favela companies from all over the world,” adds Athayde. “There are many marginalised communities that can learn from each other.”

The Expo offers a forum for collaboration as well as mentoring opportunities for promising entrepreneurs. It also offers increased visibility: for example, through a collaboration with Brazilian media giant Globo, which has staged a competition between favela entrepreneurs in the format of a reality show. 

“We make sure that the companies get the resources and advice they need to grow their business,” says Athayde.

For Michela Galvão, this advice was essential. She lives in Belo Horizonte and, along with her sister Rita, is setting up the “Impacto Coletivo” platform, which uses new technologies to advise and train female entrepreneurs in favelas and elsewhere. Due to be launched in 2025, the platform will include both e-learning programmes and a marketplace where female entrepreneurs can showcase their skills.

Expo Favela came at just the right time for the founder. “After the trade fair in Belo Horizonte, I realised that I needed to professionalise my concept and deal with bureaucratic matters to get access to resources,” reports Galvão. The crowning glory of her participation in the event was winning first prize in the regional competition.

“Many marginalised communities can learn from each other”

Despite all its successes, the Expo faces challenges. One concern is that larger companies could snatch up the innovations from the favelas. “There are always risks, but we can't let them paralyse us,” explains Athayde.

To minimise the risk, the organisers of the business fair have taken precautions to ensure that the community retains control over its entrepreneurial ecosystem. Initiatives such as the Favela Funds aim to channel investment directly to the favela companies so that they are less dependent on external players who could dictate their terms.

Another challenge is to attract more investors. “We are seeing more curiosity and interest than investment,” states Katrine Scomparin, co-founder of logistics start-up NaPorta. The company specialises in hard-to-reach areas, including favelas in São Paulo and Rio de Janeiro. Due to difficult road conditions and crime in more remote neighbourhoods or areas, many larger logistics companies are reluctant to deliver goods there. 

NaPorta assigns digital coordinates to customers so that they can be found even if they do not have an address with a street name and house number. On top of this, couriers are used who come from the delivery areas in question, making it easier for residents of the favelas to access online retail and boosting the local economy at the same time. NaPorta also has the ambition to expand globally. 

“We are doing pioneering work, but the products and services of the entrepreneurs develop is not in our hands alone”

The company has already taken part in four Expo Favela trade fairs in São Paulo and Rio de Janeiro. However, Katrine Scomparin says that her company will probably only participate again in the future when the trade fair focuses more specifically on business. “For a start-up, every minute spent at a trade fair has to bring tangible benefits, and we haven't seen that at Expo Favela yet,” says Scomparin.

Celso Athayde from CUFA sees Expo as a platform that is constantly evolving and learning with every event. At the same time, he accepts that there are hurdles to overcome, especially when it comes to attracting investment. This, he emphasises, is an ongoing process.

“We understand that people are frustrated because they can't get funding, but it's important to learn from the success stories. We do pioneering work, but how the products and services of the entrepreneurs develop is not solely in our hands.”

The fact that Expo Favela exists at all is already a significant success, says Athayde. And it is only natural that it has to evolve. Investors - whether individuals or investment funds - should be more attuned to what is produced in slums, “even if favela start-ups at this stage do not produce such sophisticated, glossy products as some might expect”.

Athayde is aware that the project requires staying power. However, he believes it is worth moving forward on the path he has chosen. “If the formal city recognises the role it can play in bringing these companies to life, we may eventually achieve true equality of opportunity.”