By Brazil Stock Guide – The Brazilian Development Bank approved R$300 million in financing for Magalu Cloud, in a move that gives institutional weight to one of Brazil’s most unusual technology bets: a domestic cloud-computing platform with infrastructure in the country, pricing in reais and ambitions to compete in a market dominated by global hyperscalers.
The loan, funded through the BNDES Mais Inovação program, will support research, development and expansion of Magalu Cloud, a business created by Magazine Luiza S.A. (MGLU3) in 2020. According to BNDES, it is the bank’s first financing operation aimed at expanding a national cloud data-storage company focused on the Brazilian market.
National cloud
The strategic point is sovereignty. Magalu Cloud offers cloud services hosted through infrastructure located in Brazil, with transactions priced in reais. That reduces exposure to foreign-exchange swings and gives local companies more predictability over technology costs, especially in a segment where dollar-based billing remains common.
The company currently uses five data centers to host its cloud services — three in the Greater São Paulo area and two in Fortaleza. The investment plan includes the purchase of processors and networking equipment, new hiring and the expansion of operations through services contracted from a sixth data center in Fortaleza.
Digital sovereignty
BNDES framed the transaction as part of a broader industrial and technological policy. The bank said cloud computing has become essential for companies of all sizes and sectors, while local infrastructure can help protect Brazilian data from foreign legal, operational or sanctions-related risks.
“The unprecedented BNDES financing for a project to expand a national cloud data-storage company strengthens and develops technologies in strategic segments for digital and technological sovereignty,” BNDES President Aloizio Mercadante said. He also linked the loan to the government’s digital strategy, Brazil’s national innovation policy and the training of new researchers and technicians.
The argument touches a sensitive point in the cloud industry. Since 2018, US legislation has allowed American authorities, under valid judicial orders, to seek access to electronic data held by service providers, regardless of where the servers are physically located. For Brazilian companies and public-sector clients, that has turned data jurisdiction into a commercial and strategic issue, not just a technical one.
Reais, not dollars
Magalu Cloud’s pitch is built around a local alternative: services compatible with international platforms, specialized support in Brazil and payment conditions adapted to the domestic market. By charging in reais and focusing on local clients, the company seeks to reduce one of the frictions faced by smaller and medium-sized Brazilian businesses that rely on foreign cloud providers.
The expansion also gives Magalu Cloud a larger research base. BNDES said the company expects to add 170 employees to its research and development team by 2028, bringing the total to 375 people by the end of the project. The work will be concentrated in São Carlos, in the interior of São Paulo, a city with a strong technology and academic ecosystem.
Cloud race
The timing is favorable. Brazil’s cloud market is expanding rapidly, driven by generative artificial intelligence, corporate digitalization and the modernization of legacy systems. BNDES cited estimates that the Brazilian cloud market may grow from about US$20 billion in 2024 to roughly US$80 billion in 2032, implying annual growth of 18.3% over the period.
For Magazine Luiza, the financing strengthens a business that sits far from the company’s better-known retail operations, but close to its long-term technology ambitions. For Brazil, it tests whether a national cloud provider can move beyond symbolism and become a credible infrastructure option in a market where scale, capital and trust usually favor the global giants.
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