IntroductionInformal settlements, such as favelas (slums), are complex social ecosystems, characterised by their lack of basic services and by their particular social ties. Favelas in Rio de Janeiro are undergoing rapid changes, and new organisations and relationships are beginning to appear. This is largely as a result of the Rio de Janeiro government's policy of 'pacification' -a strategy to occupy the favelas formerly controlled by drug dealers, aimed at extending citizens' rights (and duties) in these areas (Fleury, 2012).This chapter discusses these transformations, considering in particular if and how new services are emerging. This discussion is based on one significant case study -Light Recicla. Light Recicla, in Favela Santa Marta, Rio de Janeiro, is a service operated by the city's energy company that seeks to reduce the electricity bills of local residents by exchanging recyclable materials for energy credits, helping them to adjust to the new reality brought by pacification.Under the framework of the pacification strategy, commercial companies and favela residents are establishing new relationships. Light Recicla aims to define a new mode of collaboration between the energy company, Light, and its customers that addresses this new set of social relations. Light's initiative is considered in this chapter as an example that highlights specific issues related to social innovation, particularly in terms of new social relations. The focus here is on social innovation 'as new ideas (products, services and models) that simultaneously meet social needs and create new social relationships or collaborations' (Murray et al., 2010, p. 3). In the context of the emergence of new market-based relations within the pacification process, the Light Recicla service is examined as a type of service that meets the demands of informal settlements via new, hybrid and collaborative services. It is also argued that the effectiveness of these new types of services is based on specific socio-cultural qualities.In analysing informal settlements, this chapter draws on the work of the DESIS 1 Thematic Cluster, 2 'Formal, Informal, Collaborative (IFC)', which sets out a typology of actions based on two main issues:• Underserved communities. Informal settlements are complex social ecosystems, characterised by their lack of basic services (which has led to them being described as 'underserved' communities) and by the (relative) density of specific forms of social ties -from traditional ones, such as those of family, clan and village, to new ones that have emerged in the particular context of informal settlements, including those imposed by criminal gangs.• Informal settlements in transformation. Driven by different factors, several informal settlements have recently entered a phase of rapid change (Echeverri and Orsini, 2011). In this changing environment, new organisations and forms of relationships, both inside the settlements and between them and the rest of the city, are appearing. In some places, such as Brazil, the starting poi...