We live in a time when entrepreneurs have unparalleled possibilities. Across the world, technology innovations are subverting both the new and old industries. Interestingly, over the past decade, Latin American countries have made incredible progress in this area. Unicorns like OLX and Kavak, led by the tech-native generation, accelerated this progress.
Latin America is expanding. The middle class is advancing rapidly. They are more tech-savvy and motivated to bring about positive change in the region. Every element such as the uniqueness of the terrain, new changes, innovative thinking and amazing culture attract entrepreneurs, business leaders and investors to Latin America.
In 2017, Global Network Perspectives ranked Latin America as the second most enterprising region in the world. But, this assessment came before the explosive growth of tech startups in the region. Tech startups have tripled in value over the past four years. Over the past decade, their value increased 32-fold to $221 billion by 2020.
According to a study by the IDB lab, Unicorn companies, hitting the billion-dollar mark, are on the rise. Because today, there is a more vibrant market and a community of investors to contribute to the startup ecosystem’s boom. Latin American companies like Mercado Libre took years to break the ‘glass ceiling’.
Deepak Chhugani, founder and CEO of Nuvocargo, says the leap in the tech ecosystem was made possible due to the change in the mindset of millions of Latin Americans. Nuvocargo is a digital logistics platform for international trade.
“My story is no different. I believed that a banking job in the US was the only window into a better future. I was born in Kenya to Indian parents. I grew up in Ecuador before moving to the US to pursue a degree in economics and finance. Six years ago, 14 of my close friends and I were bankers. None of us worked in startups. But now 13 of us are working for or working in startups. Many among us have strong business connections with Latin America. The last two people in our friend circle are also actively trying to switch to startups,” Chhugani said.
According to IDB Lab’s 2020 report, Fintech and e-commerce accounted for 72% of the Latin American ecosystem. And, most of them were concentrated in two countries: Brazil and Argentina.
Today, Latin America is the fourth largest online marketplace in the world. Brazil and Mexico are two of the top 20 economies in the world in terms of GDP. Chhugani observes that high purchasing power and widespread use of the Internet are bringing Latin Americans closer to the digital space. IDB Lab experts also predict that enterprises are likely to attract $40 billion capital investment by 2030.
“Entrepreneurs who want to start a startup in Latin America need to find potential areas for innovation, that is, traditional markets where technology has not penetrated. Latin America is still lagging behind developed countries. So, entrepreneurs can spot great opportunities in all areas including property, technology, healthcare, logistics, supply chain and financial services,” said Deepak Chugani.
