Over the past years, Latin America has emerged as a significant market for big tech, becoming a growing and vibrant homegrown startup ecosystem. The region gave rise to 19 unicorns - notably Gympass, Loft, Loggi, Nubank, Quinto Andar, and Rappi - in addition to several exits and even a billion-dollar, single-round financing.
But what do we know about the booming LATAM startup ecosystem?
As venture investment has scaled, Latin America has produced a growing cohort of startups backed by the region’s tech investors and global investors alike. The latest edition of the Latin American Startup Directory includes 126 startups that raised over US$1M in verified venture funding in 2019.
Besides the local Private Equity, Venture Capital funds, and Family Offices, global corporate investors participate in some of the largest investments in Latin American startups, demonstrating appetite for deals across a range of stages and sectors. Between 2013-2017, global investors poured their funds in Fintech (24%), Marketplaces (19%), and SaaS and e-commerce (12%). Edtech represented 9% of all invested IT companies.
The overall venture capital investment in Latin America has more than doubled (in dollars) every year from 2016 to 2019, tracing a steady growth trajectory that risks to be interrupted by the Covid crisis. But how are local organisations supporting the ecosystem to grow?
The startup ecosystem is supported by various organisations - accelerators, incubators, coworking spaces. Program structure is one of the major differences between incubators and accelerators: accelerator programs have a set time frame, which ranges from a few weeks to a few months, while incubators have no set boundaries.
Latin America reports over 141 coworking spaces - Impact Hub, Aldeia Coworking, Sinergia Cowork - which often function as incubators, helping startups in their development and growth. With over 95 spaces, Brazil leads the coworking trend. In total, over $35 million was invested in 872 startups by 53 accelerators in the Latin American region, with the biggest sectors including Internet of Things, Mobile Apps, Big Data Analytics, Health and Education.
Dedicated to supporting the LATAM startup ecosystem, our Brazil Director Oliver Seitz presents the LATAM Pitch Day on October 16th. The event brings together entrepreneurs, investors and established industry leaders from all around Brazil, LATAM and Europe, to create unparalleled networking and mentoring experience. Learn more and RSVP here.
By Roshan Hesham, Marketing Executive The Startup Club