Latin America today is a fertile ground for startups and tech companies disrupting important sectors like fintech, agriculture, insurance, and e-commerce, proposing solutions to local and global problems. Although the region has been known as complicated and protectionist in terms of establishing and doing business, investing time and money in setting up operations in LATAM can result in pleasant surprises. European entrepreneurs should be particularly aware of the benefits of setting shop in countries that have common languages with the Old Continent due to their past common history: French, Dutch and English are spoken in the region, though the vast majority of the Latin American population speaks Spanish and Portuguese.
Although the region is averse to risk and publicly condemns failure, the startup ecosystem in LATAM is evolving to a point where incubators, accelerators and early-stage deals are considerably more present than they were five years ago, thus paving the way for more investment in the region by foreign and domestic funds. The region will grow faster for the remainder of the decade than any other region except for Sub-Saharan Africa.
Startup accelerators are growing in numbers and in investment volume in Brazil, Chile, Colombia, Argentina, Mexico and Peru. Big corporations are investing in startups strategically, or acquiring them, especially when they provide some solution that the internal bureaucracy in the large companies would take years to reach or even to approve.
On the other hand, if you are an investor, you should identify companies and approach them before they go into the accelerator pipeline in order to maximise your return on investment and to maximise profitability. As a side note, Start-Up Chile founded in and Wayra founded in did a lot to put Latin America in the map and turn it into a startup epicenter. Brazil and Mexico account for approximately two-thirds of the initiatives and investments, but other countries are catching up.
Thanks as well to investments of large companies, startup businesses across the region are enjoying growth. Most of the startups that have received investment are in the e-commerce, IT, banking and telecom sectors. Startups challenging the traditional banking industry have been on the rise in recent years in LATAM, particularly because of the existing bureaucratic and very expensive banking services for people and companies.
