In 2016, global risk funds invested US $ 500 million in the continent. The figure amounted to US $ 1,140 million in 2017 and the amount soared to US $ 1,980 million in 2018.
As if this were not enough, last month the Japanese conglomerate SoftBank Group Corp announced that it will disburse US $ 5 billion in innovation and technology projects in the region in the coming years. In light of these figures it is clear that something is cooking in Latin America.
How everything is going in the countries
According to experts who follow the movements of the risk funds, “the moment of Latin America has arrived”. The rounds in which capital rises exceed US $ 100 million are becoming more frequent. And there are more and more unicorns, that is, companies valued at more than US $ 1,000 million, including a Colombian company, Rappi.
Brazil accounted for 55.9%% of investments in 2018, with a total of US $ 1,300 million distributed among 259 startups.
Colombia, in that same period, was the second country in the continent with the highest investment, US $ 334 million in 19 startups, followed by Mexico, which received US $ 175 million in 95 initiatives. It should be noted that much of the investment in our country was taken by Rappi.
If you compare the number of businesses closed by venture funds in startups between 2017 (249) and 2018 (463) it is clear that the trend is on the rise and will grow even more this year. This means that there is a great opportunity for Latin American entrepreneurs, and we are very well positioned to grow even more.
The Lavca report points out that the Fintech sector, which has been the favorite of investors, in 2018 ceded its privileged position to logistics and distribution startups. In a third place is transport, followed by SaaS (Software as a Service) and Proptech (real estate).
Why is Latin America suddenly so appetizing?
It is not something that has arisen from one year to the next. Brazil, Colombia, Mexico and Chile have been betting for several years on the construction of a competitive market, implementing increasingly advanced technology and developing more human talent.
Mexico, for example, is the fastest growing market for Amazon in the world; Sao Paulo is the city with the most Uber activity on the planet; Brazil and Mexico are the most important markets for Facebook, Instagram and WhatsApp. Rappi is the most desired jewel for Softbank, which sees a huge potential.
The continent is a market of almost 650 million people, with a 55% internet connectivity; the access and implementation of new technologies is becoming easier and less expensive, which makes us a clear diamond in the rough that not even convulsive political life can derail.
President Ivan Duque is clear about this trend, and that is why he has put forward initiatives in favor of Colombian entrepreneurs. His trip to Silicon Valley was more important than is believed, although here they wanted to lower the cane.
Perhaps the only error of the Government in this matter is that it is not being sufficiently aggressive in socializing all the opportunities that it is opening to the entrepreneurs. That is something that you should correct. And soon.
Also published on Medium.