Picasso once said, “Good Artists take, while great artists steal.” When developing startup ideas, keep this concept in mind. It makes no sense to reinvent the entire wheel. For specific demographics, particular purposes, however, there is a reason for improving on the wheel, and it means the idea should be as unique as vibrant.
When are you about to start a business? Which is the first question that pops up in your mind? Region or location, right? Too often, entrepreneurs believe that success can only be achieved by moving their companies to major startup hubs like Silicon Valley or the United Kingdom. However, smaller cities can also be very beneficial for startups because there is a lot of room for improvisation and opportunities.
And one developing country that has infinite opportunities for startups in Latin America. Yes. It is one region where the startup ecosystem is experiencing a boiling point. Recent expansion has mainly occurred in Mexico, Colombia, Argentina, Chile, and Brazil, especially in the fields of fin-tech, logistics, and e-commerce.
To find the new market for your startup, Latin America has much more to offer you. The VC sector has exploded in Latin America in the past five years. Twenty-three unicorns have been spotted in the area, including digital bank Nubank and online food delivery platform Rappi.
Latin America Has Become a “Sweet Spot” for Startups
As a region, Latin America is experiencing rapid growth. Too often, emerging locations, such as South America, are ignored by the United States, which is an entrepreneurial hub. Making lasting change in this continent does not require groundbreaking innovations, and several countries in Latin America are catching up with the U.S.
An entrepreneur with a keen eye could introduce existing innovations to the region. In this case, entrepreneurs would avoid competing in a crowded market and use proven business models to increase their chances of success.
But now, the scenario is something different. In the process of putting this list altogether, Argentina (Buenos Aires) and Brazil (São Paulo) have the strongest entrepreneurial cultures in South America today, but other countries, including Colombia, are closing the gap.
Whether anyone wants to buy a used car, rent an apartment, transfer money online, or order essential products such as food or grocery, living in Latin America was a nightmare because of an overabundance of paperwork, a slow bureaucracy, and legal troubles.
As a result of startups developed to solve problems such as these, the region has come to the ideal of the emerging market tech boom. According to the Global Private Capital Association, venture capital investments in Latin America totaled $4.1bn last year, surpassing Southeast Asia’s $3.3bn and exceeding Africa, the Middle East, and central and eastern Europe combined.
Here we have defined top startups in Latin America with their funding details; it will help you gulp why Latin America has become a sweet spot for entrepreneurs.
Key Takeaways
- Increased internet access, specifically through mobile devices, is setting the stage for e-commerce expansion in Latin America. More than 75% of Latin American consumers make a decision to purchase products and services online, and the e-commerce market is expected to reach $74.8 billion by the end of 2020.
- Among the most well-funded startups in Latin America, Rappi is the most successful one in Colombia, with over $1.7 billion in equity funding.
- With the implementation of COVID-19, consumers feel more secure about purchasing and paying for goods online. Small and medium-sized companies have an opportunity to provide better services than their competitors who are still using pen-and-paper methods or are stuck using outdated software.
- The region is home to seven countries whose most well-funded startups have raised at least $100M in funding, including the unicorns mentioned above, along with Clip, Adexus, and Uala of Mexico, Chile, and Argentina. The only companies to raise over $1B are Rappi and Nubank.
In short, there are countless opportunities entrepreneurs can seize in order to grow and thrive. Although the COVID-19 recession has impacted this flow of investment to the region, companies from Brazil to Mexico – have emerged from it strengthened and more resilient than ever.
Here are 5 Best Startup Ideas for Latin America
The Latin American economy is one of the largest in the world, with 600M people and $6T of GDP. Latin America is the ideal setting for the internet economy to disrupt real economic activity. In Latin America, the population is relatively young and familiar with the internet and mobile devices.
Now without any ado, let’s explore some profitable business ideas that will thrive in the year 2022 and beyond.
Online Delivery Business
There are no downward signs when it comes to the online delivery business. The doorstep delivery business is skyrocketing globally, and Latin America is not left behind in the race. After witnessing the overnight success of Rappi, more and more entrepreneurs are keen to create a delivery app for Latin America where people can order products online and get them delivered with a stipulated time frame.
Online Businesses
With increased internet access, specifically through mobile devices, e-commerce is expected to continue growing in Latin America. The research shows that small businesses with an online footprint perform better than those without one. From daily essentials to other products, people buy products over the internet. Hence, online startups have high chances to succeed in the post-pandemic world.
Financial Services
As more startups come online in the region, financial technology is a common denominator.
According to market analysts, by 2022, 180 million people will have registered for online financial services, and 91,8 million will have actively transacted online. Here you can consider how Brazil-based, GuiaBolso helps users by giving personalized saving tips and credit scores.
Launch Ride-sharing Business
The ride-sharing market is booming globally as more and more customers prefer private transportation modes over public due to the pandemic. Latin America offers immense opportunities if you are running a traditional transportation business and want to digitize it. Along with Uber, Mexico-based Pronto connects customers with drivers and offers ride-sharing services in smaller cities.
Healthcare Business
For medical equipment/device manufacturers, Latin America seems like an ideal target market. Market Data Forecast expects the Latin American home healthcare market to reach US$51.9 billion in 2025 with a growth rate of 9.87%. From medicine ordering to patient consultation, the online healthcare market is growing.
GHI’s Medical Equipment Market Report Latin America 2020 reports home healthcare penetration in several markets, including Argentina, Brazil, Mexico, Chile, Colombia, and more.
Latin America is Open For Business
Many experts consider Latin America to be the next startup frontier. When startup fervor grips a group of intelligent, ambitious, hungry individuals, success starts to compound. Latin America is experiencing something similar now. Fortunately, the market is there, and the ecosystem is ready with infinite potential and opportunities.
Author bio
Nirav Parmar
Nirav is an online marketer and blogger having hands-on experience in crafting creative content. The skills he poses in creative writing is fantastic as his ability to write engaging content attracts the readers. His enthusiastic approach to researching the facts related to the topics is phenomenal. He knows all the latest trends of delivery business, strategies to digitalise SMEs, changing market dynamics etc.