Tech Trends: Growth continues despite political and economic instabilities in LatAm
Trends

Tech Trends: Growth continues despite political and economic instabilities in LatAm

You could be forgiven for thinking that political instability and economic woes would mean that growth would be an impossible achievement for a region like Latin America, which, for the most part, has garnered headlines for all the wrong reasons during 2018. Yet unicorns are on the rise across the region, investment continues to soar, interest from countries like China remains strong, and innovation in use cases for cryptocurrency, fintech and even in immersive tech has drawn new interest to Latin America.

While political instability still plagues the region, investment in tech continues to grow. The emergence of new tech unicorns like Brazilian rideshare company 99 and digital bank Nubank, which is valued at over $4 billion following its investment injection from Chinese Internet giant Tencent, means Latin America has seen significant increases in tech investment over the last two years. According to a report from the Latin American Private Equity and Venture Capital Association (LAVCA), venture capital investments in the region grew to more than US$1 billion for the first time in 2017, representing a doubling of the amount for 2016. And investment exceeded half that in the first half of this year.

 

Mega-rounds on the rise

Interestingly, although economies like that of Argentina and Venezuela have been in crisis over the last year, start-up investment continues to grow. For example, the Argentine Association of Private, Venture, and Seed Capital (ARCAP), reported recently that the country's start-up ecosystem had raised more than five times as much capital (US125 million) in the first of half of 2018 as it did in the whole of 2017 (US$26 million).

Big deals seem to be more common now. Brazilian tech conglomerate Movile, for example, raised another $400 million from existing investors such as Innova Capital, to fund its iFood delivery service. This makes it one of the largest funding rounds ever for Latin America. Rounds of $100 million up are becoming more common - Rappi, Nubank and 99 all exceeded this to benefit from so-called mega rounds, while companies like Auth0 and Selina exceeded $50 million and $90 million respectively.

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Bianca Wright

Bianca Wright is a UK-based freelance business and technology writer, who has written for publications in the UK, the US, Australia and South Africa. She holds an MPhil in science and technology journalism and a DPhil in Media Studies.

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