2019 will be remembered in the history of the TecnoLatino as “The year of change.”
2019 was the year SoftBank came charging into Latin America with a venture-focused fund ten times larger than the next largest LatAm-focused VC fund. 2019 was the year Unicorns and Dragons began to appear gallop across the Andes in record numbers. 2019 was the year Colombia established itself as regional center of innovation. And 2019 was the year MercadoLibre’ valuation reached $30+billion (equaling Ebay’s market cap briefly).
A year ago, the thought of a Japanese fund committing to invest $1.2 billion in a Colombian delivery company led by founders in their early 30s would have seemed about as likely as WeWork postponing its IPO, jettisoning its founder and laying off 25% of its workforce. In tech, fortunes can rise and fall quickly.
In short, 2019 was an amazing year for the TecnoLatino. We should not forget that took 20 years for the TecnoLatino to arrive to this stage.
What changed to allow the tech ecosystem in Latin American to have a record year? And why now? The answer is simple: Latin American entrepreneurs (finally) started building companies that were relevant to the mass of consumers in Latin America.
For far too long, many of region’s tech companies were trying to be tropicalized “clones” of successful US companies. Most of these “clones” were destined to fail because they targeted a tiny market. Too many Latin entrepreneurs were trying to build businesses targeting the top 1% (or 0.1%) of wealthy Latin Americans, rather than focusing on the huge number of middle class consumers in Latin America.
Finally, in the past few years companies like Rappi (Colombia), iFood (Brazil), OmniBnk (Colombia/Chile), Nubank (Brazil), and Cornershop (Chile) have begun to focus on this huge mass of consumers who have only gotten online recently.
Even now, few Latin American tech entrepreneurs realize that there are more internet users in Latin America than in the United States. Today Latin America is the world’s fourth-largest regional online market, behind Asia, Europe, and Africa. It was only in 2013 that Latin America’s online population overtook that of the United States. And by 2018, Latin American and the Caribbean had over 100 million more internet users than the United States.
A new generation of entrepreneurs in Latin American understands that the opportunity lies not only in appreciating the size of our market but also in understanding how consumers in Latin America spend their time online.
In Latin America, people spend a huge share of their time online on mobile devices. In 2015, Latins had the highest daily mobile internet usage in the world-spending on average of 3.59 hours on their smartphones every day. This is double the 1.84 hours that internet users in North America spend surfing on their smartphones on average a day. Only if we understand our consumers can we built companies that solve their problems and satisfy their needs.
As I pointed out in La Escuela del Sur #2: “Think Global, Act Local” in the 1930s the Uruguayan artist and philosopher Joaquin Torres-Garcia took a world map, turned it on its head and placed Latin America in the center of the world. In so doing, he created the “Escuela del Sur”(School of the South) and artistic and revolutionary movement with the tagline “Nuestro norte es el Sur”(Our destination is the South).
Almost a century ago, Joaquin Torres-Garcia understood that Latin Americans do not respect what they see when they look in the mirror. Rather than embrace our culture and people, we often looked “North” for our inspiration and ideas.
Finally, it appears that in 2019 entrepreneurs around the region have begun to look in the mirror and find inspiration in our region, our South.
The TecnoLatino will only be able to build on the momentum created by the great year of 2019 if it continues to build companies that can address the issues that 90%+ of the people in Latin America face. “Ahora a trabajar” Now back to work…
