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JD Duarte highlights the rising position of Latin America for startups and new business

Entrepreneur and business specialist JD Duarte highlights how Latin America is increasingly becoming a center for global startups and new businesses as global commerce changes.


San José, Costa Rica – WEBWIRE

Innovation is one of the motors that drive Latin America. In a context of uncertainty and changes, the region is managing to consolidate itself as an ideal territory for the development of projects linked to entrepreneurship and technological advances. FinTechs and unicorns are springing up to provide jobs, sustainability and business opportunities to many parts of the region. JD Duarte, an entrepreneur and business expert from Costa Rica, explains how Latin America is taking a leading role in new businesses.

The investment figures of the startup ecosystem in Latin America in 2021, as well as the forecasts for 2022 and the medium term, are outstanding. According to a recent report, Latin American startups received funding of $19.5 billion, a record figure.

There were 18 unicorns in the region last year. These are defined as startups that, before going public, reach a value of $1 billion. FinTechs captured 39% of that investment, about $6 billion. Almost half of the unicorns belong to this sector.

Startups in the eCommerce sector attracted 20% of the invested capital, about $3.9 billion, while the edtech sector, a combination of education and artificial intelligence, multiplied by six its 2020 collection figures. In total, around 1,500 edtech companies emerged in the region.

Investment figures for 2021 set a historic milestone. The 2022 forecasts are far from those figures, with a drop of more than $2 billion in the second quarter. However, despite the cut, experts paint an optimistic picture for the short and medium term.

Explains Duarte, “Two difficult years are coming globally, but the capital will be available to Latin America and its entrepreneurs. In five or 10 years, the growth in investment that we have been observing will continue, which has been 30% to 40% year-on-year.”

The opportunity is enormous. This is because there are big problems that are still pending and are the fertile ground where entrepreneurs and venture capital are planting.

Startups also generate added value for the entire region. Having neighbors that attract more investment or with a greater number of startups benefits those of us who are close. Good ideas are contagious, markets are expanding and investors’ eyes are on the region, and that makes Latin America more competitive.

There are six Latin American cities that act as drivers of this movement. The first is Sao Paulo, Brazil, which is home to 12 unicorns. It has a large domestic market and great access to capital.

Mexico City, Mexico, stands out for its FinTech ecosystem, although its jewel belongs to eCommerce. The top position belongs to Kavak, the largest unicorn in Latin America, with a valuation of $8.7 billion.

Buenos Aires, Argentina, attracted 67% of the country’s investment in startups in 2021. More importantly, investment in the first half of 2021, $210 million, was 400% higher than in the same period of 2020, when it was $41.5 million.

Santiago de Chile, Chile, had about $3 billion in 2021, earning it the nickname Chilecon Valley. Bogotá, Colombia investments soared 200% between 2019 and 2021. Rapid digitalization and the support of large entities were key to this growth. In addition, the support of large entities and cooperation between startups in Montevideo, Uruguay, create a climate of constant and solid growth.

With regard to the FinTech universe, the Dominican Republic is one of the main protagonists of its takeoff in recent years. Thus, the growth in the number of companies in the country is 129% between 2017 and the end of 2021, the highest in the entire region. At the end of last year, the country had 55 startups in this sector, more than 2% of the total in Latin America.

About Jose Daniel Duarte

JD Duarte is originally from Heredia, Costa Rica. He has been an entrepreneur and business owner for more than 20 years, and divides his time between his existing operations and researching new possibilities in which to invest. When he’s not dedicating time to his businesses, he spends time with his supporting wife and two children.


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