Exciting Developments in Latin American Startups for 2022
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Chapter 1: A Thriving Ecosystem
The year 2022 is poised to be transformative for startups in Latin America. Over the last decade, the region has undergone significant growth, and we are witnessing what could be called the "year of the IPO" for Latin American companies.
Creating this year's list was a delightful task. While some names may be familiar, I hope to introduce you to several promising startups that have largely stayed under the radar until now. Let’s get started!
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Latin America's Startup Landscape
The buzz is real: Latin America has emerged as a vibrant startup ecosystem!
2021 was a stellar year for startups in the region, highlighted by neobank Nubank's public offering on the NYSE, boasting a valuation exceeding $40 billion. Currently, there are at least 25 unicorns in Latin America, six of which emerged in the last year alone. Major player SoftBank has supported around 15 of these companies.
In the first three quarters of 2021, LATAM unicorns like Kavak, Clip, Konfío, and Bitso collectively raised $14.8 billion, marking a remarkable 174% increase from the previous year (CBInsights). According to CB Insights' State of Venture Report, investments in LATAM reached $9.3 billion in the first half of 2021, reflecting an 830% increase over the past decade. While funding is not the sole indicator of success, it is crucial for an ecosystem in expansion.
However, LATAM still holds a relatively small share of the global VC landscape. In Q2 2021, the region attracted just 4% of total VC investments, which is over four times less than Europe, despite having a similar population.
Harry Stebbings provides an insightful perspective on the power of investing in LATAM:
"The incredible aspect of investing in LATAM is that you’re backing products that enhance the lives of 99% of the population by 90%. In contrast, in Western markets, you often invest in products that only improve life for 5% of people by 10%."
The startup ecosystem in Latin America is several years ahead of another emerging market, Africa, and I look forward to seeing that region experience similar growth.
The momentum continues! In October 2021, SoftBank announced plans to invest an additional $3 billion into regional startups, on top of the $5 billion already committed.
Many industry experts predict that 2022 will be a record-breaking year for IPOs in Latin America:
"We anticipate 2022 to be the largest IPO year in Latin America's history. Now is the time for us to deepen our commitment to the region."
— Marcelo Claure, Executive VP & COO of SoftBank Group Corp
These IPOs are significant as they provide liquidity to founding teams, enabling them to support the next wave of entrepreneurs, while also advancing LATAM's public markets to catch up with those in the U.S. For instance, technology firms make up less than 10% of Brazil's Bovespa index, whereas they account for nearly a third of the S&P 500 index in the United States.
I am eager to see how the LATAM startup ecosystem continues to evolve in 2022, so let’s explore the top 10 startups to watch this year!
Sources: LABS, Forbes, TechCrunch, Bret Waters, TecReview, LeadersLeague, RefreshMiami, PracticeEcommerce, IDG Connect, Bloomberg
Chapter 2: The Top 10 Startups to Watch
Treinta: Khatabook for LATAM
Treinta has made remarkable strides over the last year, akin to the successful digital ledger app Khatabook in India, which has raised over $180 million since its inception. Catering to small businesses, Treinta provides a simple digital ledger for tracking purchases, managing payments, and offering credit. With a team expansion from 15 to 100 members and new services like Treinta SHOP and Treinta Payments, big things are anticipated for Treinta in 2022!
Offices In: Bogotá, Colombia
Total Funding: $14.8 million
FastFarma: Capsule for Ecuador and Mexico
FastFarma aims to revolutionize the pharmacy experience in Latin America, drawing inspiration from the U.S. model, Capsule. Launched in Quito in February 2021, they provide rapid delivery of prescriptions directly to consumers' homes. By blending the "dark stores" model with pharmacy services, FastFarma is set for growth in more cities soon.
Offices In: Quito, Ecuador
Total Funding: $2.2 million
Palenca: Payroll and Identity APIs
As the gig economy flourishes, Palenca addresses the challenge of verifying workers’ identities and employment histories. By partnering with major gig platforms like Uber and Rappi, Palenca allows gig workers to share their earnings and performance data, empowering them to access loans and credit products.
Offices In: Mexico City, Mexico
Total Funding: $125,000
Moons: SmileDirectClub / Candid for Mexico
Moons is transforming orthodontic care in LATAM by offering affordable treatments. Their innovative approach has the potential to reduce the cost of orthodontic care from approximately $3,000 to around $500. With a pivot to online services during the pandemic, Moons is well-positioned for success in 2022.
Offices In: Mexico City, Mexico
Total Funding: $14.2 million
Pari: Drizly for Mexico and LATAM
Inspired by Drizly's success in the U.S., Pari is launching a rapid alcohol delivery service in LATAM, utilizing dark warehouses for swift deliveries. Since its founding in January 2021, Pari has seen substantial growth and aims to expand its operations across Mexico and beyond.
Offices In: Mexico City, Mexico
Total Funding: Not disclosed
Description: This video discusses the burgeoning startup scene in Brazil and Mexico, showcasing insights from industry experts about investment opportunities in Latin America.
Picker: Last-Mile Delivery in Ecuador
Picker specializes in last-mile delivery, partnering with major brands like McDonald’s and Dunkin’ Donuts. Their API connects businesses with local delivery providers, enhancing delivery efficiency and customer satisfaction.
Offices In: Guayas, Ecuador
Total Funding: $600,000
Hash: B2B Payment Infrastructure
Hash has emerged as a significant player in B2B payments, experiencing rapid growth. The company raised $15 million in a Series B round followed by a $40 million Series C, focusing on providing white-label payment solutions to non-financial institutions.
Offices In: São Paulo, Brazil
Total Funding: $58.7 million
Belvo: Plaid and More for LATAM
Belvo offers secure financial data access in LATAM, similar to Plaid in the U.S. With strong partnerships and a $43 million Series A funding round, Belvo is set to scale its operations and expand its customer base.
Offices In: Mexico City, Mexico
Total Funding: $56 million
Ripio: Cryptocurrency Payment Company
Ripio, akin to Coinbase, is in a rapid growth phase, having acquired Brazil's second-largest crypto exchange. With over 2 million users, Ripio is working on expanding its services to Colombia and Spain.
Offices In: San Francisco, CA
Total Funding: $94.4 million
- Fondeadora: Remittance and Mobile Wallet
Fondeadora aims to modernize banking in Mexico, offering fee-free debit cards and easy peer-to-peer payments. With backing from notable investors, they plan to reshape the neobank landscape in Mexico.
Offices In: Mexico City, Mexico
Total Funding: $32.2 million
Honorable Mentions
Mujer Financiera: Finance education for women
Offices In: Argentina
Total Funding: Not disclosed
Bitacora: Workplace planning
Offices In: Mexico
Total Funding: Not disclosed
Addi: Credit and banking solutions
Offices In: Bogotá, Colombia
Total Funding: $376 million
Bitso: Cryptocurrency exchange platform
Offices In: Mexico City, Mexico
Total Funding: $378 million
Tiendanube: SMB tools for online businesses
Offices In: Buenos Aires, Argentina
Total Funding: Not disclosed
Bendo: Platform for establishing online shops
Offices In: Monterrey, Mexico
Total Funding: Not disclosed
What Latin American Startups Did I Miss?
If you believe I overlooked any noteworthy startups in Latin America, share your thoughts on Twitter @amitch5903!