Apr 14 2019Entrepreneurship
Where are the latin american unicorns and what are their "powers"?
As is already known, in the tech startups ecosystem, there are peculiar companies that, due to their extraordinary success within a short period of existence, are classified as "Unicorn". Among its singularities, highlights their equivalent value for more than 1,000 million dollars, in addition to being considered disruptive, due to innovative business models and capital raising.
In 2013, the term began to be used with the notoriety of the Cowboy Ventures fundraiser in Silicon Valley (San Francisco, California), which has seen at least 150 Unicorns born, among which are Juul Lab, Door Dash, Snowflake Computing and Plaid, and of course, Facebook, Asana, Uber, Airbnb, Dropbox and Pinterest, just to name a few.
Until October 2018, CB Insights calculated the worldwide existence of 270 companies of this type. However, in Latin American scene, 16 stand out, being Brazil, Colombia and Argentina, the main countries where these regional Unicorns began their flight.
For example, The Latin American Venture Capital and Private Capitol Association (LAVCA), highlighted these seven major regional giants valued at more than 1,000 million dollars, as part of a November 2018 ranking:
- Rappi. This prepared food delivery Unicorn emerged in Colombia. It operates in 27 cities along countries such as Argentina, Brazil, Chile, Mexico, Uruguay and Peru. Its importance and strength is such that it is considered "Colombia's Amazon".
- 99. Also called "Brazil's Uber", reached Unicorn category thanks to "Chinese Uber", DiDi Chuxing, who bought it last year. It connects almost 300 thousand drivers with more than 14 million passengers.
- Nubank. This fintech platform based in São Paulo, offers credit cards without a bank requirement, and is considered "the digital bank with more clients in the world outside Asia".
- PagSeguro. An online or mobile payment service for commercial operations that was born in Brazil (2006).
- Stone Pagamentos. Payment system, also, developed in Brazil. The creators were based on the fact that in Latin America for every 10 transactions, only 4 are made with credit or debit cards.
- Ascenty. Provides infrastructure for data centers. Born in Brazil, also has offices in Chile.
- ArcoEducação. Brazilian platform for education, serves more than 405 thousand students and 1,140 private schools throughout the country.
Among other "technolatins", we can mention Mercado Libre (Argentina), the largest e-Commerce platform in the region. This platform innovated by diversifying payment methods to secure online sales, valued at 1,389 million dollars and has presence in 18 countries. On the other hand, Lifemiles, a frequent travelers program of Avianca airline that emerged in Colombia. Its value is estimated at 1,150 million dollars.
Also stands out Linio, another online sales platform that was born in Mexico but was acquired by Falabella (Chile); It is present in Peru, Colombia, Argentina, Brazil, Uruguay and Mexico and offices in the United States and China. Despegar, Globant, DLX, B2W, Tovts, Kio Networks, Softeck and Crystal Lagoons, are other regional Unicorns that can be named and, although Duolingo, hasn't reached the necessary value, it deserves special mention because it is 300 million dollars away from achieving it. This digital platform was designed by a young Guatemalan to help learn more than 80 languages.
Even though companies in the region have raised almost 1.5 billion dollars of venture capital (VC)(2018), significantly exceeding 2017 maximums, they still are far from reaching their maximum potential, according to the Mexican Association of Private Equity. (AMEXCAP).
The above mentioned, because "Latin American startups capture less than 1% of risk capital, what makes the region to have a long way to go in digital entrepreneurship world," according to Lavca experts