There is a lot of hype about the accelerating startup ecosystem in Latin America. I have shared some thoughts about it here and here in the past. However, I highly recommend Nima´s post, particularly for aspiring entrepreneurs, where he details the good and the bad about starting a company in Latin America.
It is easy to get carried away with high financing rounds and news headlines, but the reality is that operating in the region still has significant challenges. From hiring and fundraising to quality of life and exits, the market is still in its very early stages of development. I completely agree with Nima that starting and operating a business in Latin America is not for the faint of heart, but there is incredible (personal & professional) upside and you can have a lot of fun doing it.
A good way to think about it is to operate through risk removal. This post is meant as a guide for removing risk while fundraising but it is even more applicable for operators. As you scale your business, you remove risks and go onto the next level. This path is usually accompanied by the size of the company as well as rounds that are raised.
In LatAm, Seed and Series A stages have been improving for quite some time but for a number of reasons, companies seem to hit a wall at that stage. Now we are starting to unlock the Series B and C levels more and more, where scale and profitability are the biggest questions/thresholds to overcome (think Rappi).
There will certainly be some high profile failures in the market, which will probably come early, but I have no doubt that massive companies are being built in LatAm as we speak (and more to come). These winners will take time to mature and then one day you will be surprised by their sheer scale. Example: MELI – 27Bn+ mkt cap.
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