Starting your own business in Latin America won’t come without its challenges. Whether you’re based in the United States or you’re a Latin American native, the truth is that competition and a growing Western influence is making it harder for brands to make it big – but that doesn’t mean that there aren’t success stories. In this article, we round up some of the biggest startup players.
Serving as Latin America’s answer to Expedia, Despegar isn’t exactly a new startup – it was founded back in 1999. However, the business shows that with the right marketing strategy and a unique selling point, business ideas that have already been successful in the Western world can take on a life of their own in a new territory, and do so before internet giants enter the market.
This online marketplace, which helps you to buy flights, hotels, cruises, holiday packages and rental cars, is one of the world’s largest travel agents. It became Argentina’s first IPO of 2017 when it raised more than $330 million and has a market cap of an eye-watering $1.85 billion.
In the late 90s, founders Mariano Fiori, Martín Rastellino, Alejandro Tamer and Cristian Vilate combined put in $15,000 to launch the website, whilst continuing in their existing jobs. As the brand quickly took off, a million dollars was raised through funding, and the rest is history. Today, the company employs more than 4,500 people around the world, and is the number one travel agency in America based on volume alone, covering 24 American and Spanish countries.
Biz Latin Hub
As globalisation continues and big brands including Apple and Uber enter the Latin American markets, small and medium-sized businesses are also expanding into the territory. One brand hoping to help is Biz Latin Hub, now a leading provider of commercial representation and back-office services for businesses wanting to break into Latin America.
Founded through a partnership between Australian Craig Dempsey and British David Wright back in 2014, the Hub has grown from a single office in Bogotá to a multinational company, offering their services in Latin American countries including Peru, Mexico, Colombia, Argentina, Chile, Costa Rica, Panama, Belize, El Salvador, Ecuador and Brazil.
Thanks to a dedicated network of employees, who are dotted around the Latin Americas, the company has grown considerably throughout its four years in operation, demonstrating that hard work, perseverance, commitment and talent can help a startup business take off. The company is now expanding into new territories, including in Sydney, Australia, and London, England to offer multilingual commercial representation and back-office services to more brands globally.
One of the biggest challenges many Latin Americans face is a lack of affordable or accessible banking. Whilst economies in countries such as Brazil have recovered and are now thriving, the truth is that banks are still cautious about lending and impose harsh fees on customers as a result. FinTech has helped to revolutionise the way people bank around the world, with Western brands including Kabbage, Coinbase, Oscar, Credit Karma and Stripe changing the way we deal with money on a day-to-day basis. In Latin America, a similar revolution has taken place, with Nubank offering an alternative to traditional high street lending and enabling more people to open their own bank accounts and manage their money from their smartphones and desktops.
Based in Brazil, the company launched in 2013 through founder David Vélez, with investors such as Sequoia Capital, Founders Fund, Kaszek Ventures, Tiger Global Management and Goldman Sachs helping Nubank raise over 600 million Brazilian Reals in its first two years of trading, and now has reached unicorn status after exceeding a $1 billion market valuation.
Data suggests that Nubank has grown an incredible 10% each month, as consumers use social media and word of mouth to spread the word about the service. Unlike some banks and online banking services, Nubank offers a “no fee” credit card in Brazil, which serves as an attractive alternative to mainstream banking institutions that charge high fees. As a result, more than 1.5 million customers have signed up for a digital account, with that figure raising on the daily.
Although adult literacy is also above 90% in almost every country in the region, English levels in Latin America are below the global average, with Portuguese and Spanish the most popular tongues. One company, based in Venezuela, is hoping to change all of that, offering English classes to Latin American and U.S. Hispanic markets. Founded in 2006, the company offers live classes all hours online and has worked with more than 500,000 students in over 40 countries.
The company received more than $120 million in venture capital funding between 2010 and 2013 before co-founder Nicolette Rankin left to start a rival firm, called Next University in 2013. Just two years later, Next University was acquired by Open English, growing its user base.
Based in Brazil, CargoX can only be described as the ‘Uber for trucks’. Founder Federico Vega quit is London-based finance career, and built a team to launch CargoX. He helped to take the company to more than $200 million in annual revenue, having secured more than $34 million US dollars in investment from venture capitalists such as Goldman Sachs and Uber co-founder Oscar Salazar. Unlike some businesses, Vega took the decision to focus exclusively on Brazil, but other territories are on the horizon as the company continues to expand in its home country.
There are hundreds of startup success stories across Latin America, with entrepreneurs working hard to create the next big thing. Use these case studies as inspiration when launching your own business, and who knows? You could be featured on a list like this in the coming years.