Nathan Lustig

The Brazilian Startup Ecosystem: São Paulo, Rio de Janeiro, Belo Horizonte, and Florianópolis

Category : Brazil
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Brazil’s economy experienced ups and downs over the past decade. Almost immediately after Forbes published an article raving about Brazil’s entrepreneurial potential in 2012, Brazil entered one of the most disastrous economic crises in the region. Just this year, stories of political corruption, monetary deflation, and falling commodity prices have plagued Latin America’s largest country.

Brazil is a country of contradictions. In the first three months of 2018, Brazil produced three new startup unicorns. The first was 99, acquired by Didi Chuxing for a rumored US$1B. Then in quick succession, PagSeguro reached US$2.7B in its January 2018 IPO (the 5th highest IPO ever), and Nubank became the third unicorn of 2018 with a US$150M Series E round in March 2018.

As the largest market in Latin America, with a population of over 210 million people, Brazil is still the most attractive country for investment and growth in the region for many investors. Despite the economic downturn, international investors often look to Brazil first when they want to enter the Latin American market. Many tech giants, such as Google, Uber, Airbnb, and Amazon, have built offices in São Paulo before moving into other Latin American markets. Many entrepreneurs look to invest in Brazil for their long-term growth strategies, as well.

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Doing Business in Chile: What You Need to Know

Category : Chile
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Note: It might seem funny, but I’ve never written a standalone post about doing business in Chile. If you’re interested in going deeper, please check out the Chile category on the blog, as there’s 8 years of content about what it’s like, delving deep on banking, real estate, startups, investing and more.

Chile is a long, thin country at the tip of Latin America that is widely considered one of the best countries in the region to do business. Across several indicators in the World Bank’s Doing Business Report, Chile beats out the regional competition. In 2018, Chile ranked 55th in the world on the World Bank’s Doing Business report, coming in just after Mexico, which ranked 49th. However, in recent years, Chile’s business-friendly reputation has slid from 34th to 55th which has been subject to some controversy.

Still, Chile is undoubtedly one of the most influential economies in the region, despite its small size. Chile’s population reaches just 17 million people, but the country is extremely centralized. The capital, Santiago, is home to 7 million people, or one-third of the total population. By comparison, São Paulo, the biggest city in Brazil, has over 21 million inhabitants – more than the entire country of Chile.

Chile’s overall GDP was US$247B in 2016, 28% of which is made up of exports. Chile is the world’s largest exporter of copper, and it also exports lithium, fish, and wine. While Chile’s overall GDP appears small beside giants like Brazil (US$1.8T) and Mexico (US$1.1T), its population is more than ten times smaller. When measured per capita, Chile’s GDP is the second-highest in the region after Uruguay.

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Latin America’s Growing Mobile Market

Category : Latin America Startups and Investing
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Latin America is the world’s second fastest-growing market for mobile subscribers, after Sub-Saharan Africa. In a region of approximately 640 million people, there are already 415 million mobile phone users, over half of which (more than 200 million) are smartphone users. By 2020, predictions say that 63% of Latin America’s population will have access to the mobile Internet.  

This news is crucial for both large global mobile providers and local tech companies. Latin America has proven to be extremely adaptable, adopting new technologies quickly and leapfrogging over older systems, such as landlines, entirely.

Brazil and Mexico already rank 3rd and 5th in the world for the most Facebook subscribers. In the Dominican Republic and Bolivia, mobile app usage is growing at 116% and 155%, respectively. As a whole, Latin America’s immense mobile growth presents a huge opportunity for businesses targeting the mobile market.

Why is Latin America experiencing so much mobile growth?

In 2015, Wharton published an article pegging Latin America as “the next big mobile battleground,” back when only 32% of Latin Americans had a smartphone. That article predicted that up to 50% of the region would be accessing the Internet via mobile devices by 2020. However, it is only 2018, and already more than 50% of Latin America’s mobile users are using smartphones to access the Internet. (more…)

E-Commerce in Colombia: Building on First Successes

Category : Colombia
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Colombia is one of Latin America’s biggest economies, yet traditional e-commerce has struggled to take a hold due to complex logistics challenges such as Colombia’s mountainous geography and lack of integration with international markets. Furthermore, many consumers in Colombia are still wary of online retail platforms and until recently, payments systems did not offer any options for the unbanked.

All that began to change when Rappi entered the market. Founded in 2015 as a grocery delivery service, Rappi has gone on to raise millions of dollars from US investors such as Y Combinator and Andreessen Horowitz for its intuitive app that allows users to order just about anything to their doorstep.

Rappi gained millions of users in Colombia and Mexico, as its founders quickly tackled issues like delivery logistics and offline payment systems that had long stumped e-commerce companies in Latin America. Rappi deliveries offer an immediacy that has helped skeptical consumers place their trust in online commerce. Furthermore, their cash-on-delivery payments system democratized mobile and electronic purchasing in Colombia and Mexico, where credit and debit cards remain relatively rare. (more…)