Latin America is made up of 650 million inhabitants but the region has been slowly gaining pace to becoming a tech hub of the future. According to the latest study by EY, countries such as Colombia are increasingly taking the lead in bringing on technological adoption in the fields of Adtech, Healthtech, Blockchain and Proptech. The country also aims to become a blockchain hub in the region.
The move towards technological adoption has skyrocketed due to the pandemic, such as the e-commerce sector as indicated by David Geisen, Country Manager for Mexico for Mercado Libre at the recent Singapore Week of Innovation and Opportunity (SWITCH) ‘there has been up to an 81% growth in the e-commerce sector in 2021 as compared to 2020 making Mexico the top e-commerce market in Latin America, surpassing Argentina’.
Mr Geisen also sees the opportunities for Asian companies in the e-commerce space where the massive boom created as a result of the pandemic has accelerated this space. A good example would be to compare the warehousing space that Mercado Libre had two years ago which constitutes 30,000 square meters to the 400,000 square meters that it currently utilizes today.
Other opportunities in Latin America also includes the fintech space, especially the credit side were in Mexico, over 54 million adults do not have a bank account and access to formal credit. As such, fintech solutions are coming in and gaining market share to help serve the unbanked population.
On the agricultural segment, Pablo Casablanca, CEO of PCE Consultores mentioned that Latin America is a regional powerhouse in agricultural products and as such, opportunities are abound – especially in the area of
- Traceability whereby consumers are now increasingly focused on knowing and understanding the source of their food
- Productivity gains through the use of artificial intelligence for more efficient farming
- Preservation technologies to help the companies better store and export their products to new markets.
All of the above would help improve productivity, efficiency and marketability of agricultural products in Latin America.
In the healthcare front, Jose Mora, CEO for FarmaLatam mentioned that the region has one of the weakest healthcare systems in the world – but this provides ample opportunities for growth especially with Covid-19 accelerating this sector by leaps and bounds. This includes opportunities in e-consultations, telemonitoring and the use of artificial intelligence to provide better diagnosis.
In terms of Mexico, the number one health concern for the nation right now is diabetes. As such, hospitals, clinics and healthcare providers are hopping on the healthtech bandwagon in utilizing telemonitoring devices to monitor patients remotely, artificial intelligence to help detect symptoms and such to make consultations more accessible, and providing more accurate diagnosis and information for doctors to prescribe the right plan of action.
Therefore it is not surprising that Healthtech is a sector that the venture capital market is targeting. For instance, in Brazil over US$2.5 billion was invested into 222 deals with Healthtech emerging as one of the top two sectors for investments. Due to the influx of investment, startups are also taking notice and out of the 14,000 startups that are in Brazil, a majority of which are in the Healthtech, Edtech and Fintech space.
Investment activities have also risen in the region over the last couple of years, with over 104 corporate venturing deals being concluded in Brazil in 2021 alone. This coupled with the emergence of unicorns is proving that Latin America is coming to age into becoming a tech juggernaut in the foreseeable future.