How are the LatAm Startups?

A survey conducted by LAVCA revealed key points about startups in the region, such as the number of jobs they generate and the preferred secondary markets in each country.

Facebook commissioned the Association for Private Capital Investment in Latin America (LAVCA) a survey on the situation of startups in the region. The investigation focused on the Q4 of 2018 and the LAVCA research team verified the answers with primary and secondary sources.

LAVCA consulted 227 Latin American companies for their study. Most of the startups that responded to the survey have raised investments from $500k to $ 100m. Also, executives of 88% of the startups surveyed were responsible for answering the questions.

“This research establishes a starting point that allows us to understand the entrepreneurial and technological ecosystem of Latin America at a key moment of growth in the region,” said Julie Ruvolo, director of Venture Capital at LAVCA.

LAVCA surveyed at a time when there is much expectation in Latin America for investment. In 2018, venture capital firms financed $2b to Latin American companies, a record. This amount promises to exceed in 2019 with the announcement of $5b investments by Softbank.

Survey’s highlights

These are some figures highlighted by the study:

The startups consulted have created more than 25,000 full-time positions and produced an average of 129 works each one, with 4 out of 5 jobs located in Latin America. Besides, Latin American executives usually have experience in ventures. 66% of respondents have founded more than one company, and 59% advise other startups. 89% of startups reported net revenue growth for 2017-2018.

The secondary markets preferred by the startups that participated in the survey vary by country. Mexican startups provide their service to global and Latin American markets, including Brazil, Argentina, Colombia, Peru, the United States, and Asia. For Chilean startups, Brazil, Argentina, and Mexico are its secondary markets. Argentine startups concentrate in Brazil and Mexico as their most critical secondary markets. Brazilian startups develop in their local market, with Argentina, Chile, Mexico and the United States as their secondary markets.

73% of startups use innovative technologies such as big data, machine learning, or artificial intelligence. Also, 59% of startups measure impact, new jobs and financial inclusion as the most common. Gender equity within their workforce is an achievement in 29% of startups.

A new generation of entrepreneurs

“We are watching a new generation of Latin American entrepreneurs who dream big, execute with excellence and build incredible and high-impact companies,” said Nicolás Szekasy of the LAVCA Board, KaszeK Ventures Managing Partner, and co-founder of MercadoLibre. “The next 20 years look even more promising. We are at a turning point in the region with technological trends, talent, investments and success stories that increase and accelerate this cycle. “

“We are happy to partner with LAVCA to bring this knowledge to the region that confirms that the ecosystem blooms in Latin America. Facebook is committed to nurturing this ecosystem by providing resources and tools to local innovators. We are all building a sustainable ecosystem that will shape the future of the region, “said Susana (Tuli) Cipriota, Leader of Product Alliances for Facebook in Latin America.

LAVCA (Association for Private Capital Investment in Latin America) is a non-profit organization dedicated to supporting the growth of private capital in Latin America and the Caribbean.