The entrepreneurial ecosystem It has its peculiarities and those who are immersed in this world may be more familiar with the use of language and its names. Hence, mentioning that more and more ‘unicorns’ from the Río de la Plata or the region are shaking up the international financial markets is good news for the development of ‘startups’.
If someone is not related to this terminology it is necessary to make a parenthesis to describe a ‘Unicorn‘which, in the business world, is not about the mythological animal. Under this name, companies valued at more than USD 1 billion in some of the capital raising stages and that are closely related to the use of the technology in your business model.
One of these ‘startups’ linked to the financial and technological market (‘fintech’) made news this week: the Argentine firm Whoa announced that it had reached an agreement to acquire the ABC Capital bank of Mexico, an operation with which it plans to accelerate its expansion projects in that country, with an investment of USD 150 million.
Created in October 2017, by Pierpaolo Barbieri, in Argentina and with operations also in Mexico since October 2020, Ualá seeks to facilitate access to the financial system by offering a credit card prepaid international free – it has already issued 3.5 million cards – that can be used in shops and online sales sites. The company offers other services, such as personal loans, collection systems for entrepreneurs and merchants, contracting insurance and investments in common funds.
In the region, the ‘unicorns’ are gaining every terrain. Year 2020 closed with more than 20 companies with a valuation of $ 1 billion or more.
Only in the Argentine case, Ualá joins other firms with these characteristics. Among them: Mercado Libre, Despegar, Globant, OLX, Auth0, Vercel, Aleph, Mural.
When talking about ‘unicorns’ originating in the Southern Cone, Uruguay is not far behind and with the recent incorporation of dLocal Payments As a firm listed on the Nasdaq Stock Exchange, its credentials and valuation skyrocket in the markets. Created in 2016 by Sergio Fogel and Andrés Bzurovski, it is a platform that offers digital payment solutions in emerging markets to companies that are not established in those areas.
The firm operates in 30 countries, with clients such as Microsoft, Amazon and Spotify. In September 2020, in the midst of a pandemic, it had become the first Uruguayan ‘unicorn’. dLocal today has a value of USD 16 billion, thanks to alliances with companies like Amazon and Uber, while other Latin technology firms are joining the wave.
In the first nine months of 2021, Latino startups, from Brazilian online lender Nubank to Colombian courier firm Rappi, they raised USD 14 800 million in new money, an increase of 174% from 2020, according to data provided to Reuters by the firm CBInsights, according to América Economía.
The rise of Latin American ‘unicorns’ is being driven by a’boom‘of electronic services that was accelerated during the quarantines due to the pandemic. “The companies in the region have matured in the last five years and now we believe that there will probably be between two and three Latin American technology stock trades per quarter, by next year,” said Rodrigo Maldonado, executive director of Morgan Stanley in Brazil, referring to to stock debuts in New York and quoted by Reuters.
While Latin America is still behind Asia, Europe In the US and the US in terms of tech startup volumes, the widespread and growing use of smartphones, wireless networks, and payment cards has created immediate demand for new digital services. Hence, financial entities related to venture capital, such as SoftBank Group Corp, General Atlantic and Sequoia Capital set your eyes on the startups in the region.
What makes the tech unicorns in the region have these kinds of leaps? Uruguay XXI, the Investment Promotion agency, Exports and Country Image, explains that among the competitive advantages The multilingual and highly qualified talent, its beneficial time zone when doing business with the great global markets and the cultural affinity stand out. Added to these are its advanced telecommunications infrastructure, a widely digitized society, and excellent tax benefits and government incentives.
Another aspect that weighs on the internationalization of the region’s ‘unicorns’ is reflected in the stock market: Latin American stock exchanges are dominated by traditional firms related to banking or commodities, which pushes startups to seek expansion on Wall Street, hand in hand with investment banks or venture capital investors .
And the leaps of the Latin American ‘unicorns’ will continue, to the extent that smart phone consumers in the region use smart phones more. digital wallets and even make a more daily life to demand other services, such as health or education.
Does Ecuador have ‘unicorns’ on the regional map? The country for now does not have a ‘startup’ that is at that level of valuation. The company that has reached the highest so far is Kushki.
The ‘fintech’ Kushki, co-founded by three Ecuadorians, obtained financing for USD 86 million in the first half of this year, in a capital round called ‘Series B’, through which it seeks to increase the value of a company and its income .
With this investment, this payment platform becomes a technology giant, valued at USD 600 million. The round was led by global growth equity funds such as Softbank, Kaszek Ventures, DILA Capital and Magma Partners. The goal has been set and it is only a matter of time.
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