Tropical Gringo

I’ve spent the last several months, exploring the state of Digital Innovation in Latin America.  Although I wouldn’t say that there are tons and tons of examples, what I would say is that there are some impressive companies.  The obvious examples are players such as Buscapé with their US $340 investment from Naspers and Mercado Libre, which had their IPO in the states a few years ago. As ComputerWorld recently published, Latin American Net Arena offers VC Opportunities.

Nevertheless, smaller companies such as VivaReal and Compra3 have achieved great success early on thanks to building world-class teams and executing very well.  Both of these companies, similar to Buscape and Mercado Libre, are focused primarily on Latin America though the potential to go global is being pursued by others.  Though I wouldn’t dissuade a company from targeting the global market, there is such a void at the moment in terms of interesting content and applications targeting the regions rapidly growing user base.

Indeed, Twitter just released some numbers, published also by TechCrunch, on user growth and Latin America is the fastest growing region.   Latin American culture is extremely social and this region has been shown to be heavy users of social media and mobile devices.  The end result is that the users exist for new applications and content, but, for the most part, they need to make due with a few local choices or hook up with the main players such as Facebook, Amazon, Twitter and others.

Also, in terms of taking advantage of the approximately 150 million Internet users in Latin America from a marketing perspective, it certainly seems as though most companies in the region are asleep at the wheel. There are certainly exceptions to this rule doing some pretty innovative things.  In fact, lately, Brazil has been in the news thanks to its growing economic leadership and even thanks to their recent interest in acquiring companies in the developed world.

Either way you cut it, there is a tremendous amount of opportunity in Latin America, which isn’t apparent yet to global investors and even people in the region.  There are some exceptions and these are growing.  Brazil, particularly, has been attracting angel investors such as New Yorker, Michael Nicklas, who has been quite active recently not only in terms of funding, but also, in promoting investment through speaking at conferences and his blog, Startupi.

As an example, I had the opportunity the other day to talk with another US investor interested in funding a company in Latin America in the digital space.  It was a great conversation as this investor is extremely sharp and am sure closes deals worth many millions every week.  Nevertheless, he was trying to rapidly come up to speed on the environment and the nuances of this market, which is not easy.  Some things don’t happen as quickly down here and some basic infrastructure (e.g., credit cards, e-commerce, etc.) are not well established, yet, the growth rates and early successes can not be denied.

I could quote many statistics showing that each country boasts growth rates in terms of users, time spent online, e-commerce and other areas of 40% and above.  Any of these statistics can quickly be found by doing a quick search.  However, this is more of a paradigm switch where more US and European investors need to wake up to the fact that they are ignoring a region with a dearth of content and applications, but with a user base that grows exponentially on a yearly basis.  Differentiating a company in Latin America is much, much easier and, for the most part, amounts to bringing world-class teams and execution to bear.

There’s no question that countries such as Brazil, Argentina, Chile and, to some degree, Mexico, are at a more advanced stage when it comes their start-up and investment ecosystems. Nevertheless, there are small pockets of world-class teams working away in countries such as Colombia and this will continue to grow.

It definitely feels like we’re at the beginning of something very big.  I am extremely confident that within three years Angel and VC investment in technology start-ups will have dramatically increased and two years after that Latin America will be home to at least ten powerhouses on a par with Buscape and Mercado Libre.

Innovación Digital en América Latina from Bogotech on Vimeo.

Innovación Digital en América Latina from Bogotech on Vimeo.

Hoy fue un increible dia por tantas razones.  Una de esas es que pude salir con mi esposa a bailar un poco de Salsa (o intentar) y salir a cenar.  Pero por otro lado, cuando yo he estado tan contento por haber logrado publicar las noticias sobre los logros de VivaReal de Colombia y Compra3 de Brazil en varias publicaciones, acabo de ver otra persona regando la voz y es nadie mas y nadie menos que Chris Brogan, un blogger, autor, conferencista, etc. muy reconocido quien esta visitando a Colombia.

No hay duda que poquito a poquito mas y mas inversionistas se van a dar cuenta del increible potencial que tiene esta region.  Dentro de cinco años veremos una explosion en inversion por parte de Venture Capitalists y Angel Investors del exterior.  Ver a ese post de Chris sumado a la de otros que estan regando la voz, me hace pensar que ese dia podria llegar aun mas temprano (3 años?). En todo caso, despues de habarme mudado aca hace 15 años de Silicon Valley, me siento increiblemente afortunado de tener la oportunidad de vivir esta epoca.

I’ve been so busy contributing to other publications that I’ve been falling behind in posting to my own blog.  Lately, I’ve been writing articles about companies such as Vivareal in Colombia and Compra3 in Brazil each with excellent prospects for the future. I’ve been psyched to see these articles published in the NYTimes and in Venturebeat.  There is such a tremendous opportunity in this region for setting up dev centers, targeting the region for products and services or both.

I just got back from a night of Salsa and Sushi with the Mrs. and, after waking up at 2:30am this morning should be hitting the sack.  Nevertheless, as if the day hasn’t been good enough, I just read Chris Brogan’s post on Colombia.  By now, I’m used to seeing fellow “Gringos” wowed by the life down here, but it’s so great to see someone who appreciates that aspect, but, more importantly, objectively, sees the tremendous potential down here.

That was just the cap to a truly amazing day where, aside from happy family times, I had some great meetings with top executives at two major multinationals down here, a financial services company and a friend who works at Twitter that I finally met in person (she’s down here).  Aside from all of this, Compra3 (amazing founders) had their production launch of their social commerce site, which I was able to write about to get the word out.

I should really back all of this up with more numbers and statistics, but I’m too tired tonight.  I’ll leave that for another post.

Conclusion:  there’s no doubt in my mind that Latin America is going through a transformation and that, within the next 5 years, the number of US VC/angel backed digital innovators with either dev centers or target market (or both) down here will explode.