Top 5 Latin American Tech Hubs
Latin America has become one of the world’s most promising regions for start-up activity and tech talent. Venture capital investment in the region has doubled annually since 2016 before reaching a record high of $4.6bn in 2019. The COVID-19 recession has impacted this flow of capital, but many of the region’s start-up communities have shown remarkable adaptability and resilience in the face of recent challenges. World Finance takes a look at five of Latin America’s most exciting tech hubs.
The lively city of São Paulo is often referred to as Brazil’s innovation powerhouse, with its dynamic tech community attracting a steady flow of VC funding from all over the world. Over 60 percent of start-up investments in Brazil are concentrated in the city, and the south-eastern megalopolis is home to a rich tech ecosystem that supports an impressive number of local ‘unicorns.’ It boasts more fintech start-ups than any other Latin American city. Tech giants such as Amazon, Uber and Spotify have chosen the city as their Latin American base. The well-established nature of São Paulo’s technology sector has spared it from the worst of the COVID-19 recession, with many of its start-ups not just surviving, but thriving in these economic hard times.
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Mexico City: Gateway to the Region
Home to over 21 million people, the sprawling megacity of Mexico City is fast establishing a reputation as one of Latin America’s most promising tech hubs. For many investors, Mexico is something of a gateway to the rest of Latin America. While Brazil might be more populous, its primary language is Portuguese, which can pose a challenge to businesses looking to establish a wide-reaching Latin American presence. Spanish-speaking Mexico, meanwhile, provides the ideal entry point to the region’s growing economies, while its capital also enjoys a strategic location with the US tech hubs of Los Angeles and Austin a relatively short flight away. Streaming giant Netflix is one of many big-name companies that have established a regional headquarters in Mexico City, marking a vote of confidence in the city’s thriving tech community.
Santiago: The ‘Chilecon Valley’
There’s a good reason why the Chilean capital has earned itself the nickname ‘Chilecon Valley.’ A rather remote city surrounded by the Andean mountains, Santiago is perhaps an unlikely tech hub, but it has long been a hotspot for entrepreneurial activity. Back in 2010, the Chilean government launched the ‘Start-up Chile’ seed accelerator for small business, which provides equity-free investments for start-ups from around the globe. Since its launch, it has worked with over 1,500 start-ups from 80 different countries. The nation ranks as Latin America’s top country for entrepreneurship according to the 2020 edition of the Global Entrepreneurship Index. The forward-thinking and adaptable tech community will help to drive recovery in the aftermath of the Coronavirus crisis.
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Buenos Aires: Blockchain and Incubation
Some of Latin America’s most successful start-ups have been borne out of the Argentine capital of Buenos Aires. The city is home to a lively and ever-expanding technological ecosystem, gaining a reputation as the region’s best performing tech incubator. Ecommerce giant Mercado Libre is undoubtedly the city’s greatest success story, but Buenos Aires is also establishing a name for itself as a regional blockchain hotspot. The number of Argentinian blockchain and cryptocurrency companies rose by 10 percent in 2019 alone.
Medellín: Reinventing a Reputation
Colombia’s second-largest city has seen its tech scene grow significantly in recent years. The city has been working hard to reinvent itself and shake off the reputation that has dogged it for so many years. Time magazine dubbing it “the world’s most dangerous city” back in 1988 is a distant memory for officials. Nowadays, Medellín is associated with some much more positive adjectives: innovative, open and dynamic. In 2019, two of China’s largest tech companies, Huawei and Tuya Smart, announced that they would be establishing bases in Medellín, specifically within the city’s specially-developed Innovation District. The Ruta N complex, where both firms will be based, is a co-working space designed to support innovation and collaboration between start-ups.
