Week 40, 2024 - Latin America

“As long as I'm a good person and I do things from the heart, that's all that matters.” - Gisele Bündchen (Brazilian fashion model)

MARKETS

October 3, End Of Day

• Argentina S&P MERVAL Index = 1,754,992.39 (YTD = 88.77%)
• Brazil BOVESPA Index = 131,671.51 (YTD = -1.87%)
• Chile S&P IPSA Chile = 3,461.12 (YTD = -0.19%)
• Colombia MSCI COLCAP = 1,303.27 (YTD = 9.04%)
• Mexico IPC Mexico BMV = 51,674.54 (YTD = -9.95%)
• Peru S&P/BVL Peru = 30,051.74 (YTD = 15.76%)

BUSINESS

The State of Digital Transformation in Latin America

Latin America continues its journey towards digital growth, with both promising advancements and challenges that persist in the region. Atlantico.vc published their yearly report on the digital transformation in Latin America. Here are some key points from the analysis:

1. Rising Internet Connectivity

In 2024, Latin America's internet penetration reached 76%, aligning with global averages. Cellular mobile connections have surged to 97% per capita, demonstrating strong mobile infrastructure expansion.

• Social Media Usage: 83% of the population engages with social media, showing widespread digital interaction.
• Mobile-Driven Growth: The robust mobile network is driving increased connectivity, especially in remote areas.

2. Untapped Value in Tech

Latin America holds tremendous potential to catch up with global tech leaders, with a projected $4.17 trillion in value creation as the region advances in digital transformation.

• Brazil alone could unlock $1.44 trillion in value by improving tech integration.
• Catching up to India or China’s level would add an additional $831 billion for the region.

3. Digital Infrastructure Gaps

Despite advancements, Latin America is still significantly behind in digital infrastructure, with tech companies accounting for just 3.5% of GDP, compared to 18.8% in China.

• This gap highlights the immense growth potential, especially in countries like Brazil and Mexico.
• Closing this gap could lead to a surge in innovation and entrepreneurship across the region.

4. Opportunities in Fintech (Still) Stand Out

The rise of digital payment solutions like Pix and Open Finance is transforming the financial landscape, with more than 87% of Brazilians using Pix by 2023.

• This shift in payment habits presents a significant opportunity for fintech firms in the region.
• Fintech adoption across Latin America is expected to drive further economic inclusion, with increased access to banking services for the unbanked population.

Fundraising picks of the week

TELL Toolkit Inc: TELL Toolkit is pioneering the use of AI in digital health to analyse speech for early detection of neurodegenerative diseases such as Alzheimer's and Parkinson's. This solution is remote, non-invasive, and quick, offering analysis within 5 minutes. Get to know the case here.

tuGerente: Their platform handles over 2M transactions and analyzes over 600k reports monthly. They have over 700 paying SMEs. With a strong emphasis on inventory management and integration, they've been EBITDA positive since November 2022. Dive deeper into the case here.

Dora: Dora has reached nearly 1000 tenants in just 12 months and achieved a 30% month-over-month revenue growth. The company has expanded to 17 new city markets in Colombia in 2023. Dive deeper into the case here.

Interested in Latin American businesses? Subscribe here to get business updates in the verticals that interest you the most.

Dive deeper into other fundraising firms in LatAm here.

CURRENT AFFAIRS

Mexico: Claudia Sheinbaum was sworn in as Mexico's first female president, pledging to advance women's rights and maintain investor confidence. She aims to uphold fiscal discipline, ensure central bank autonomy, and secure foreign investments. Sheinbaum also committed to reforms on gender violence and public services, while ruling out a major tax overhaul despite facing economic challenges like a large budget deficit and slow growth. Her presidency follows her predecessor's promise of "continuity with change."

Brazil: Moody's recent credit rating upgrade of Brazil to Ba1, just one notch below investment grade, is expected to reduce the country's risk premium and attract non-resident investments, according to Finance Ministry officials. The upgrade boosted the Brazilian real and lowered interest rate futures, although rates remain above 12%. Officials remain confident in meeting fiscal targets, despite market concerns over recent government spending and tax policies.

Guyana: Guyana received 27 bids from major energy firms, including Shell and Chevron, for a 12-month contract to market its share of crude oil. The contract, starting in November, covers crude from the Liza, Unity Gold, and Payara projects, part of a production-sharing deal with Exxon Mobil. The government expects to market around 23 cargoes, subject to production rates.

FURTHER READING

Check our recently published insights here. Recent post:

?? SaaS Innovation in Latin America

Latin America is emerging as a dynamic hub for SaaS development. These technologies are revolutionizing automation, data analysis, and financial services across the region.

Key Innovations and Trends:

• AI and ML Integration: Enhancing SaaS capabilities in automation and personalized services, especially in e-commerce and financial sectors.
• Payments Sector Evolution: APIs are streamlining financial services, improving access and user experiences in digital payments.
• Expansion Strategies: From regional "land and expand" approaches to entering U.S. markets, Latin American SaaS companies are scaling up and crossing borders.
• Enhanced Cloud Infrastructure: Investments in local data centers and cloud services are reducing latency and boosting the reliability of SaaS offerings.

These advancements position Latin America as a significant player in the global SaaS landscape, offering innovative solutions and opening new markets.

???Read more here.