Social Impact Initiatives, Partnerships & Investments Spur Latin America's Startup Growth
Mastercard, Paypal, Google, Facebook and other large companies spur Latin America digital growth with partnerships and investments in startups and other small businesses.
Recent stories highlight social impact initiatives taken by Mastercard, Paypal, Google and other leading global organizations to accelerate the growth of startups and small businesses in Latin America. Such efforts promote racial diversity and financial inclusion while leveraging Latin America's accelerated digitization due to COVID. For full details on news stories below and weekly insights delivered to your inbox, subscribe to our newsletter LATAM Weekly.
Mastercard Spearheads Tech For Good Partnership to Empower Latin America Small Businesses
Mastercard spearheaded the Tech for Good Partnership, an initiative to accelerate business recovery and inclusive growth efforts in Latin America arising from the COVID pandemic. Other partners include banking companies Bancolombia, Banco Galicia and Citibanamex; and fintechs Mercado Libre and PayPal. The partners vow to use collective resources, assets, and expertise to prioritize digital and financial inclusion.
Financial inclusion efforts center on expanding basic financial services such as long-standing access to credit, disbursements of much-need financial aid, and educational tools to the millions of vulnerable Latin Americans.
Google & Facebook Help Build An Epicenter of Innovation & Diversity In Brazil
Although São Paulo and Belo Horizonte have traditionally been Brazil's main startup hubs, a new wave of cities are building their own ecosystems. This includes a “Black Silicon Valley” beginning to take shape in Salvador da Bahia, as reported by Tech Crunch .
The state of Bahia, home to 15 million people, has an 84% Afro-Brazilian population. Salvador, Bahia’s capital, centers around a local ecosystem hub, Vale do Dendê which coordinates with local startups, investors and government agencies to support entrepreneurship and innovation. It runs startup acceleration programs which have drawn the attention of international and national publications for innovative work in bringing startup and tech education from mainstream to traditionally underserved communities.
Portfolio Companies Backed By Google & Facebook
In approximately three years, the accelerator has directly supported 90 companies of which almost all achieved double-digit growth. Many have gone on to raise further funding or corporate backing by Top 5 tech companies. HIghlights include:
- TrazFavela: one of the accelerator’s first portfolio companies,TrazFavela is a delivery app that focuses on linking customers and goods from traditionally marginalized communities. The business grew 230% between the period of March and May and recently signed an agreement for further support and investment from Google Brasil.
- Diaspora Black: this Vale do Dendê Accelerator-backed company focused on Black culture in the tourism sectors attracted backing from Facebook Brasil. It grew 770% in 2020.
- AfroSaúde: the health tech company offers a new service to prevent COVID-19 in Brazil’s favelas (urban slums). It has over 1,000 Black health professionals on its platform, creating jobs while addressing a health crisis.
Large national and global companies have taken notice of this startup boom. Quintess, an IT company, which has become a major sponsor, announced a investment of $2 million over the next five years and a collaboration with Vale do Dendê to train around 2,000 people in tech and accelerate more than 500 startups led by Black founders.
Google also launched a 5 million reais ($1MUSD) Black Founders Fund in order to boost the Afro-Brazilian startup ecosystem.
SMBs Accelerate Tech Adoption in Wake of COVID
A recent study published by software firm Intuit details how the digitization of Brazil's small businesses has been propelled by COVID-19.
The survey of 1,128 business owners and decision makers in SMBs found that 49.7% are more digitally-enabled now than prior to the coronavirus pandemic (ZDNet).
While only 30.2% had plans to invest in digital systems prior to the pandemic, these companies had to accelerate adoption of systems, primarily to enable tasks around collaboration and e-commerce, when COVID-19 hit.
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