We highlight the digital transformation brought about by COVID-19 and success stories of Latin American businesses which pivoted effectively. Startup leaders and founders also provide their insights on the accelerated digitalization and data-driven opportunity in the region. For full details and weekly insights delivered to your inbox subscribe to our Latin America business newsletter, LATAM Weekly.
Tactics Used By LATAM Startups To Thrive Amidst The COVID-19 Crisis
While COVID-19 forced many Latin American startups to shut down, others found ways to reinvent themselves by pivoting business models to address changes in consumer behavior. In his piece for Crunchbase News, Greg Mitchell, an early stage investor in Latin America, describes startups' short-term survival tactics for long-term resilience and growth. Key tactics include:
Repositioning an Existing Business Model
Some startups launched a product or service that met their target market’s new needs, while others found ways to offer existing solutions to new customers. Examples include:
- Fitco: responding to gym closures, this Peru-based community management and CRM software for fitness centers launched Fitco Live. The platform allows gyms to continue delivering services to existing customers, attract new ones, and monetize online classes.
- Frubana: this Colombia-based startup that facilitates the process of buying farm-fresh food for small retailers and restaurants, introduced Club Frubana, a hub of tools and resources to help restaurants digitize their menus and websites, shop for supplies, stay up to date on industry news, and search for job opportunities. When Colombia implemented lockdown measures, Frubana also launched a platform, Fresco, to help consumers receive groceries at home.
Rethink the Entire Business
When Tripflix, a travel perks platform based in Argentina, saw business halt like most of the travel and tourism industry, it relaunched as Freecovid. The training and communication platform helps the hotel industry implement health and safety protocols outlined by the World Health Organization, World Tourism Organization, and the governments of the countries in which they operate.
Already present in Argentina, Brazil and Peru, Freecovid will soon be in Colombia and Mexico. Over 30 hotels in Brazil have implemented the program, and an additional 40+ in Argentina have begun the process.
How Remote Work Presents New Data-Driven Business Opportunities in Latin America
Our CEO, Geoffrey Michener, also had a piece published this week relating to the impact of COVID-19 on Latin American businesses. The article, “How Remote Work Presents New Data-Driven Business Opportunities In Latin America” published by Entrepreneur, details how the global health crisis is now accelerating a digital transformation on an unprecedented scale.
Even before the pandemic, Latin American consumers started to shift to buying online due to a rise in internet access and smartphone use. From 2016-2018, the region was the fastest growing in the world for Uber, Netflix, and Airbnb.
Remote work and the pandemic have prompted even more consumers to shift their shopping and payment behaviors towards online channels. Companies are investing heavily in digital infrastructure to support the demand. By 2025, 79 percent of all mobile connections in Latin America are expected to be via smartphones.
Latin America’s "Answer to Shopify” Raises $30M
Reflecting this rise in online consumer behavior, Buenos Aires-based Nuvemshop, which helps small and medium-sized businesses sell online, raised $30 million in venture capital. Funding came from previous investor Kaszek Ventures and new lead investor Qualcomm, with participation from FJ Labs, IGNIA, Elevar Equity and others.
Today, 65,000 businesses use the company's platform. Its services for small businesses include billing and payment processing, logistics and shipping solutions. The company has offices in São Paulo, Buenos Aires and Mexico City. The funding will support expansion into Colombia and Peru in 2021.
Alexandre Villela, Senior Director of Qualcomm Technologies Inc. and Managing Director at Qualcomm Ventures Latin America, explains how Nuvemshop has helped LATAM SMBs go digital:
“Nuvemshop’s platform has enabled thousands of SMBs across Latin America to go digital by tapping into the company’s one-stop shop of seamlessly integrated solutions… We share their strong engineering focus and look forward to helping them scale their business with our investment.”