Tech Overtakes Petroleum To Signal Latin America's Digital Transformation
Recent news demonstrates Latin America’s (LATAM) digital transformation as a tech company displaces petroleum giants to become Latin America’s most valuable company for the first time in history. We also see all sectors of life (from transportation to social to food) being touched by tech, and some of the world’s largest overseas companies securing strategic partnerships to gain market share in LATAM. For full details on these happenings and additional weekly news delivered to your inbox sign-up for our newsletter, LATAM Weekly.
Tech Overtakes Petroleum as the #1 Most Valuable Industry Indicating Latin America’s Digital Transformation
After a slow start, Latin American tech companies have accelerated growth. Over the past three years the number of local unicorns (privately held startup companies worth $1 billion or more) grew from zero to 17. Now, for the first time in history, MercadoLibre, an e-commerce platform, takes the title as the region’s most valuable company. State-controlled oil and mining giants previously held this title.
Latin America’s tech company penetration or share has been growing on average at 65% per year since 2003. In comparison, this growth has been 11% annually during the same period in the U.S. and 40% in China. Latin America’s market could grow nearly tenfold over the next decade: representing a potential value of trillions of dollars and improving hundreds of lives. (TechCrunch).
Chinese Ride Hailing Service Partners With WhatsAppTo To Gain Market Share From Uber In Brazil
99, a Brazilian ride-hailing service, controlled by China's largest company of the kind, Didi Chuxing, partnered with Facebook-owned WhatsApp. This move will allow users to request cars directly on the chat platform. The partnership, the first of its kind in the world for Didi, could give 99 an advantage in competing with Uber, the market leader in Brazil.
The partnership should also benefit low income Brazilians whose smartphones have less capacity to download apps, and people who live in regions with weak mobile signals. Livia Pozzi, Operations Manager at 99, discusses this expanded access:
“It will allow access to the service for a larger universe of people who will no longer need to download our app to order their rides.”
WhatsApp has 120 million active users in Brazil (more than half of the country’s population) making it the app’s second-largest market behind India. Ride-hailing service 99 has about 20 million registered users, and over 750 thousand active drivers across Brazil. (Reuters )
Initially, rides ordered over WhatsApp will have to be paid in cash, which is currently the payment method of 70% of the orders via 99.
Cloud Restaurant Plans LATAM Expansion Following $16M Debt Financing
Latin American cloud restaurant MUY changed its name to RobinFood and secured $16 million in debt funding to complement the company’s $15 million Series B round raised one year ago. MGM Sustainable Energy Fund II provided the debt financing. Now, RobinFood has raised a total of $36 million in funding to date. The recent capital raise includes investments from existing investors ALLVP (which led the Series B round) and Seaya Ventures (which led RobinFood’s $4 million Series A).
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