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Latin America’s business and technology focus always seems to be on North America, while more sophisticated Latin American VCs and entrepreneurs consider other major markets of the world when considering where to scale, invest or seek talent – namely Europe, China, India and Japan.
There’s nothing inherently wrong with that: the U.S. and Europe account for 75% of FDI in Latin America by 2020, so, in many ways, if it ain’t broke, don’t fix it. But, beyond its magnitude, it is interesting to observe recent trends in Afro-Latin American technological exchange. Although Africa has a relatively small footprint in Latin American technology, on the contrary, its recent development has received special attention.
Last month, a South African-owned company bought Brazil’s largest last-mile delivery company iFood, turning it into Latin America’s most valuable last-mile delivery company, knocking Rapi out of the coveted spot.
Meanwhile, Africa has partnered with Bitso, Latin America’s largest crypto exchange, to facilitate Canadian-to-Mexico cryptocurrency transfers from Canada to Nigeria.
Apart from this increased exchange of capital, equity and expertise, the growing relationship between the two invisible regions is also remarkable.
Latin America has long been a platform for companies around the world to test their products before moving en masse to the real prize in the US market. In the year In 2020, I wrote about how Safi, a Kenyan Internet of Things startup scaled from Nairobi to Mexico’s industrial powerhouse, Monterrey, to test their factory AI on their biggest customers before watching it in Rio. Grande Bravo, however, as The rest of the world As reported, Latin America has also come to its own end. As founders, investors and land to trade and live across the two oceans that surround the region.
So why would an African start-up or investor look to Latin America? For starters, there are often similarities between these market segments. For example, Guatemalan startups working in social technology, such as solar panel and rural internet connection startup Kingo, told me they are more concerned about their African competitors than those in the US or Europe.
Another reason for bridging the African and Latin American technology markets is simply to fill an obvious gap. In the year In 2018, Huawei saw a clear opportunity and seized it while completing the South Atlantic Interlink (SAIL) submarine cable system between Brazil and Cameroon.
The numbers are still tiny. Case studies have begun. But the trend points to rapid growth and opportunity.
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