Latin America – a new frontier for British​ tech

Russ Shaw, founder of Tech London Advocates and Global Tech Advocates, highlights the opportunities afforded to tech startups and scaleups in Latin America.

As we reach the one year anniversary of the Prime Minister triggering Article 50, setting the UK out on the course of no return towards Brexit, we find ourselves in an unenviable position but one that we must embrace and make the best of. With the future of the British economy hanging in the balance, along with the prospects of the tech industry as its fastest growing sector, we need to look forward with the aim to secure our future growth opportunities.

Europe has long stood as the primary trade and economic partner for the UK, and the tech sector has majorly benefitted from that collaboration, particularly when it comes to the influx of talent, investment and the exchange of ideas with other leading hubs like Paris and Berlin. Similarly, established tech ecosystems like Silicon Valley have long regarded the UK as their top investment destination in Europe, as evidenced by recent data from London & Partners.

However, in order to shape Brexit into a positive opportunity we must expand our horizons and look beyond traditional trade partners. A global Britain that connects with new markets and tech ecosystems should be the objective, and there remains an untapped region of the world with a burgeoning tech industry – Latin America.

Long overlooked as a global partner, Britain’s trade with Latin America within the last decade has been growing much faster than its trade with the EU. Flying under the radar, Latin America has been rapidly developing over the years. From vast improvements in education participation to slowly ending unrest in troublesome regions, Latin America has been improving on all fronts and is now showing its readiness for international business and collaboration.

One area that deserves particular attention and which would offer Britain significant growth opportunities is the LatAm tech sector. The continent is slowly but surely developing as the new battleground for investors from around the world who are seeking to discover the latest startups that are set to disrupt the global innovation trends.

As the region’s tech industry prospers, Britain has a unique opportunity to position itself alongside the leading tech hubs of the world that are recognising the potential of Latin America. It is key to note that Mexico and Brazil are two of the top three markets for Google and Facebook in terms of monthly users. In addition, Latin America is a top growth market for the likes of Spotify and Netflix, indicating that the region has made significant strides in offering the right infrastructure needed for the creative and technology industries to prosper.

The leading tech powerhouses like China and Silicon Valley have already taken notice, steadily investing in the region – international investment has more than doubled since 2013, with 25 new investors entering the region in 2017 alone, including SoftBank. In fact, Chinese venture capital investment in Latin America has jumped to $1 billion since the start of 2017, compared with around $30 million in 2015. In addition, American VC giant Sequoia Capital also recently made its inaugural investment on the continent, backing Brazilian FinTech startup Nubank.

The continents technology landscape largely mirrors that of Europe, as its tech specialism range from FinTech startups to AI and machine learning companies, as well as many ride-sharing apps such as 99, which was recently bought out for $1bn by Chinese investors.

Startup hubs that are open for business and eager to build cross-continent connections have emerged all over the region, with Colombia perhaps standing out as the most appealing tech cluster. The country is rich with innovation and home to a number of private equity, venture capital and seed funds, and is fast becoming the access point for investment opportunities in the continent. Colombia’s growth and collaboration prospects have now further extended with the recent launch of its first private sector international organisation, Tech Bogotá Advocates, a sibling organisation to the Tech London Advocates network and the newest addition to the Global Tech Advocates community.

It is abundantly clear that Latin America is an emerging tech ecosystem whose potential is fast being recognised by all the main innovation hubs around the globe. While it is key for Britain to not lose touch with traditional investors and partners in Europe, the US and China, it will be new markets like LatAm where future growth prospects will be found.

The shadow of Brexit is looming, and in order for the British tech sector to remain on its current prosperous trajectory, we must adopt a global model of collaboration and recognise new clusters of innovation that will facilitate progress in the tech space.