Published in Thomson Reuter’s Venture Equity Latin America on July 31, 2012, Volume XI, No. 13. Interview conducted by Dan Weil.
Entrepreneurship is growing by leaps and bounds in Latin America, and the trend is only going to intensify.
So says Allen Taylor, Director of Global Markets for Endeavor, a non-profit group that assists entrepreneurs in Latin America and other emerging markets. (See VELA’s June 15 issue for a story about Endeavor’s investment fund.)
Of the approximately 700 entrepreneurs Endeavor has supported since its 1998 inception, about two-thirds are in Latin America. The organization has offices in Brazil, Mexico, Argentina, Uruguay, Chile and Colombia.
VELA recently spoke with Taylor about entrepreneurship in the region.
VELA: How has entrepreneurship progressed in Latin America over the last five years?
Endeavor: There’s been nothing less than an explosion of high-growth entrepreneurs, particularly in the last three years, in areas like the consumer Internet. It has been particularly strong in Brazil and Argentina, and now we’re seeing a lot of
growth in Colombia and Mexico, and even Chile and Uruguay.
A shift in attitude has started toward risk-taking and being an entrepreneur. In the last 15 years, we’ve seen a change of culture in that direction. Demographics don’t hurt. The rising middle class means more new businesses.
The region’s place in the world is growing stronger, given economic problems in the U.S. and Europe. Latin America has been a good place to work over the last five years. Latinos who were staying in the U.S. after studying there are now coming home.
The region now has models of success such as Globant, a software development company based in Argentina, and MercadoLibre, an Internet auction company also based in Argentina.
VELA: Has the growth of Silicon Valley had an impact on what’s happening in Latin America?
Endeavor: Yes, people still look to Silicon Valley as a global role model. They’re inspired by Apple, Google, Facebook and others. We opened an office in San Francisco in 2009 to connect entrepreneurs in Latin America and other emerging markets with this part of the world.
VELA: Would you talk about the picture in individual Latin American countries?
Endeavor: The hottest market is Brazil. The unique thing is the size of the market, allowing you to build big companies. Sheer size is the number one thing attracting international venture capital firms.
They may have gone to China and India first. Now they’re going to Brazil. The international venture capital business is driving activity there. Visionary, pioneering, big-thinking entrepreneurs are tackling problems and building businesses. And by our estimates, the number of deals is doubling
every six months.
To be sure, part of the Brazilian market is starting to get overheated. So smart investors are looking at Colombia, Mexico, Argentina and Chile.
I’ve spent more time in Mexico over the last six months than any other market. I believe it could be the next big place for international venture capital. It has size, a general entrepreneurial culture, and seed and venture investors. Entrepreneurs are building ambitious, high-growth companies.
Colombia has seen a lot of growth in demand and is building pan-Latin American businesses. It’s similar in Argentina. They tend to build global or at least Latin American regional companies. I cited MercadoLibre and Globant earlier, but there
are at least two dozen more coming.
In Chile the government has embarked on efforts to boost the economy through innovation. For example,its Start-Up Chile program gives financial and housing assistance for entrepreneurs who move to the country.
VELA: What are the strongest sectors for entrepreneurs?
Endeavor: In the portfolio of companies we help, roughly one-third are in technology, one-third in consumer goods and services, and one-third in
A lot of the activity in technology is driven by global innovations – mobile phones and payments, the consumer Internet. And consumer Internet is where the majority of new companies are. It’s about the ways people interact and buy online. There’s something of a generation skip, with consumers who never had a computer accessing
the Internet through mobile phones. There’s a lot of entrepreneurial growth in Brazil, Argentina and Colombia – and a lot coming in Mexico.
In the consumer sector, there are a lot of businesses rising to meet the needs of the tens of millions joining the middle class. The companies we support range from an Italian restaurant company (Spoleto) to a chain of beauty salons (Beleza Natural) – both in Brazil. Consumer financial services also are starting to grow. We’re working with several companies in Colombia in this area, including Lumni, an education finance company, and Refinancia, a consumer lending company.
VELA: How high is the quality of entrepreneurship in Latin America?
Endeavor: The ones we see are truly world class. Given the difficult environments in which they operate, they are often even more impressive than entrepreneurs in Silicon Valley, New York or London. Over the next 10 to 20 years, I believe amazing companies will come from everywhere, and that includes at least a handful of high-impact global companies coming from Latin America.
VELA: How does entrepreneurship in Latin America compare with that of other emerging markets?
Endeavor: We don’t operate in India or China, but there are tremendous similarities between Latin America, the Middle East and Africa, where our other offices are located. And our guys in Latin America are the leaders for us. They’re out in front on business development, leadership and global vision. Latin America has done a lot of things right. Some of that is macroeconomics, some of that is demographics and some of that is just great entrepreneurs.
VELA: How can Latin American entrepreneurs improve?
Endeavor: We would love to see even more high-impact entrepreneurs – those with fast-growing revenues and tremendous job-creation potential. It creates a role model effect – think big.