Market Update: IT Services in Latin America – Q2 2021
We have witnessed digital transformation pick up across the globe as the world continues to adjust to the increase in online engagement, work, and communication. The LATAM Region is no exception in this regard. An increased need for software development and other IT services across the world continues to drive the demand for Latin America’s nearshore services and talent pool resources.
The investment opportunity in LATAM is driven by the rising rates of digital penetration. The adoption of internet and mobile usage is increasing rapidly, and yet, marks only the beginning of digitalization in the region. Although tech penetration in LATAM is lower compared to other developed nations, it is growing faster, opening the door for innovation and growth. According to Atlantico’s report, Latin America Digital Transformation Report, Latin America’s tech market capitalization has been accelerating at an average YoY rate of 65% of GDP since 2003. In the United States, the tech market cap has increased at a rate of 11% while in China, at a 40% rate of GDP.
The second quarter recorded 30 deals, a slight increase from the first quarter of 2021. Deal volumes and valuations remain high as both strategic and financial buyers are confident in the IT & Software Services in the region.
7MA has completed important M&A transactions for companies with outsourced operations and / or delivery centers in Latin America and has developed unparalleled deal expertise and knowledge of the industry trends, valuation trends, and most active strategic and financial buyers. Please contact Horacio Yenaropulos, Garth Martin, or Kevin Postigo if you would like to learn more about the IT & Software Services landscape in Latin America.