Market Update: IT Services in Latin America – Q3 2021
Latin America’s technology boom is attracting investor activity at an unprecedented level. The dominating countries in terms of deal count continue to be Brazil and Mexico, followed by Argentina, Colombia, Peru, Chie, and Uruguay.
The region is transitioning from an attractive nearshore hub to an innovation center. Investors see Latin America as a disruptive force in deep tech, FinTech, and AgriTech, as proven by investments in Chilean start-up NotCo, or Mexican unicorn Kavak. Despite the intensive activity in the tech sector, Latin America’s total tech market capitalization stands at 3.4% of GDP, signaling to investors that there is more opportunity in the space.
The most active verticals in the tech sector are fintech, big data, and e-commerce. The flourishing tech ecosystem facilitates disruption across many sectors: fintech services such as online payment platforms helped e-commerce companies outgrow the brick-and-mortar retail industry, and AI data capabilities revolutionized the agricultural space by increasing efficiency.
Latin America is well positioned for innovation in agriculture and sustainability, a trend that became increasingly important for institutions across the world. Costa Rica, Chile and 21 regional countries have announced plans to become “net-zero” emitters by 2050.
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 landscape in Latin America.