Basically, a startup starts from an innovative idea about a product or a service that is executed through new digital technologies in a different way than traditional businesses. In addition, it seeks a sustained increase in its growth with the minimum capital and operating costs as low as possible.
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When it comes to entrepreneurship, we also have a lot to celebrate in Hispanic Heritage Month (September 15-October 15). Large companies were at some point the best Latin startups and they became the famous unicorns, here is a compilation of the best.
The value of a startup, like all companies in the world, is measured by its market value. Among the most important in Latin America in 2021 are those created in Brazil, Mexico, Colombia and Argentina. These are the 10 most important and their country of origin:
Also known as Nu Bank, it is a fintech Brazilian founded in May 2013 by David Vélez (Colombia), Cristina Junqueira (Brazil) and Edward Wible (USA). The story behind its founding, according to David Vélez, was due to a bad experience in a bank in Brazil.
The secret was the simplest: offering financial products with the lowest commissions and in some cases non-existent with excellent customer service, all digitally without the need for a physical branch.
Nu has operations outside Brazil only in Colombia and Mexico, the engineering part is in Berlin and it has a technology development center in Buenos Aires. In addition, it is one of the 100 most influential companies in the world according to the magazine TIME.
Kavak was born in Mexico by the hand of the Venezuelan Carlos García, who after two years of stay in this country founded the used and pre-owned car trading company in 2016. Together with the current CEO, they started the company Loreanne García, who was Strategy coordinator Corporate for Coca Cola FEMSA, and Roger Lauhglin, who served as Director of Sales for Linio, a company for which Carlos García also worked as director of the Mexico office since 2014.
The mechanics are very simple: buy used cars at fair prices, recondition them and sell them to offer customers a service free of all risks. His philosophy is “work smart and make it happen” and, like any good startup, Kavak fully complies with the principles of rapid growth and great support in digital technology, as well as great empathy.
Today, it has five offices in Puebla, Monterrey, Guadalajara and two in Mexico City, as well as one in Buenos Aires, Argentina, and another in Sao Paulo, Brazil. In addition, in Mexico they have five showrooms in the metropolitan capital and four inspection centers.
One of the companies of delivery most important in Latin America that, as a good startup, has diversified its offer by offering more and more services for its users. It was founded in 2015 by Simón Borrero, Sebastián Mejía and Felipe Villamarín in Colombia.
Its great growth goes hand in hand with its application that allows you to order your favorite products from stores, restaurants, pharmacies and receive them at the door of your home. They currently have a presence in nine Latin American countries, in the most important cities.
Rappi has the honor of being the first Colombian unicorn company to reach a commercial value of $ 2 billion dollars. Today, its value is $ 5.2 billion, far from being nominated as a decacorn, that is, its value exceeds $ 10 billion. How long will it take them to reach that goal? In a couple of years we will know.
Company founded in Brazil by Arthur Lazarte, Michael Mac-Vicar and Victor Lazarte in 2011. It is dedicated to the development of different types of games and platforms that include everything from sports to the famous team battles.
Their success is based on the large number of downloads of the more than 70 games they have released, which reached the figure of 2,000 million with a spill of more than $ 70,000 million dollars a year. Thanks to this growth, it caught the attention of investors: at the end of 2019, it received an investment of 60 million dollars and its change to be called a unicorn.
Brazilian company created in 2018 in the city of Sao Paulo by the German Florian Hagenbuch and the Hungarian Mate Pencz. It has a digital platform dedicated to real estate trade that uses technology to buy and sell a property, but without excessive documentation.
It started as a company that acquired real estate and remodeled it to later sell it. It is striking that their transactions are in cash and have an advance sale model, where they provide the client with up to 50 percent of the sale value, even before selling the property.
As of 2019, it allowed the publication of third parties in the cities where it has operations at no cost, but offered its remodeling and financing services for potential clients. Among the facilities offered are virtual tours or treatment and personal visit.
The main advantage of an emerging company is that everything starts from the vision of an unmet or perfectible need. They do not need a large initial investment to start the project and, if required, they make use of private investors willing to cover financial needs.
This is not to say that it is easy. Nor is it about doing a formal executive project complete with studies of marketingAlthough it is necessary to have clear objectives and be willing to accept failure, at least in the first attempt.
Another great advantage is their small size, thanks to which they can adapt and evolve almost immediately and respond to the demands that your market demands and, if necessary, adapt the service or product offered.
On the other hand, the great difficulty for Latin American startups is financing. However, thanks to the increasing profitability and reliability of emerging companies, the number of private equity investors has increased.
Starting a business of any kind is quite an odyssey, and failing can be part of trying. Unfortunately, in Latin America failure is seen as something impossible to accept and creates a stigma.
According The Failure Institute (TFI): “Anywhere in the world, when a business starts up it is more likely to fail than to be successful; On average, 75 percent of businesses close within two years. In other words, most companies fail and why has not yet been recorded. “
Among the most recurrent failures in interviews with failed companies in Mexico are:
- Problems in the development of ideas for the product or service.
- Bad management in finances.
- Poor selection for the board of directors.
- Lack of knowledge to obtain resources and infrastructure.
- Lack of knowledge of customer or user needs.
- Lack of support in public policies.
- Weakness in supervising and hiring associates or volunteers.
Based on this same experience, the TFI highlighted the profile of the Mexican social entrepreneur as follows:
- 49.6 percent are over 30 years old.
- 45.2 percent have more than 10 years of work experience.
- 66.1 percent have a bachelor’s degree.
- 38.3 percent have 1 to 3 years of experience in managerial positions.
- 65 percent had 1 to 5 workers.
- 71.3 percent had between 1 and 3 partners.
Not necessarily, but they can be. The companies called unicorn are those that, for the most part, started as startups with the difference that their market value already exceeds $ 1,000 million dollars in the first year of operations, which is not anything, although this was the beginning of many of the huge real estate, technology and financial companies that exist today.
There are several ways, continue with the emotion and keep it as is, go public (called in stock market slang as exit) or “just” sell it for a few million dollars and dedicate yourself to enjoying the good life.
To give us an idea, in June 2021 the German mobility platform Uber acquired Cornershop, app Chilean e-commerce for the “modest” amount of ¡$ 3 billion! Both platforms are very well known in Latin America.