The new middle class in Latin America will have new unmet needs, startups will be best positioned to serve them
Latin America middle class evolution
Latin American consumers will evolve over the next 5-10 years, driven by an increase in technology penetration and raise in middle class affluence. These changes will uncover unmet needs for the at-large population across multiple verticals, and agile start-ups are best positioned to take advantage of these opportunities.
Lacking access to capital
To date, the amount of seed capital available in Latin America has been constrained, to a large extent due to a very limited amount of previous success stories and the significant cost of scaling up businesses across the regions.
Ongoing technology evolution
With the advent of low cost infrastructure (cloud computing) and higher penetration of internet media (social networks), growing businesses regionally or expanding to more developed markets has become a viable strategy for startups.
What is coming
The combination of a growing middle class with unmet needs, technology enabled lower cost startups and the advent of venture capital funds like Escala.vc focused on providing seed capital for entrepreneurs combine to develop a new batch of startups that can be successful in creating Latin American or global startups. We expect this new generation of startups to create and capture significantly more value than previous generations of entrepreneurs were able to achieve.
Technology adoption metrics
- Mobile Broadband Connections to reach 500mm in 2017 from 100mm in 2012
- Smartphone penetration to reach 45% in 2017, from 20% in 2012
Middle Class growth
- Affluent and middle class expected to double to 100mm by 2020 from 2010