Startup in LATAM ② : Argentina's repeated defaults have created a start-up that is not dependent on its own country
From Sao Paulo, Brazil, I flew to Buenos Aires, the capital of neighboring Argentina.
The History of Default
Argentina defaulted on its debt (default) in May 2020 this year. This will be Argentina's ninth default.
I was actually visiting in November 2019, but since that time, I had heard that the country would have default again, and the Argentine peso has dropped significantly in value.
I went to the supermarkets in Buenos Aires and found that they change the price tags every month (in some places, every day).
Some of them didn't have price tags, and when I asked them about it, they told me that the price tags couldn't keep up with the fall of the Argentine peso.
TBH, I couldn't imagine Argentina unicorns because of this default history.
Repeated Defaults Have Created a Start-up That Is Not Dependent on Its Own Country
But in fact, surprisingly, five companies have been born from Argentina with a value of over $1 billion.
Already listed, Mercado Libre (its market cap is ＄60B at the time of writing), a Latin American e-commerce giant like Amazon. Auth0 is also more than a unicorn. Its valuation is $1.92 billion and total capital raised to more than $330 million.
These are Argentina startups. They are second only to Brazil in number in Latin America.
Auravant Co-Founder, COO Leonardo Fernandez
When I talked to local VCs and entrepreneurs, I found out that Argentinean startups are hitting the global stage because they have a strong mindset of going after other markets.
The reason is that the domestic market is unstable.
Thus they do not intend to stay in the domestic market from the start.
For example, a startup called Auravant offers a farmland management tool that analyzes hygiene images, and this product is available in 35 countries.
The difference with Brazil is that Brazilian startups can become a unicorn in the domestic market.
Brazil has a large domestic market and is local first. In Argentina, local is a hypothesis test and goes out of the country.
There are four destinations.
The challenge creates a global startup.
Staying in Buenos Aires was terrific. I could meet great keys players, government persons, entrepreneurs, accelerators, and so on.
Of course, Argentine beef was wonderful! 🤤
After Argentina, I went to Santiago, Chile.
Chile has unique governmental support for startups. I'll write about it in my next post.
I'm going to touch on Colombia, which produced Rappi, so be sure to follow me on Twitter and don't miss any of these posts.
What did you think of Argentina's startups?
What would like to know about LATAM startups?
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