WEF LatAm 2018: finding the next LatAm unicorns

Latin America has become a fertile ground for digital entrepreneurs and start-ups, with Santiago, Buenos Aires and São Paulo at the helm of this development.

A panel on the World Economic Forum on Latin America, being held this week in São Paulo, addressed the topic and debated how to foster a better environment for the development of these companies.

The session started with a question on how Brazil can create more home-grown unicorns. The country has seen several companies reach unicorn status, or firms valued at over US$1bn: 99, Totvs and B2W Digital. While Argentina has online travel company Despegar.com and ecommerce site MercadoLibre, among others. But what are the key factors needed for Latin America's 'unicorn' breakthrough?

One of these factors is funding and financing, especially from a local ecosystem.

Most of these successful start-ups in Latin America all have in common the fact that they were started by entrepreneurs who were trained overseas, had good connections and had relatively easy access to capital, the majority of the panelists agreed on.

Also present at the panel, Salesforce COO for Latin America, Enrique Ortega, later spoke to BNamericas and presented a slightly different view.

In his opinion, capital has become more available and entrepreneur-friendly in the region. In other words, it doesn't really matter whether the venture capital is homegrown, regional or from another continent.

Venture capital from abroad has more than doubled in Latin America since 2013. The number of venture capital deals in the region reached a record-high 197 in 2016, according to WEF.

Ortega said four things are necessary for entrepreneurs to flourish: an innovative idea, leveraging technology, a focus on product rather than on results, and government help (lighter regulation and less red tape).

Marco Crespo, president of startup Gympass, said money is important but companies should not target the next billion, and rather focus on solving problems faced by groups of regular people. "The larger the group and the better the product, the more successful the company will be," he said.

Amiram Appelbaum, chief scientist and chairman of Israel Innovation Authority, said that any start-up infrastructure has to be global, because talent is everywhere. "As technology does not have frontiers, it is important that governments help technology to flourish."

"It is possible to provide education through the internet today, via satellite, in remote villages in Amazonas and this is they the key to lowering socio-economic gaps in all Latin American countries," he added.