"Time moves on for everyone.” - Diego Forlán (Uruguayan football player & manager)

MARKETS

September 5, End Of Day

• Argentina
  • S&P MERVAL Index = 1,765,465.04 (YTD = 89.90%)
• Brazil
  • BOVESPA Index = 136,502.49 (YTD = 1.73%)
• Chile
  • S&P IPSA Chile = 3,447.51 (YTD = -0.58%)
• Colombia
  • MSCI COLCAP = 1,341.65 (YTD = 12.25%)
• Mexico
  • IPC Mexico BMV = 51,661.48 (YTD = -9.98%)
• Peru
  • S&P/BVL Peru = 28,304.05 (YTD = 9.03%)

BUSINESS

Incomplete Digital Revolution

1. Persistent Digital Divide

• Despite notable progress, Latin America faces a significant digital divide. As of 2024, approximately 66% of the region’s population has access to the internet, with mobile broadband coverage reaching 75%. However, only about 14% of rural households have fixed broadband access, compared to 42% in urban areas.
  • Urban-Rural Gap: The urban-rural disparity in fixed broadband access remains a critical issue, limiting opportunities for rural populations to engage in the digital economy.
  • Internet Penetration: Overall internet penetration is growing, but the gap between urban and rural areas underscores the need for targeted infrastructure investments.

2. Connectivity and Quality Issues

• Internet connectivity in Latin America varies widely in both speed and reliability. The region’s average fixed broadband speed is around 25 Mbps, significantly lower than the global average of 60 Mbps.
  • Speed Disparity: In some rural areas, internet speeds can drop to below 10 Mbps, making it difficult to use modern digital applications effectively.
  • Service Interruptions: Around 40% of Latin Americans report frequent service interruptions, which affect their ability to work, study, and access online services reliably.

3. Unequal Access to Digital Skills and Tools

• The digital skills gap is another critical barrier to the region’s digital transformation.
  • Skills Gap: The lack of digital skills limits the ability of the workforce to participate in the digital economy.
  • Device Access: Access to digital devices is uneven, with only 65% of rural households owning a smartphone, compared to 85% in urban areas, further widening the digital divide.

4. Opportunities for Growth and Innovation

• Despite these challenges, Latin America has significant opportunities to advance its digital revolution. The region’s young population—over 40% are under 25—presents a prime demographic for digital skill development and innovation.
  • Youth Potential: Leveraging the young population for digital skill development can accelerate the region’s digital transformation.
  • Fintech and E-commerce: The rise of fintech and e-commerce, which grew by over 30% during the pandemic, highlights the potential for these sectors to drive economic growth.

Fundraising picks of the week

EnviosPet: EnviosPet offers a comprehensive platform for pet lovers. Some of their notable milestones include processing over 5,700 orders with a GMV of $170k monthly. Dive deeper into the case here.

illow: illow makes compliance achievable in less than 5 minutes. With over 4,500 clients ranging from startups to enterprises like WeWork, Illow is recognized as the highest-ranked Privacy Platform worldwide by G2. Dive deeper into the case here.

CardioTherMetrics: Their AI-enabled tool provides remote monitoring and assessment, making it a highly accurate solution for patients and healthcare providers. Focused on the US market with a global reach. Dive deeper into the case here.

Interested in Latin American businesses? Subscribe here to get business updates in the verticals that interest you the most.

Dive deeper into other fundraising firms in LatAm here.

CURRENT AFFAIRS

Argentina: Vista Energy plans to invest $1.1 billion this year to expand oil production from Argentina's Vaca Muerta shale formation, aiming to boost output to 100,000 barrels of oil equivalent per day (boepd) by 2026 and 150,000 boepd by 2030. The company is working to reduce extraction costs by 11% and address pipeline capacity constraints. CEO Miguel Galuccio emphasized the need for further investment to fully develop the vast shale deposit, Argentina's key hope for reversing its energy deficit.

Brazil: General Motors will begin producing its first hybrid-flex vehicles in Brazil, capable of running on 100% ethanol or gasoline alongside their batteries. The hybrid-flex models, set to launch by 2025, are part of GM's $1.42 billion investment plan in Brazil, with $1.1 billion directed to operations in Sao Paulo state. This move aligns with Brazil's strong ethanol industry and supports the nation's decarbonization efforts. GM is also considering a plug-in hybrid-flex model for the future.

Colombia: Mexican fintech Stori is entering the Colombian market with a $100 million investment over the next three years. The company, which has gained 3 million clients in Mexico, plans to launch its "S Card" in Colombia in September with credit limits starting at 200,000 pesos ($48). Stori aims to sign up 500,000 clients in its first year, targeting those underserved by traditional banks. This expansion follows a recent $212 million funding round.

FURTHER READING

Check our recently published insights here. Recent post:

🔍 Exploring the Rise of Insurtech in Latin America

Insurtech is revolutionizing the insurance industry in Latin America with a notable 18% increase in funding in 2022, totaling $219 million. This growth, primarily led by Brazil, Mexico, and Chile, is reshaping how insurance services are delivered, leveraging technologies like AI, big data, and IoT.

Sector Highlights:

• 📈 Diverse Activities: 12% of ventures are innovating new business models, 42% focus on digital distribution, and 46% enhance existing operations by collaborating with traditional insurers.
• 🚀 Leading Markets: Brazil leads with number of insurtach companies, followed by Mexico, showcasing significant insurtech activity and innovation.
• 🏦 Regulatory Advances: Mexico's Fintech law and ongoing regulatory developments in Colombia and Brazil are supporting the sector's growth and stability.

Insurtech in Latin America is not just growing; it's transforming the traditional landscape of insurance through technology, making it more accessible and efficient.

🔍: Read more here.