“There is happiness in duty, although it may not seem so” – José Martí
November 2, End Of Day
Quantum: Heading the movement towards urban electromobility in Latin America, Quantum is based in Cochabamba, Bolivia, and operates in the Mobility and Electric sectors. Their vision is to provide a comfortable, safe, and 100% electric transportation solution. They have achieved significant milestones with over 400 units sold across 5 countries. Their vehicles are not only 80% cheaper to operate than gasoline cars but can also be conveniently charged using a conventional wall plug. With a competitive price tag of 7500 USD, Quantum is revolutionizing the urban transportation landscape in the region. Get to know the case here.
Food4You: Embarking on a mission to transform the plant-based food industry, Food4You utilizes a biotech platform to enhance the texture, flavor, and nutritional profile of products. Their innovation lies in developing unique bacteria combinations for plant substrates, aiming to offer a wider choice of robust plant-based products. With significant interest from industry giants like Grupo Harmony and NotCo, Food4You is leading the way in biotech solutions for plant-based foods. Get to know the case here.
Presto: Aiming to redefine the credit landscape in Bolivia, Presto has made significant developments with 400 users in just three months and a waitlist of 10,000. Their unique position as the only non-regulated fintech with a VISA partnership in Bolivia is further highlighted by the fact that credit card penetration is nearly non-existent in the country. With $5M USD in funds from a bank partner, they are positioned to fill a significant market gap. Get to know the case here.
Dive deeper into other fundraising firms in latam here.
For the first time since 2003, the US is importing more goods from Mexico than from China, a shift driven by heightened economic and geopolitical tensions between the US and China. As a result, US companies, including tech giants like HP and Apple, are diversifying their supply chains away from China, with industries like the automotive sector also increasing their manufacturing presence in Mexico, as well as other Latin American countries.
Although this ‘nearshoring’ to latam trend isn’t new, there has been an intensified efforts to diversify supply chains due to geopolitical factors, rising operational costs, and logistics disruptions. According to a report published by the Inter-American Development bank (IDB), nearshoring can add annual $78 billion in exports from Latin America, with significant opportunities in industries such as auto, textiles, pharmaceuticals, and renewable energy. Mexico and Brazil are expected to see the largest gains, but all countries in the region stand to benefit.
Factors affecting nearshoring in Latin America:
1. Geographical Proximity:
One of the primary factors in nearshoring is the geographical closeness. Nearshoring promotes the strengthening of regional value chains as the operation focuses on a specific region, leading to cohesive development paths within the countries of the same region.
The geographical proximity of Latin American countries to the US provides logistical advantages, reduced shipping times, and better synchronization of work hours. This closeness fosters better communication and collaboration between teams.
2. Favorable Demographics:
Latin America boasts a young workforce and, in some markets, a relatively low cost of labor. A young and dynamic workforce can adapt quickly to new technologies and methodologies, making them an attractive option for businesses looking to nearshore their operations.
3. Global Supply Chain Fluidity:
The reconfiguration of global supply chains and the increasing digitalization of economies are significant trends affecting nearshoring. As businesses seek to make their supply chains more resilient and agile, they are looking at nearshoring as a viable option. The fluidity of global supply chains means businesses can quickly adapt to changing circumstances, and Latin America offers a strategic location for such adaptability.
4. Trade Agreements and Integration:
Despite having numerous trade agreements, there's a need for deeper and modernized regional integration to reduce trade friction and boost competitiveness. Harmonizing trade agreements and reducing trade barriers can make nearshoring more attractive. A unified approach to trade can simplify processes and reduce costs for businesses.
5. Opportunities and Risks:
The IDB emphasizes the importance of investment, infrastructure, and integration to take full advantage of nearshoring opportunities, and highlights the role of digital transformation and sustainability in the future of trade and commerce in the Americas. For instance, even though there is a talent pool emerging, more is needed.
Colombia: The Inter-American Development Bank (IDB) has approved a $415 million credit line, with an initial release of $50 million, to fund Bogota's second metro line, according to the city's mayor, Claudia Lopez. This financing is in addition to agreements with the European Investment Bank and the Development Bank of Latin America, underscoring investor trust in supporting sustainable transport for congested Bogota. The new Line 2, costing $8.5 billion, aims to serve about 2.5 million people, spanning 15.5 kilometers with 11 stations.
Mexico: Mexico's economy reported a growth of 0.9% in the third quarter, surpassing the 0.8% forecasted by economists, marking its eighth consecutive quarter of expansion, primarily fueled by domestic consumption and industrial activity. The growth was characterized by a 3.2% rise in the primary sector and a 1.4% increase in secondary activities, with strong performance in agricultural and industrial sectors compensating for weaker growth in services. Year-on-year, the country's GDP grew by 3.3%, slightly above the anticipated 3.2%.
Argentina: Amid a significant fuel shortage in Argentina, drivers in the country have been searching for petrol stations with available supplies, leading to long queues and empty stations. The shortage, attributed to internal refining complications and a delay in imports due to currency constraints, has come into focus as Argentina approaches a presidential runoff between Sergio Massa and Javier Milei. To address the situation and maintain stability in pump prices, Sergio Massa, in his role as the economy minister, has deferred planned fuel tax hikes.
The episode 26 of the Find The Way podcast is out:
🤝 Deal or No Deal: As international eyes turn to Latin America for opportunities, let's unravel the puzzle of M&A in the region!
Venture into the world of mergers and acquisitions in Latin America, where trust-building is an art and cross-border collaborations are the norm. Discover how IMAP closed over 250 transactions worth more than US$26 billion in 2022 assisting clients in over 49 countries. Delve into Brazil's advanced financial ecosystem and Argentina's resilience in the M&A arena. With intriguing deal sizes ranging from 25 million to a staggering 900 million dollars, this episode offers a comprehensive look into the M&A landscape of the region.
Join the conversation with industry experts Pablo Teubal from FS partners (IMAP Argentina) and Marzo Fiuza from Brasilpar (IMAP Brazil) as they disentangle the complexities and share their experiences.
Listen here.
