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Cross-border pioneers in Latin America
February 9, 2023

One of the trends we have been keeping an eye on lately is the rise of startups that seek to provide solutions across international borders. From moving goods to sending money, we believe that these companies are tackling a massive business opportunity while also helping strengthen ties throughout Latin America.

Sending money across borders

The largest group of startups we have identified is looking to disrupt the way money moves across borders, with a focus on remittances, payments, and financing.

Within the space of sending money across borders, we have seen a rise in companies making remittances faster and significantly cheaper. On the consumer side, companies like Felix Pago are leveraging the power of blockchain technology and cryptocurrencies to perform nearly-immediate transactions using only WhatsApp. Others, like Global66, have created suites to send, receive, convert and save money in many currencies.

B2B cross-border transactions have been historically slow and expensive. To tackle this opportunity, startups such as Trace Finance offer international accounts to allow businesses to perform instant FX transactions at a smaller cost. There is also an infrastructure aspect of cross-border payments, which startup is Remittee is tackling through API-powered open rails that allow third parties to become remittance facilitators across Latin America.

Financing solutions in the space span from consumer to business. For example, Paisa taps into recurring remittance history to underwrite personal loans. Others, such as Finkargo, Marco or FinanEx offer services to importers and exporters, with products such as revenue based financing, factoring, confirming and FX transaction services.

We believe that the solutions being built by these companies will not only aid families who live on different sides of borders and international businesses; but local ones who benefit from faster and cheaper payments. Despite widespread skepticism around cryptocurrencies, we believe they represent an opportunity to reduce the number of intermediaries involved in moving money, resulting in lower fees and “steps” of the process. Faster and cheaper remittances can be game-changers for receiving families. Faster and cheaper international payments can represent millions of dollars in savings for companies, plus leaving them greater time available to focus on operations.

Sending goods across borders

The second largest group is building the future of cross border commerce. Logistics startups, such as Nowports and Nuvocargo, are building the foundation for this transformation by using technology to make moving goods across borders more efficient. Building on top of this foundation are startups such as Meru and Pandas, which help businesses easily acquire foreign goods for them to sell, or Wherex, that focuses on larger industrial licitation processes that will be essential to drive the nearshoring trend. Finally, there are marketplace enablers - such as Noc Noc - which allow individual sellers to access marketplaces from all across Latin America.

We believe that building these bridges is essential for Latin America to reach its true potential. There are twice as many Latin Americans as North Americans, but the complexity of operating regionally rather than locally means that most businesses tend to be limited to their own country. By reducing this operational complexity, these startups will enable businesses throughout Latin America to seamlessly operate at a much larger scale, which will unlock their full potential.

Managing a distributed and flexible workforce

Managing a global, virtual, and flexible workforce in Latin America presents big challenges for HR departments in the region. The Latin American workforce is evolving towards greater integration across borders and increased digitization. To effectively manage these trends, some startups have started to work on strategic solutions such as:

  • Sourcing key talent outside local markets such as Ontop to expand their reach and tap into new talent pools,
  • Implementing cross-border payment and benefit solutions, like Maslow, to enable more competitive retention policies,
  • Standardizing contract requirements such as Deel to improve HR efficiency, and
  • Designing specialized cloud-based software like Runa or Workia to manage a distributed workforce and secure employee data across geographies.

We anticipate that HR practices in Latin America will shift towards a more centralized and standardized approach, as digitization enhances decision-making capabilities within the HR function. This will result in increased efficiency, allowing companies to adopt a wider range of flexible work arrangements, ultimately leading to reduced labor costs and enhanced access to talent.

Providing affordable telehealth solutions

Many individuals seek medical treatment outside of their own country due to inadequate insurance coverage, or simply because they can't afford the out-of-pocket costs associated with receiving care. Luckily, a new group of startups have been working on solutions to offer affordable medical services across borders and providing an alternative to the traditional healthcare system to make it more accessible for everyone.

That is the case of 1doc3, Enterapia or Terapify, a group of telehealth companies that connects Spanish speaking people across Latin America with licensed doctors. Meanwhile, startups like Yana are ensuring that every Latin American, regardless of their location, can have immediate access to mental health tools thanks to their chatbot. We believe that the increase in companies of this kind will lead to a renewed attention in the healthcare industry to removing barriers to access, improving patient outcomes, and reducing healthcare costs by enabling remote consultations and monitoring.

Simplifying travel and long-term stays in trending destinations

Something we’ve seen and which we talked about in our 3 ⅓ Trends in Latin America, is the growing number of digital nomads and founders that are moving across borders as they seek their next adventure.

In particular, we see Mexico as one of the most attractive cities for professionals with flexible work schemes. Between 2020 and 2021, foreign arrivals to the country jumped +200%. The inflow of talent is not only due to the country's folklore, food, culture, or welcoming attitude to foreigners; but because it is the second largest market in the region with growing digital adoption and connectivity.

To host this inflow of talented professionals and business opportunities, we’ve seen increasing activity in the long-term stays space. Wynwood House and Kukun are two players that have taken advantage of the rise of this opportunity and now host properties in the most vibrant neighborhoods in Mexico City.

There are startups who are focusing on vacation planning. Examples include Nezasa and Guru de Viaje, who are focusing on making trip-building fast and breezy; and Wheel the World provides travel experiences for people with disabilities. Finally, startup Shuttle Central helps transport companies easily find customers who are looking for ground transportation in busy destinations like Cancun.

Cross-border pioneers in Latin America