LAVCA: Beyond the buzz, what does actual AI progress look like in LatAm? Any particular examples from your portfolio would be helpful for us to understand the bigger picture.

Hi Ventures: Jimena likes to say that very soon, all startups will be AI startups. When ChatGPT launched in November 2021, it captured the tech world’s imagination. Early in 2022, a Stanford class on the state of Gen AI and AI was enough to convince us of the potential of this platform shift. What is striking about the acceleration of AI is that it has hit all the world simultaneously. Unlike the Internet – where Latin America lagged behind in broadband infrastructure or smartphone penetration that took years longer to catch up – the same LLMs are available to founders and consumers in San Francisco, CDMX, Shanghai, São Paulo, Tel Aviv and Buenos Aires.

Entrepreneurs around the world are reimagining the future at the same time. In Cancun, Andrea Campos, founder of Yana, the leading mental health app for Spanish speakers, is already deploying the second iteration of its chatbot with LLM, after a successful launch of Yana AI. Gen AI tools allowed her to launch an English version in weeks to expand to more countries and soon globally. In Santiago, Fintual released the first financial advisor co-pilot of its kind – powered by eight different agents – to help Latin Americans make better investment decisions. In CDMX, Senzai is building the most sophisticated suite of ML and Gen AI products to help large corporates communicate with their clients.

You’ve been investing in Spanish-speaking Latin America for over a decade. How has your investment thesis changed since then?

Our investment thesis has evolved in two ways:

The first big change is that we are more focused on technology and product than ever. A more sophisticated entrepreneurial ecosystem has allowed us to move from technology enabled models to more scalable software startups, from founders with business backgrounds to world class technical teams and from copycats to local innovation with global potential.

The second evolution is related to our geographic focus. Hi Ventures I focused entirely in Mexican startups; Hi Ventures II expanded to Spanish speaking Latin America, particularly Chile, Colombia and Argentina; starting from Hi Ventures III, we have included Brazil for a full regional scope. Today, as we deploy Hi Ventures IV, we are excited about the global potential of some Latin American startups.

What has remained constant after all these years investing is our belief in Latin American ingenuity and grit to solve humanity’s biggest challenges.

Talent and infrastructure powering AI have proven to be very expensive for tech companies to acquire. How should early stage startups think about allocating resources into this new AI wave?

This technology shift happened after the world realized you could work from everywhere in the world. The pandemic made talent global, shattering the traditional bottlenecks technology companies  faced when scaling in Latin America. It is not rare for Latin American teams to have pools of talents working from Eastern Europe or India. Moreover, the fact that more Latin Americans are being trained remotely in the best technology companies in the world has accelerated the sophistication of local talent.

Before the pandemic, both talent and capital were scarce. No longer. Today, Latin American talent is better prepared and a global pool of engineers is available to all startups. As for capital, while it’s still scarce, AI allows startups to be super efficient. Engineers work better and faster with co-pilot helping them code, test and debug faster than ever.

From recent conversations, how are LPs thinking about AI when considering increasing their exposure in the region?

The 2022 market correction contracted multiples of public and private companies across the board. As the market rebounded last year, multiples expanded unequally. The markets recognized the potential of AI to create value for shareholders with stocks like NVIDIA, Microsoft and Meta soaring. On average, public companies with AI as a core technology or strategy command a 2.5x larger revenue multiple than companies without a clear AI edge.

LPs exposed to the public market have seen this performance in their portfolios. Exposing capital to AI in private markets and particularly early stage VC seems only natural. More, AI adoption in the region has enormous alpha potential for investors.

Walk us through some of your recent deals. Did AI play a decisive role in you gaining conviction behind the opportunity?

AI and Gen AI make products faster and cheaper by 1-2x. AI helps startups build super efficient organizations with outsized impact. We only back AI-first startups with Hi Ventures IV. Our first investments, Senzai, Shinkansen and Atlas were born in a post LLM era with a huge advantage in speed and efficiency. Senzai is an AI-as-a-product startup that helps banks, retailers and telcos structure data and build marketing experiments at scale. Shinkansen leverages AI to build regional financial rails for fast and cheap payments in Spanish speaking Latin America. Atlas uses AI to manage a benefits platform for a global remote workforce.

We are looking for AI startups across the region on a mission to solve the world’s hardest problems with human innovation.

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