The attention of business and technology in Latin America almost always looks north to the U.S. The more sophisticated Latin American VCs and entrepreneurs take the world’s other great markets into consideration when thinking of where to scale, seek out investment, or talent — namely, Europe, China, India, and Japan.
There’s nothing inherently wrong with this: The U.S. and Europe made up 75% of foreign direct investment in Latin America in 2020, so, in many respects, if it ain’t broke, don’t fix it. But, beyond sheer size, it is interesting to see the recent trends of Afro-Latin American tech interchange. Though Africa has a comparatively tiny footprint in Latin American tech, and vice versa, its recent growth has been of particular note.
In the past month, a South African-owned holding company acquired Brazil’s largest last-mile delivery company, iFood, turning it into Latin America’s most valuable last-mile delivery company, edging out Rappi from that coveted position.
Meanwhile, Africhange, a remittance company focused on getting remittances from Canada to Nigeria, allied with Latin America’s largest crypto exchange, Bitso, to facilitate crypto remittances from Canada to Mexico.
Beyond this increased exchange of capital, equity, and expertise, the evolving relationship between these two overlooked regions is also striking.
Latin America has long been a staging ground for companies around the world to test out their products before moving wholesale to the true prize: the U.S. market. Back in 2020, I wrote about how Safi, a Kenyan Internet of Things startup, scaled from Nairobi to Mexico’s industrial powerhouse, Monterrey, to test their factory AI out on bigger clients before looking across the Río
Grande Bravo. But, as Rest of World has reported, Latin America has also become an end in itself. As founders, investors, and talent from across the two oceans that surround the region, land to set up shop and stay.
So, why would an African startup or investor look to Latin America? For starters, there are often similarities between parts of these markets. For instance, Guatemalan founders working on social tech, like solar panel and rural internet connectivity startup Kingo, told me that they worry much more about their African competitors than any in the U.S. or Europe.
Another reason to link the African and Latin American tech markets is simply to fill an obvious vacuum. In 2018, Huawei saw a clear opportunity and seized it when it completed the South Atlantic Inter Link (SAIL) submarine cable system between Brazil and Cameroon.
The numbers are still tiny. The case studies are incipient. But the trend points toward speeding growth and opportunity.