The bee orchid is a wonderful sneak. This flower pretends to be a good-looking insect to trick the real thing into trying to copulate with it and inadvertently spread its pollen. It reminds me of companies that present themselves as tech startups even though they clearly are not — and even though they’re receiving lots of funding from tech VCs.
Consider Mexico’s Gaia. Walk into the company’s swanky showrooms in the upscale Roma Norte neighborhood, and you get the feeling that this designer furniture company is closer to Ikea than MercadoLibre. Yet, late last year, Gaia got $50 million from tech investment giant SoftBank and is talked about in the media as a tech startup.
Thing is, back when it was founded in the mid-2010s, the company arguably was a technology startup. The physical shops came later, but Gaia really was a cutting-edge e-commerce play, including delivery, logistics and online retail in an age when Mexicans didn’t really shop on the internet.
One global pandemic later, and even the oldest companies can lay claim to the mantle of e-commerce. Our new normality has made companies like Gaia newly normal. Ultimately then, this is a story of convergence. On one end of the equation, every company is increasingly becoming a tech company. Low-tech bakeries and cement manufacturers are pumping money into tech, from digital payments platforms to AI.
One the other end of the calculation are VCs from Silicon Valley to São Paulo, Africa to Argentina, staring a looming bear market in the face. With less cash to throw around, they are facing an interesting fork in the road: Will they think twice about investing in companies that are no longer pushing the technological envelope? Or will they double down and finance the consolidation of Latin America’s slowly by surely tech-adopting market? It seems like the answer, boringly enough, is probably a bit of both.
Nonetheless, “What even is a tech startup anymore?” is an enticingly difficult question to answer. Is Panama’s Selina a tech company because it caters mainly to digital nomads, or is it actually just a coworking/hotel chain? Is the backing of important local and international tech VCs enough for an e-commerce like Mexican eyewear startup Ben & Frank? As digital technologies go from new and exciting to normal and common, what will our definition of “tech” become? When will the time come for investors (and the media) to wake up and smell the bee orchids?