By Carlos Moreira
To find the best new market for your mediatech company, you just have to head south—to Latin America. In the past five years, VC activity in Latin America has exploded. The area is now home to a stable of 23 unicorns, including digital banking provider Nubank and online food delivery platform Rappi. Last year alone, the region tallied $4 billion in deals for the second year in a row and closed a record 488 deals, while its startup exits netted an eye-popping $11 billion.
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So Latin America has an impressive group of highly valued homegrown startups—but that’s not all it’s known for. When foreign companies expand to Latin America, they too have seen their growth in the region soar, sometimes even outpacing their growth at home. Mediatech in particular is having a moment in Latin America as internet and mobile phone usage skyrocket. There’s never been a better time for media and advertising innovators to enter the market.
High growth in a less-developed ecosystem: One company that made the leap to Latin America is Silicon Valley-based short video startup Firework, which partnered with Brazilian media giant Globo as part of the newly launched Globo Partner Program. In just six months, Firework’s Latin American user base increased 50x.
After expanding to Latin America last year, Firework, which has been developing a solution for decentralized short video distribution on the open web, has expanded its global reach to 250 million people per month, making it the largest decentralized short-video platform. Latin America now accounts for 10 percent of Firework’s global traffic.
And Firework’s success is hardly an outlier. In fact, it’s a case study in why startups and VCs—especially those in the mediatech space—need to seize Latin America’s market moment.
A testbed of plugged-in early adopters: Latin America’s 660 million-plus residents have proven themselves early adopters of new technology—particularly within the digital media and advertising space—as internet and mobile phone usage reach new highs. Brazil, Mexico and Argentina are among the highest-ranked markets worldwide for total hours per week spent on the internet, much of it on mobile devices.
There’s also the potential for emerging opportunities to engage with Latin American users online. In May 2020, Visa announced that 13 million cardholders in Latin America and the Caribbean made their first ever online purchases.
Low-risk, high-reward investment opportunity: The current exchange rate between the U.S. dollar and the Brazilian real means that it’s less costly to invest and develop in Brazil than it’s ever been before. Brazilians connected to the internet and spending over nine hours a day online is at 70 percent—the highest globally. Most Brazilians, 89 percent, have a mobile phone and 71 percent own a smartphone.
What’s unique about Latin America’s digital advertising and media landscape is that it’s concentrated in a few select media channels and networks: Globo in Brazil, Televisa in Mexico, and Clarín in Argentina. By partnering with one of these major media players, early-stage startups have a huge advantage in terms of building their audience and market in Latin America.
Too often, early-stage startups are so focused on growing their domestic user base that they overlook opportunities to expand internationally, especially in emerging markets like Latin America. But the time for mediatech companies to set their sights on this important and growing region is now.
Carlos Moreira is the head of Latin American mediatech company Globo’s newly launched Globo Partner Program in Silicon Valley. A lifelong media entrepreneur, Moreira co-founded Esporte Interativo, Brazil’s first national television network dedicated to live sports, which was acquired by WarnerMedia. He then oversaw the global media partnerships team at Twitter. In his current role, Moreira helps media and tech companies expand into the Latin American market by partnering with Globo.
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