Talent, infrastructure, technology adoption, and digital connectivity. This seems to be the formula that has positioned Latin America as one of the leading regions with an entrepreneurial spirit in recent years. The results are clear: it’s one of the world’s most powerful ecosystems, with more than 30 unicorn companies.
Although the pandemic put a halt in the early months of 2020, investments have already resumed and regional expansion appears as the next step in every startup’s growth strategy.
To Latin America and beyond
Now, international expansion is a complex process that requires in-depth research to make better business decisions. Growing beyond the company’s home country can have disadvantages. However, if done correctly, international expansion into Latin America can offer market opportunities that leverage widespread digital adoption, growing human capital, and a thriving ecosystem of partners and allies.
A recent Endeavor study—in collaboration with Google, Mastercard Global, General Atlantic, and 2001 Nobel Prize winner Michael Spence—provides relevant insights and lessons learned from successful international expansions by companies based in Argentina, Brazil, Chile, Colombia, Mexico, and Peru.
Here we summarize the main findings:
- Fintech (41%), E-Commerce (21%), and Transport/Mobility/Logistics (10%) attract the most investment capital in the region. 46% of the companies that have expanded create software, and those that develop software or services for other businesses tend to grow faster than those that design products for consumers.
- Mexico is the main market where companies take their first step to expand due to its population size and growth potential toward the U.S. and the rest of the region. Of the 271 companies identified for the report, 145 expanded to this country.
- Hiring talent that fits the necessary skills and aligns with the mission and culture is one of the main challenges. Finding qualified employees in other countries is challenging when you don’t know the local idiosyncrasies. In this sense, the three strategic allies in the destination market are recruitment consultants, specialized lawyers, and local venture capital firms.
- International expansion is usually carried out through country managers or the company founders themselves. While there are no set recipes, Endeavor’s survey found that 55% chose to hire a country manager as the leader of the expansion.
Alliances and solutions that make a difference
Taking the international leap is essential not only because it diversifies risk and expands market opportunities, but also because it improves competitiveness. But navigating the particularities of each market can be challenging.
To guide you on this path, there are tools you can turn to. For example, in the Endeavor report, you’ll find precise data for each country and a decision-making flowchart organized through key questions and expert advice.
Google’s Market Finder is another solution you can use to check if your target market has the right infrastructure to support your business model. It allows companies of all sizes and sectors to discover useful operational information to start selling products globally, tailored to local needs. The tool offers specific information, such as users’ preferred payment methods in each market, and how this impacts sales and conversions.
Taking the international leap is essential not only because it diversifies risk and expands market opportunities, but also because it improves competitiveness.
You also have Partner Marketing Hub, which provides resources, ideas, and personalized solutions to help you create a marketing strategy that sets you apart.
Expansion means asking yourself multiple questions: Do I have a clear motivation? Do I have the business capacity to carry out this expansion? Do I know my target market well? Does my company adapt to that market? The lessons and experience of companies that have successfully crossed borders, along with the right tools, are a good roadmap for taking the first steps toward international growth.
