10 trends for Latin American startups in 2021

Mental Health, Remote Work, No-Code — watch out 10 rising trends from the startup's landscape that should shape Latin America in 2021.

Watching from Swiss Mountains to  Latin America, what are the trends & influences that will rise in the Startup’s Scene.
Watching from Swiss Mountains towards Latin America Startups Scene 2021

Hola 2021!

2020 has been quite an intense journey. Tough moments come with great takeaways and self-development opportunities. In 2020, I learned a lot. Looking ahead, I have been thinking about what trends and values will shape this new year. Shaping is building. The entrepreneurs and their teams of hungry achievers will be among the key players of 2021. So what would the startup playground look like?

1. Loneliness

Social distancing and lockdown have increased the feeling of loneliness. Senior people, the youth, parents, single people — we are all concerned.

For instance, we need solutions to help the elderly reconnect with society and to feel included, such as goodnightzoom, storytime between kids and isolated seniors.

Teenagers & the youth will look for new ways to connect at a distance. Proof of this is Snap and TikTok, 2 of the most used apps from the generation below 22 years old, and they have both registered unprecedented growth. Snap’s daily users grew 18% to 249M (compare to 15% growth in 2019), while TikTok was the most downloaded app in 2020.

Single people will need to find out how to meet new people in an era where the usual opportunities to go out to events, mingling after work or taking gym classes are rare. Dating Apps should continue to grow their user base. And what if we see a growing self-partner community — represented by its icon Emma Watson — with people understanding they don’t need to be in a couple or married to be happy and accomplished?

Community support will rise. Individuals are looking for ways to help others overcome the pandemic’s difficulties. Senior Groceries Initiative, People in Need Food Distribution platforms, Support Chat for the Youth, Parents Social Media Group, etc are some examples.

2. Diversity & inclusion

While many surveys show that Diversity & Inclusion bring positive financial & creative outcomes at work, we are still lagging behind. Less than 7% of CEOs from Fortune 500 companies are women. Looking at Venture Capital, in the US, between 2015 and 2020, only 2.4% of funding went to black & Latinx founders.

Not only companies but also society, in general, should urgently look for solutions to better embrace Diversity & inclusion. Black Lives Matter (#BLM), #MeToo are two examples of rising voices against discrimination.

The road toward Diversity and Inclusion is still long. While the topic has for long been seen more as a marketing tool, I believe in 2021 we will see an impressive amount of solutions focused on implementing better D&I standards. Google & Apple have their own non-binary emojis.

The coding community has released a guide for inclusive languages.

Nubank, the largest digital bank of Latam, committed to implement Diversity & Inclusion KPIs as part of their OKRs as a company taking action after being accused of discrimination in relation with comments made by one of its founders.

3. New Education

The Traditional Education model showed its limits to the world in 2020. The education sector is under tremendous turbulence (and this is great). This should make a place for a new learning paradigm. With it’s 24/7 online effective education platform,

Platzi has been one of the pioneers of new education in Latin America. By providing online effective education to teach digital skills, they have over 1.5 million students.

Last year, we have seen an increase of tech startups in the region providing solutions to improve K-12 schooling (Prendea), to facilitate school and college administration (Blended) or leveraging new teaching channel (LaTeacher).

College & Universities alternatives educating the new generation of digital talents such as Holberton School, Henry, Laboratoria or the advanced software engineering program of Platzi are addressing the talent shortage in software engineering. In 2018 over one million jobs remain vacant in Latin America digital economy markets, while the United States is currently needing near half-million jobs in the region. On the side, accelerators are educating new waves of high impact entrepreneurs. In the past 6 years, Seedstars, the education platform & investment fund for startups in emerging markets has supported over 30'000 entrepreneurs in emerging markets, with initiatives in 12+ Latin American & Caribbean countries.

More and more tech companies provide their own Academy to teach how to use their product as well as what to build with it (Figma, Airtable, Hubspot), etc. In 2021 Learning will be everywhere and this is particularly urgent for the LATAM region.

According to a recent report from the IDB, 1.2 million kids will be excluded from the traditional education system and an additional 2.7 million young adults will neither be working nor studying as a consequence of the pandemic. Only 13% of Latin American have access to universities which left behind 87% talents, that’s the opportunity for edtech.

4. Ecommerce & Delivery

E-Commerce sales grew 36.7% in 2020 to $84.95 billion, which made Latin America the fastest-growing region in the world. E-commerce has been growing exponentially the past 10 years and this will continue in 2021.

We need solutions to facilitate online payments considering less than 20% of Latin America population has a credit card according to World Bank. Online E-commerce should be simple, fast and generate trust. Augmented reality services, Live Streaming allowing users to see their food being cooked or clothes produced are new technologies that could improve the E-Commerce experience.

E-commerce in many cases also means logistics and delivery. No doubt there will be billions of USD opportunities in the logistics segment.

5. Remote Work

In 2020, Facebook, Google, Twitter, Platzi announced they will be remote companies. Remote work should continue to rise this year.

While it comes with many benefits, it implies a great preparation and commitment to make it work. How to onboard & train talents? How to preserve and scale culture? Can we replicate team-coffee-machine-chat?

This implies to reimagine the future of workspace. Will coworking still be part of the game? I trust yes, but differently. How do you provide a good workspace at home for your team and preserve their well-being & efficiency?

We will see new startup models tackling the opportunities behind remote work. Platforms offering ergonomic furniture to purchase or rent — take a look at IMovR. Web apps to help build team boundaries, engagement and motivation such as Donut. The whole perks and benefits plan should change as well. And finally, of course, there is a need for solutions that facilitate the recruiting and contracting process of talents all around the world like OnTop.ai (Latin America) or Deel (US)

6. Mental Health

The pandemic has been psychologically draining for a larger part of the population. Among others, a survey done by UNICEF is having a significant impact on adolescent and young people in Latin America.

Platforms to connect individuals to psychologists such as Terapify, App for Mental Wellbeing (meditation, mindfulness, physical exercises, etc) like Calm or solutions to access Medicine that can help to improve mental health such as acupuncture, reflexology or hypnoses are needed.

People will be looking for solutions that will alleviate their stress and anxiety.

7. Financial Inclusion & Safety

Fintechs in collaboration with government helped the underserved, and vulnerable populations achieve financial security in the wake of the first global pandemic of the digital age. According to Mastercard, approximately 40 million people across Latin America have become banked between June and October 2020.

From buying online to transferring money safely, accessing credits/ savings opportunities, fintech is an absolute necessity to ensure economic’s recovery in Latin America.

More people will work from another country than the company they are employed, which means the demand for solutions to transfer salary, reduce currency change risks, or manage expenses internationally will grow.

Millennials and Generation Z are also more conscious of their spending and are looking for new ways to invest. 86% of Millennials are interested in impact investing, while 72% of Gen Z believe responsible investment can improve sustainability outcomes. They focus not only on financial returns but also on impact. Therefore, financial education solutions, investment apps and platforms should gain attention. We might see more Apps or Platforms allowing financial donation for good causes (see Ribon in Brazil or Merkit in Colombia) or stipends for gig workers such as Uber proposed in different countries.

Finally, after Bitcoin hit a record USD 30K value on January 2nd, let’s see what Crypto reserves for us in 2021.

8. Sustainability

Behind the pandemic, there are other wars to keep top of mind and climate change is without a doubt one of the biggest challenges of our time. Remember 2020 started with fires in Australia? Well if there is one positive outcome of the global pandemic is the reduction of pollution around the world.

In LatAm, Pachama, a carbon credit marketplace raised 9 million USD, Sunai got near half-million dollars grant from the Chilean government to expand its SaaS Service that optimizes solar plants energy production.

Recycling tech startup such as Eatcloud could reduce the waste of materials & food in the region, where no country exceeds 15 per cent of recycled material. Those solutions should also be designed to improve lives condition of the approximate 4 million people who live out of recycling.

E-waste, Reusable or biodegradable packaging, sustainable logistics models such as the “Milkman Model” as well as green architecture, energy or transportation are some examples of how technology and entrepreneurship can bring positive sustainability impact.

9. Prosumerism

Individuals are no longer looking to only consume, they want to create, produce, build by themselves. TikTok lets its users create their own video and distribute them easily. Teachable gives any teacher the possibility to produce & release courses at scale. Instagram democratized access to photography and picture galleries.

In 2021, more individuals want to create by themselves, with little barriers to entry. They look for solutions that simplify their life, but look to be more than the consumer. The “Makers” movement is on the rise.

At this matter, No-Code & Low Code should be booming movements and rising startup sectors of the year. Low-code application platforms should account for 65 percent of all by 2024, according to Gartner’s report.

10. Gig Workers

Gig Workers refers to individuals contracted by (and not employed) organizations to execute a given service usually for a short term period.

Rappi, Uber, Cabify, Zolvers have created income opportunities for millions of Latin American workers, such as migrants or refugees from Venezuela, Nicaragua or other lower-income regions of the world.

Gig Workers also includes freelancers, a market that grew exponentially as a result of the lockdown and job losses in 2020.

One of the advantages of the Gig economy is the low and cheap entry barriers to the labour market. In a couple of hours, you can become a Rappi tendero. You just need to register and get a bike (not even a car). For freelancers, platforms such as Workana, UpWork, Freelancer give you access to hundreds of job opportunities in a minute after creating your profile for free.

Technology has transformed the Gig Economy in a market that is predicted to reach 347.8 billion USD in 2021. Entrepreneurs should tap into it.

There is still a lot to do when it comes to providing Gig Workers with better conditions in terms of earnings, development or social benefits.

Other Trends

Other trends to look at closely are health solutions to make it easier to manage the pandemic (biometric health, temperature tracking, robotic nurse), COVID-19 Friendly fashion & design (seamless mask, design for distance signage, Sanitizer bottle) and new forms of entertainment at home (streaming concert & events, fitness in house, augmented reality applied to entertainment, etc.)

Most of those trends are also urgent needs to transform Latin America. They will be triggered by increasing internet penetration and mobile phone penetration. Latin America is the world leader in mobile adoption, with 67% of the population who had a mobile phone in 2018. The majority of devices are smartphone which accounted for 66% of all internet connection that year and a share expected to increase to near 80% by 2025.

Driving Influences

In 2021, those trends will be driven by different values, among the strongest should be:

  • Community & Tribe 🙌🏾 — need to belong to & support your peers.
  • Simplicity ☺︎ — ease of use, ease to make and time efficiency.
  • (Co-)Creation & Collaboration🛠— exploration of inner creativity & collaboration between brands.
  • Personalization 👤 — ask for tailor-made, uniqueness, buy what you need.
  • Nature 🍃 — the quest for natural products, environmental friendly, planet preservation.
  • Safety☂️ — the feeling of security, respect of sanitary measure, data & identity protection.

Last but not least, keep in mind that Data is the new fuel. So how do you collect, analyse and make the most of the data (always acting with the integrity of course)

So what?

We are at the earliest days of this new year and therefore it’s still that crucial time for all founders & their individual talents to think and ask themselves:

  • What will be the tendencies and driving forces of the coming year?
  • Which of those are you well-positioned to embrace? Where are we good at?
  • Which can be a threat if we don’t adapt?
  • As a leader, how do I support my team to excel without burning out?
  • As an individual, what is my contribution to move the needle? What do I need to learn to get there?

Let the year begin!

Digital Nomad from Switzerland working with tech entrepreneurs in Latin America