Is Latin America on the list for the creation of the decacorns?
The term decacorn evolves from the term unicorn when it was rare to see companies with valuations of a billion dollars or more, but that became more common due to the digital transformation that all industries around the world are having and now, in the pandemic and on All last year we saw an explosion of unicorns and in Latin America, which I think is the beginning and we are definitely going to have decacorns, which is when it goes from being a unicorn with valuations of one billion and up to valuations of more than 10 billion dollars. onwards”.
The recognized case in Latam that achieved the most successful decacorn now has been Nubank, which was listed on the stock market a few months ago, but it is not the only one, we also have Mercado Libre, which are also interesting cases where they become decacorns, they are even one of the most important in the world. only in Latam and I think that until now it is starting.
Why do you think there are so few?
There are few because it is the beginning, you are going to see more, while in the United States we saw how the most valuable companies went from being energy companies, financial services companies and those types of companies to being technology companies, we began to see that a long time ago 10 years. In Latin America until now, that transformation begins.
So I believe that in 10 years, if we have this conversation again, the top companies in each country in Latin America will no longer be the energy, oil or financial services companies, the traditional ones that have enjoyed a monopoly/oligopoly for decades. , but we are going to see that those most valuable companies are going to be those that were born as technology companies in recent years and that have not yet been born and those are going to be the most valuable companies and the reason why that is going to happen It is because if we were already coming with the digital transformation of the industries and the economy in Latin America, the pandemic accelerated it with the quarantines and everything suddenly becoming remote, those same companies that had been leading for decades found it extremely difficult to adapt quickly enough to be able to maintain their position, on the other hand, startups or those companies that start small and are born technological from the first day take advantage of that opportunity and begin to integrate into the market quickly.
This year we began to see that industries that had traditionally been left untouched, such as construction and agriculture, now have startups that are growing exponentially in areas as traditional as construction, and this is also due to the digital acceleration due to the pandemic.
The importance of product development to become a decacorn
There is a super important part in the field of marketing that is the correct segmentation and the correct segmentation is to start with the initial market that already has a behavior buying cars, construction materials buying in stores and when a new technology company arrives what What he does is find that user and that market that already exists, that is already behaving suddenly in a non-optimal way and creates a technological product for that market that already has a behavior.
That is the initial key to arrive at a concept that is called the fit between the product and the market because when you have a fit between the product and the market you are going to grow exponentially and those technology companies grow exponentially because their competitive advantage is the technology. So when the entrepreneur and the startup focus on the right market, in that segmentation from the beginning, they will be able to have that trajectory to become unicorns and then decacorns.
acceleration process
Part of the acceleration is raising capital, hiring people, but the most important key is achieving that fit between product and market and that is why we have a network of mentors and team members to help entrepreneurs get there and also what we are looking for. from Techstars and especially in Latin America is to open access to capital and open access to experts and networks that most entrepreneurs and talent in Latin America do not have access to, if we really are going through a digital revolution and it is rewriting the economy It’s not going to be enough for the same people as always to exploit this digital revolution, it’s time to be more inclusive and there is a large group of people who are entrepreneurs who suddenly didn’t go to the right high school, to the right university they don’t come from the universities elites, but if they have the capacity, they have talent and they know this market that is going to have to transform its consumption to digital, then we From testing we invest in them, we make them raise more capital and we take them to that fit between product and market faster so that they can be unicorns and decacorns in Latin America.
Technology, Equity Investment and Mentoring and the Market
And as for the capital part, in Latin America, we are seeing that more funds from the United States and around the world are investing in companies and markets in Latin America. In 2021 there was three times more capital than in any previous year for technology companies in the region and much of that capital comes from outside. So the market opportunity is there.
Does Latin America have the right scenario for the development of decacorns?
I believe that, above all, due to the capital increase in the region, it has been super important, but it is not enough to depend on the few funds that there are today locally, it is time to touch on ways to expand the funds that exist above all for the very early stages and it is also important to create a more inclusive and more equitable economy to focus on giving that opportunity to entrepreneurs who historically have not received that capital, specifically minority women. When we look at the data on Venture Capital in the world, we see that in the United States less than 2 percent of Venture Capital goes to minorities and much less to minority women, and when we look at Latinas it is even smaller.
Companies must take risks
Identify a problem in the market where this behavior already exists and when you innovate it is done by creating a company that is born digital, born technological from the first day to attack that market and, if you focus on the correct segment at the beginning, you will be able to have that retention and expansion of clients and use that leads you to have an exponential growth that results in creating a unicorn and then un decacorn.
I believe that the time for startups and technology innovation in Latin America is just beginning. There is a lot of surprise for all the capital there is, there are conversations if there is too much capital if the valuations are very high, but the reality is that in Latin America the opportunity is so great that we are going to see in 10 years the most valuable companies in all of Latin America to be of technology and are being created today.
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