The commitment to Latin America that travels to European startups has as a common denominator that the region offers an immature ecosystem in many aspects, but that is why it is visualized that “everything is to be done”.
“Market in constant growth”. “Opportunities.” “Perspectives to grow”. “Ecosystems in development”. The phrases are repeated when the referents of European startups are asked to explain why they are increasingly looking at Latin America.
The commitment to Latin America that travels to European startups has as a common denominator that the region offers an immature ecosystem in many aspects, but that is why it is visualized that “everything is to be done”.
The essence of startups
The essence of startups, which is connected with a founding principle of entrepreneurship, is that before selling this or that product, what you have to ask yourself is what problem I solve with my development. In that context, Latin America, due to its particular history of economic instability and institutional weakness as its brand in the selvedge, shows, in essence, problematic and challenging societies for incubators in search of dealing with problems that nobody addressed before with decision.
If it’s problems, just put yourself in the shoes of someone looking for a ticket to attend your favorite band’s show to find out what it feels like. Endless queues in front of a window that is seen with a long view when you still have the hope of getting the ticket at the official price, or the adventures of those who have no alternative but to go to resale, when the tickets sold out, with the risks This implies for your safety, and also for the reseller that does not integrate any dishonest marketing network.
How does the exchange work?
Therefore, the exchange of tickets between users revolutionized the resale on the Internet, as one of the derivatives of the more general phenomenon of replacing the official sale of tickets in the window with online transactions. These platforms, organized and insured by renowned companies, were transformed into a solution for which you cannot attend the show for which you bought your ticket and also do not want to lose the money you paid, which in turn connects with those who did not reach Time to get the ticket and look for it eagerly. These solutions enabled that, beyond chance, resale can be an absolutely legal business in itself, since when it comes to concerts or highly sought-after events, with top-level artists, an entry can leave you an excellent profit margin to the reseller.
StubHub, born in Madrid as Ticketbis and renowned after being bought by eBay, saw in this whole panorama an opportunity and that is why it already has its own structure in Argentina, Mexico and Brazil, as part of its presence in more than 40 countries. In fact, the purchase of Ticketbis was a possibility for eBay to grow in the region as an international digital ticket sales platform.
In StubHub they aspire, in the path of the evolution of the ticketing industry, that the official sales and resale channels are going to unify in the region, as it has been for years in the United States with the Super Bowl or the NBA.
The EdTech explode
Lingokids, the interactive English learning app that teaches children the language through activities, videos, games and songs, also has European origins, specifically in Madrid, Spain. It is in 180 countries and landed in Argentina and the region last year, and plans to deepen its presence in Latin America in 2019.
Lingokids is a clear example of strategic commitment to the region
“Latin America represents a strategic market for Lingokids because of its sociocultural characteristics. A significant part of the Latin American countries have great influence of the United States, due to its proximity, such as Mexico and some of the Central American nations, but a large part of its population suffers from a lack of quality and economic means to learn the language . In Argentina, in particular, this is combined with a very strong tradition of prestigious institutions that teach English, with which strategic alliances are raised, but where recent economic problems have resented family budgets for children to study. With Lingokids we believe that we can greatly reduce the cost of access to quality English teaching for Argentines and Latin Americans”, said Cristóbal Viedma, co-founder and CEO of the firm.
“The concept of entrepreneur was almost unknown at the beginning of the nineties of the last century in most of the countries of Latin America and the Caribbean. The term was associated with those people who had lost their jobs and who, while finding another, they opted for the alternative of setting up a small business. But this idea was transformed once the new millennium began”, says Susana García-Robles, head of financial operations of the Multilateral Investment Fund (MIF), the innovation laboratory of the Inter-American Bank group of Development (IDB). The expert of the multilateral agency – cited in another BBVA work, points out that “in the mid-2000s, terms such as innovation, angel investor, entrepreneur and venture capital gradually ceased to be considered elitist concepts and began to be understood as imperative concepts for economic growth”.
More cases
Another case is that of the French Charles Carette, Rémi Beaufils and Timothée Jauffret, co-founders of Bambox. They met in Argentina and were inspired by the experiences of their Argentine friends with young children to launch the platform. “We observed that the purchase of products for the baby was a considerable part of the budget of the families but also that it was something that occupied a non-negligible time, especially if the need for savings forced to compare prices for purchases that do not expect and that to Sometimes they have to be specified at unusual times, ”they explained.
“It is true, the notion of problem to be solved is inextricably linked to the daily experience of developing countries and that is fertile ground for the entrepreneur,” said Carette, who also added that the existence of skilled labor for the technology sector (programmers, designers, video editors) is another point in favor of, in this case, Argentina, so that foreign startups are installed ”. According to Beaufils it is something that never ceases to be commented on the events and rounds of old-world business when the country is mentioned. “They highlight that”, he stressed.
Another of the landings to highlight is the founders of Trideo
Two French and one Belgian settled in Argentina to devote themselves to manufacturing and services for 3D printing and as the beginnings tell, they were not rosy.
“With an initial investment of US $ 15,000, we were surviving, in every way, that is, from eating, moving, paying the rent, researching and buying the materials for the first2 machines until the first sale was finalized 9 months later. An odysseyre”, calls Nicolás Berenfeld (Belgian).
Neither Laurent Rodriguez (French) nor Nicolás arrived in Argentina with a very defined plan. The first to arrive was Nicolás, who, from his native Brussels, had received from the Solvay Business School with the title of Management Engineer.
Nicolás is 35 years old and has been in Buenos Aires for 9 years in which he was putting together different ventures in other areas. Laurent, meanwhile, is 31 and arrived six years ago. Laurent graduated from the National School of Engineering of France, in 2011, with a Master’s degree in Industrial Engineering. He worked in different countries, first for Airbus subcontractors in France and then as International Project manager for Saint-Gobain in India. His relationship with 3D printing took shape during his experience at an Argentine startup in 2013, where “I was fascinated by this technology and all the possibilities it offers”.
They joined, some time later, Simon Gabriac, also French and childhood friend of Laurent, who summoned him with a couple of calls and the offer of a challenge to start from scratch with the project.
Simon was not, precisely, unoccupied; Also an engineer, with a specialization in Mechanics, had more than 3 years of work experience in the field of aeronautics, in heavy industry weights such as Airbus and Dassault Aviation. In fact, Simon participated in the assembly of the first own model, the “PrintBox” while still in France.
They reinvented themselves again and again
Today they plan to open, before the end of the year, a manufacturing center in San Pablo, Brazil, for which they plan to invest about US $ 100,000.
Thanks to its team of multidisciplinary engineers, Trideo offers consulting services in 3D printing to facilitate and accelerate its implementation in the industry. “Our goal is to reduce the time and cost in engineering, manufacturing and maintenance processes, focusing on where 3D Printing can make a difference”, they summon from their website where the idea a fundamental force that guides them is “There is no problems, only solutions”.
Just review the brief but intense history of Trideo to know that these Europeans in their thirties, lovers of the challenges and lovers of Buenos Aires, know what they are talking about.
The challenges presented by the region
The relationship between European startups and Latin America recognizes causes that go back to cultural identities and business traditions that, verified in other more traditional segments, are transferred to empiricism. “A Frenchman in Buenos Aires feels very much at home”, admits Jauffret de Bambox, who says that his Spanish and Italian friends have the same perception. “It is the continuity, under new formats, of a tradition of European business in the region that is long-standing”, he says.
Precisely from Spain comes a significant part of the European startups that are installed in the region, a reality that was anticipated as one of the main conclusions of the IV Startup Internationalization Report made by IE BUSINESS SHOOL with the support of Lufthansa and Casamerica. The report revealed that half of the Spanish technology start-ups will have offices in Mexico, Colombia, USA, Chile, Argentina or Portugal in the next 18 months.
The same research paper indicates that 64% of Spanish technology-based start-ups already hire professionals in Latin America. “Regarding its staff, most of them already have freelancers, collaborators or employees abroad, within their international growth procedure, mainly in Europe (78%) and Latin America (64%)”, he adds.
The report also shows that investing in Latin America is not a walk. “As for the main problems to develop their business in Latin America, 57% say that the market is not mature, while 24% say that Internet connections are slow. The regional advantage is that competition is not so strong , just the opposite of in Europe and the US”, he explains.
A World Bank study also showed that companies in the region were 20% less likely to introduce a new product than in countries with similar incomes in Europe and Central Asia.
In this way, from Spain, France, Belgium and other European countries, they continue to see in Latin America a fertile and attractive terrain to develop and create new businesses.
Also published on Medium.