Which Countries Are Most Likely to Produce Latin America’s Next Unicorns?

A report by Endeavor, Google, Mastercard and General Atlantic identifies three countries as the region’s most fertile for the emergence of unicorns

Mexico, Brazil ad Colombia are the three countries in the region with the most favorable conditions to nurture unicorns, according to a report by Endeavor, Google, Mastercard and General Atlantic
April 06, 2022 | 03:15 PM

Bogotá — The most favorable countries for the emergence of unicorns in Latin America are Mexico, Brazil and Colombia, in that order, according to a recent report by Endeavor, Google, Mastercard and General Atlantic.

The report’s aim is to orient and support entrepreneurs and companies planning to expand into the six main markets in the region: Argentina, Brazil, Chile, Colombia, Mexico and Peru.

In analyzing data and trends, of the more than 3,500 companies that have already expanded internationally, technology-based companies founded in the last decade that have raised capital or have scaled to more than 50 employees were filtered, leaving a sample of 271 companies from which the data was compiled.

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One of the report’s main findings is that the investment received in 2021 alone by these companies totaled $16 billion, and which represents 43% of the historical venture capital investment capital in Latin America over the last 10 years.


In addition, the study found that more than 80% of Latin America’s unicorns have already expanded into the international market.

According to the report, the three main strategic partners in expansion markets are headhunting firms, specialized law firms and local venture capital firms, with the main obstacles being the lack of local talent specialized in technology and the adaptation of the team and the business model to new cultures.

In addition, the characteristics of Argentina, Chile and Peru were analyzed in-depth, indicating in each case the degree of difficulty or advantage that each market presents for new companies seeking to expand, measured by indicators such as market size, language, minimum wage range, and statistics such as the number of jobs and unemployment, inflation, informality, and the average cost to launch startups (including legal and financial issues), the cost per click of each client, the cost of an average office, and the type and amount of associated taxes, among others.


“Startup founders see international expansion as amplifying market opportunities and improving business competitiveness. This is why smaller players must innovate and create a combination of talent and strategic partners to consolidate their local presence and expansion opportunities,” according to Vincent Speranza, director general of Endeavor in Mexico and its regional advisor for Latin America.


For his part, Michael Spence, senior advisor at General Atlantic and president of the GA Global Growth Institute, said: “Markets are affected by information gaps and asymmetries, but one of the things that digital technologies are doing is closing some of those gaps. That creates an enormous amount of value because, in doing so, it essentially increases the efficiency and performance of the whole system or market.”

Key overall findings from the report include:

  • The sectors that are expanding the most: Companies in the fintech, transportation and logistics, e-commerce and marketplaces sectors have expanded the most in Latin America over the past decade.
  • Characteristics of those who expand: On average, companies that have expanded internationally have 100 employees and have raised $4 million in venture capital investment, and expanded to at least three countries outside their original market.
  • Receptor and remittance countries of expanding companies: Argentina and Chile have exported the largest number of startups that have expanded internationally -57 and 53 companies, respectively-, while Mexico is the main receptor country of company expansion -145 of the 271 that expanded landed in the country-, followed by Brazil and Colombia.
  • Leaders and teams in the expansion: The landing and adaptation of the business model and operations to other countries was mainly carried out by country managers and by the founders of the expanding companies themselves.
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Respondents to the report’s survey said that the ideal team size for landing in foreign countries is fewer than 20 people; that the main positions hired were IT and engineering, marketing and branding, and customer service. They also noted that different teams played key roles at different stages of the decision:

  • The legal and finance teams played the most important role in the pre-landing stage.
  • The human resources, marketing and branding teams, in the landing stage.
  • Customer acquisition and sales, operations and marketing and branding, in the launch stage.
  • Products created ad hoc for expansion: 46% of companies that have expanded have created software for both consumers and producers.
  • Expansion and investment: To carry out this expansion process, most companies raised external financing, the largest source being venture capital (70%), followed by private equity (19%).
  • The most active VC funds in the region are Valor Capital Group, Tiger Global Management, SoftBank, Kaszek, Monashees and Canary.

Regarding the region’s entrepreneurial potential, Michael Haralambakis, international growth director for the Americas at Google, said: “Latin America is a market full of opportunities, not only for local companies expanding internally, but also for companies from abroad that want to invest in the great potential of the region. Google sees global expansion as an engine for the recovery and growth of the regional economy.”

“We hope that this study, developed in partnership with Endeavor, and tools like Google’s Market Finder, will enable companies to know where there is demand for their business anywhere in the world,” he added.


According to Martin Escobari, co-chairman, CEO and head of General Atlantic’s Latin American business and member of Endeavor’s global board of directors, “we believe this is an incredibly exciting time to be an investor in Latin America”.


“We are seeing Latin American entrepreneurs develop highly innovative solutions to critical challenges across sectors, while a supportive ecosystem, including mature capital markets and communities like Endeavor, enables them to scale their businesses throughout the region and beyond,” Escobari added.

Translated from the Spanish by Adam Critchley