Category: Latin America Startups and Investing

Nathan Lustig on Mixergy: A VC’s Inside Look at Latin America, Ep 82

Mixergy’s Andrew Warner interviewed me on his Mixergy Podcast as part of his series of podcasts with Latin American entrepreneurs and investors. Be sure to check out his podcasts with Maria Paz Gillet, Devin Baptiste, David Lloyd, Santiago Zavala and more. We cover how I ended up in Latin America, why we started Magma Partners, my previous startups, Andes Property and more. I reposted our conversation in its entirety, so I hope you enjoy my conversation with Mixergy’s Andrew Warner.

From Mixergy:

Nathan Lustig is the co-founder of Magma Partners, an early-stage investment firm that supports the best Latin American entrepreneurs to launch and scale in the US.

Nathan literally wrote the book on what it’s like to do business in different parts of Latin America. It’s called “Crossing Borders: A Venture Capitalist’s Guide to Doing Business in Latin America.”

I wish I had read it before I flew to Mexico City to do my first set of interviews because he really explains how the world south of the American border operates when it comes to startups and business.

An Overview of Edtech in Latin America

Global investments in education technology, commonly known as edtech, will reach $252 billion by 2020. In fact, the global e-learning market is growing over 14% annually, and this growth rate is likely to continue.

In Latin America, government focus on education increased significantly over the last two decades. As a result, Latin America is now the fourth largest edtech market in the world – behind North America, Western Europe, and Asia in terms of revenue – with expectations for the e-learning market to generate revenues of over $3 billion by 2023.

According to UNESCO, more than 12 million adults in 20 Latin American countries are participating in some form of online education. This is not just online courses; millions of people are now accessing written materials, webinars, podcasts, collaborative software, and more.

What’s driving edtech opportunities in Latin America?

The short answer is surging levels of mobile and Internet access.

Latin America is a world leader in mobile adoption, with more than 415 million out of approximately 690 million people connected to a mobile network. Approximately 60% of all mobile connections in Latin America are smartphones and there are predictions that by 2020, 63% of Latin America’s population will have access to the mobile Internet. This rapid growth is translating into endless opportunities for the edtech sector, even in the most rural and remote areas.

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Mike Packer, QED Investors: The Trailblazing US VC Investing in Latin American Fintech, Ep 78

In 2014, nearly all US-based VCs were reticent to invest in Latin America. But that didn’t stop Washington, DC based QED from building one of Latin America’s most impressive startup portfolios. Before becoming a Partner at QED Investors, Mike’s path into the finance world was not obvious. Mike’s first foray into finance was his job at Capital One where he pursued his passion for using data to solve problems.

Today, Mike lives in Tampa, Florida and is a Partner at QED Investors, a venture fund that has made over 100 mostly fintech investments in the US, UK, and Latin America. QED has been involved in some of Latin America’s top fintech deals including Nubank, Creditas, Credijusto, Guia Bolso, Loft, and Quinto Andar and many more.

On this episode of Crossing Borders, I sit down with Mike Packer to talk about his journey from working in banking at Capital One to joining QED as Principal, and then making his way up to Partner. We also learn about how startups should approach venture capital firms for funding and what to expect in fintech in the next coming waves within the region.

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Autotech in Latin America: An Overview

1.4 million cars joined the roads in Latin America in the first quarter of 2018. In a region that struggles with automobile safety, the increase of motor vehicles on the road raises challenges for policymakers, auto manufacturers, and citizens. Over 115,000 people die every year from car accidents in Latin America. In 2000, 26.2 people per 100,000 died in car accidents and that number is expected to rise to 31 car-related deaths for every 100,000 people by 2020. In the US, the rate of accident deaths hovers around 11.4 per 100,000 people.

Managing Latin America’s growing automobile fleet is one of the most significant challenges that startups and governments will need to tackle as cities swell. Latin America is home to many auto producers, so manufacturers will also need to pay attention to new technology to stay competitive.

Opportunities in autotech in Latin America

Worldwide, startups and giant tech companies are tackling the conventional auto industry with solutions that include self-driving vehicles, electric cars, pay-per-mile insurance, and car-shares. Latin America is experiencing a wave of autotech startup launches, including a few that raised notable international investment rounds.

Much of this innovation remains concentrated in Latin America’s two largest markets: Brazil and Mexico. This disparity makes sense as 70% of vehicles on the road in Latin America are in these two countries. In Brazil, there is approximately one car per four inhabitants, while in Mexico, the ratio is one in three. Argentina, Colombia, and Chile trail far behind in quantity of vehicles but maintain similar ratios.

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