Today we announced Magma Media, our next step forward to continue to support Magma portfolio companies and hopefully the ecosystem at large.
We were inspired by the Andreessen Horowitz model of providing top class services to portfolio companies. We’re starting with media because these strategies do work and are low risk/high reward for startups. Even an extremely lean, revenue focused business will benefit from basic content marketing and a social media strategy. Rightly or wrongly, first impressions make a difference.
We currently offer:
- Growth strategies: landing pages, analytics, ads
- Content marketing in English, Spanish, Portuguese and Chinese
- PR in English, Spanish, Portuguese and Chinese
- Podcast production
- Video production
- Social Media management
I’ve been in Latin America for a little over eight years, first going to Chile in 2010. I spent the first five in Santiago, Chile, first going through Start-Up Chile, starting Andes Property and then cofounding Magma Partners. Since 2015, I’ve split my time between Colombia, Mexico, Chile and the US, and have been able to spend time in Argentina, Brazil, Peru, Bolivia and more, as we expanded Magma Partners across the region. I’ve truly been a nomad. I haven’t spent more than 6 weeks in a row in any location since I started this odyssey.
During my 8 years in Latin America, I’ve learned about culture, doing business and the opportunities available to both local and foreign investors. I’ve been writing about Latin America since 2010 and having conversations with top entrepreneurs and investors on the Crossing Borders Podcast since 2017.
Crossing Borders: A Venture Capitalist’s Guide to Doing Business in Latin America is a way to share what I’ve learned, along with these amazing entrepreneurs’ stories. My goal is to help foreigners and locals interested in pursuing business in Latin America get a jump start on their research. I also want help the Latin American entrepreneurs covered in this book share their stories more broadly.
In the US, most people gloss over payment processing because almost everyone has a credit card, Paypal account, or another simple way to pay. Developers use Stripe and can process in seconds. For consumers, Amazon even created one-click purchasing for some customers and physical buttons that automatically reorder your favorite products.
In China, paying is even easier; almost everyone uses Wechat or Alipay to scan QR codes and pay for everything automatically without ever taking out their wallet.
Startups have filled almost every niche in the payments industry, providing solutions for any vendor. Need to pay someone for something you bought in an online shop? PayPal can help. Setting up online payments for your business? Try Stripe. Want to compensate your roommate for your half of the gas bill? Venmo can help you do that.
We tend to take these solutions, as well as more traditional payment systems such as credit cards, for granted in the US. Only 6.5% of households in the US don’t have a bank account, although 18.7% of households are considered underbanked. If someone in the US wants to sign up for a Netflix account or buy a t-shirt online, they enter their credit or debit card information, and that’s it.
In Latin America, completing an online transaction is not so simple.
In the startup world, success always attracts copycats and competitors. As a result of past successes, Latin America’s food delivery industry is one of the most competitive in the world. Brazil’s iFood, a subsidiary of tech giant Movile, became one of the biggest players in the Latin American startup ecosystem, raising US$500M from Naspers and other international investors, in what many consider to be the largest round in Latin American startup history. iFood is growing incredibly quickly, registering 390,000 daily deliveries, a 109% increase from 2017. iFood’s CEO, Carlos Moyses, recently appeared on my Crossing Borders podcast to talk about the growth of Brazil’s biggest delivery company.
Rewinding back to the early 2010s, food delivery in Latin America had its first peak long before the region truly went digital. Latin America’s food delivery hit the news because Delivery Hero, a German food delivery conglomerate, secured international reach through a spate of acquisitions in the region.
In many ways, these deals spurred the next generation of entrepreneurs in the food delivery space and created many of the most popular apps Latin Americans use today.
Food delivery fits into a trend that is shifting Latin American shopping patterns online. When PedidosYa was founded in 2009 in Uruguay by Alvaro Garcia, Ariel Burschtin, and Ruben Sosenke, just 27% of Latin America’s population had Internet access.
Today, 66% of Latin Americans have Internet access, and in Argentina, Chile, Brazil, Ecuador, Paraguay, and Uruguay, more than 70% of people are Internet users.