How Immigrant Entrepreneurs Are Helping Change the Way LatAm Does Business

Immigrants make up 15% of the US workforce, but they also make up one-quarter of the country’s entrepreneurs. Currently, up to 40% of new companies in the US have at least one immigrant founder. Immigrant-founded companies receive higher percentages of VC funding, according to this HBR report.

While similar statistics are not widely available for Latin America, there are some interesting numbers that stand out. For instance, there are close to one million US citizens residing in Mexico. The success of programs like Start-Up Chile and Parallel 18 speak to the positive impact that immigration can bring to a startup ecosystem. Living in a new country exposes potential entrepreneurs to new problems that they might have never faced back home, sparking ideas for new businesses. Immigrants may also bring unique skill sets and perspectives that allow them to create more innovative solutions to local issues. 

I’ve also noticed that living or studying abroad for a period can produce a similar effect. Many of the top entrepreneurs I’ve seen in Latin America left home to study in the US or UK, only to return to their home country, or another part of LatAm, with an entirely new perspective on their local problems.

Opportunities in Latin America

As the US tightens its borders, Latin America is taking the opposite approach. Many countries in Latin America are positioning themselves to welcome foreign entrepreneurs and help them set up their businesses in a new country. And while many countries in the region are quite relaxed when foreigners overstay their visas, with the belief that foreigners add dynamism to the economy, Chile, Mexico, and Colombia now have fast-track visa options for entrepreneurs and investors who want to set up businesses or invest locally. 

These visas, which allow tech workers to skip over four- to eight-month wait times, are just one of the factors attracting entrepreneurs to Latin American startup hubs. These cities also provide access to ample affordable talent, lower costs of living, and large markets with rapidly-increasing purchasing powers.

Latin America still faces entrenched problems that are worth solving, including logistics, real estate, finance, insurance and more, all of which are core industries we take for granted in the US. Many Latin American countries are aggressively seeking out foreign talent to help build businesses that will rejuvenate their economies and help them prepare for the future.

Here are the stories of some of the entrepreneurs who have moved across Latin America to create startups with a global impact.

1. Moving to the market that works for your business. 

Born in Argentinian Patagonia, Federico Vega originally founded CargoX (under a different name) from his office in the UK, then took it to Santiago through Start-Up Chile. Federico eventually realized the size of the Chilean market would put a limit on his company’s growth and decided to shut it down, only to start it again in Argentina. 

Argentina wasn’t the right fit either. For a brief period, Federico was living out of his car in Sao Paulo to make his “Uber for trucking” work, a big step down from his cushy London banking job. When he made the leap to Brazil, a country where he didn’t speak the language, the business hit an inflection point.

Brazil has one of the most challenging and inefficient trucking systems in the world. Trucks run empty up to 70% of the time, which is a waste of time and money for drivers and suppliers. CargoX helps make sure trucks never run empty, hitting that pain point directly on the head. In September 2018, CargoX raised a $60M round from international investors Blackstone Group, Goldman Sachs, Valor Capital, and Hudson Structured Capital Management to continue building in the Brazilian market. Today, they are one of the top ten biggest trucking companies in Brazil without owning a single truck.

2. Solving global problems across the Latin American market.

Komal Dadlani, CEO and Co-Founder of Lab4U, always wanted to make a difference in the world. After studying to be a biochemist in her native Chile, she realized most students in the world never had access to the lab equipment that could make learning science more fun and informative. She set out to create a mobile app that would allow any smartphone to become a science lab. She knew this problem extended beyond Chile, so as soon as she finalized the product, she was selling in the Mexican and US markets.

Komal might be better described as a nomad than an immigrant, since she spends her time circulating between the offices in her three main markets. Having raised capital in the US, Chile, Argentina, and Mexico, she knows how to strategically grow her business alongside local partners. Komal recently announced the completion of a 10,000 student study by the IDB that proved students in Mexico had significantly higher physics scores, self-perception of scientific knowledge, and interest in studying STEM after using the app. 

Taking the leap out of the Chilean market allowed Komal to see that poor science equipment was a global problem, and that her solution could have an impact beyond her home market.

3. Using corporate experience to launch abroad.

Diego Caicedo, CEO and Co-Founder of OmniBnk, started his company in Chile (originally named Portal Finance) despite growing up in Colombia and the US. A serial entrepreneur, Diego also worked in Chile’s mining sector for eight years before realizing an opportunity to capitalize on Chile’s advanced electronic invoicing system to improve invoice-backed financing for SMEs. 

While his home country of Colombia also uses e-invoicing, Diego saw that Chile’s standardized and centralized electronic invoices presented a more apt market to test out OmniBnk’s services. In fact, after developing within the Chilean market, OmniBnk expanded to Colombia, whose regulatory and financial systems resemble Chile’s, to provide improved financing options to millions of SMEs across the region.

4. Thinking global from the start.

When Oskar Hjertonsson, a Swedish graduate of industrial and financial engineering, was traveling through Chile in 2007 he met Daniel Undurraga, a Chilean national. With a joint entrepreneurial spirit, they established their first business venture together, Needish. The platform was a space for users to publish their needs and, in turn, access a network of services. While the site was not an economic success, tech giant Groupon saw potential in the talented team and acquired the business in 2010. Sequentially, Hjertonsson and Undurraga led Groupon’s Latin American division during the following years. 

The entrepreneurs then went on to found a new startup, Cornershop, an on-demand grocery delivery service for Latin America in 2015. Part of their success this time around was due to a more global approach from the start, launching Cornershop in Mexico and Chile simultaneously. Though an acquisition attempt by Walmart in early 2019 fell through, the company remains one of the leading on-demand delivery services in the region. Hjertonsson and Undurraga are now widely-recognized as knowing what it takes to scale a company from a small country like Chile to the rest of Latin America.

5. Challenging existing systems.

David Vélez ventured into the Brazilian banking system as an outsider. The now cofounder and CEO of Nubank grew up in Colombia. However, the violence that plagued his city of Antioquia caused his family to move to Costa Rica, where he stayed until he was 18 years old. He then went on to study engineering at Stanford University in the US, which led to a career working in investment banking and growth equity at Goldman Sachs, Morgan Stanley, and more.

At one point, Vélez was chosen to open a VC office for top US firm in São Paulo, Brazil. This was one of his first entrepreneurial experiences because he had to build a team from scratch, quickly grasp new sectors of the economy, and learn how to find investment opportunities. It was during this role that he realized how difficult it was to open a bank account in Brazil. In 2010, he decided to return to Stanford to pursue an MBA and shortly after cofounded Nubank with Cristina Junqueira, which became part of a new wave of fintech “challenger banks” in Latin America. 

Vélez and Junquiera saw an opportunity to create a bank that would not only challenge the traditional Brazilian banking systems, but also be one of the first completely digital banks to provide services across the region. By challenging outdated systems, Vélez found a way to tap into a significant opportunity – the more than 55 million people in Brazil who are underbanked but have access to the Internet and mobile devices. Nubank is now launching in Mexico and Argentina and its valuation is currently $10 billion, making it the world’s most valuable neobank.

6. Using Puerto Rico as the gateway to Latin America.

While Puerto Rico is technically part of the United States, PR is culturally closer to Latin America. This placement makes Puerto Rico an ideal location for US entrepreneurs who are looking to serve the Latin American market, like Abartys Health

Lauren Cascio moved from the US to Puerto Rico and co-founded this startup with Dolmarie Mendez to improve data flow and communication between doctors and patients. While Abartys originally went after the US market, the founders recently raised $1.45M to bring their solution to Latin America. 

Abartys Health applied what they learned in one of the world’s largest markets to an expansion across the major markets in Latin America, including Peru and Brazil. They are also pursuing this mission as two single mothers. Their experience crossing cultures between the US and Puerto Rico helped give them confidence in their product to take it across Latin America, advocating not only for better healthcare, but also for more support for female founders.

These six entrepreneurs represent just a small sample of the dozens of founders who have moved to a new country in Latin America to start a business using an outside perspective. A few of these immigrant entrepreneurs include:

  • Sergio Furio: Sergio moved from Spain to Brazil to found BankFacil in 2012. BankFacil became Creditas, which recently raised  $231M in new financing led by SoftBank Vision Fund and SoftBank Group.
  • Tomasso Tomba: The British-born cofounder of Moons, an Invisalign for Latin America
  • David Lloyd: The British-born cofounder of The Intern Group, an internship abroad program based in Chile and Colombia, with offices in 10 countries.
  • Brian York: Born in Colombia, raised in the US, Liftit’s cofounder moved back to Colombia to start a trucking startup
  • Vera Makarov: Originally from Russia, Vera founded Apli in Mexico when she realized the friction in the Mexican hiring process while investing in the country.
  • Daniel Bilbao: The Colombian-born founder started multiple businesses in the US, where he’s now based, but turned his attention to Latin America for Truora.

Immigrants have a hand in building many of the world’s most successful companies. Moving to new market provides a unique perspective on local problems that can allow immigrant entrepreneurs to come up with innovative solutions and businesses. Having started my career in Chile as an immigrant entrepreneur, I understand the eye-opening process that is arriving in an emerging market and realizing how many problems there still are to solve. These stories are just a few among the hundreds of entrepreneurs who were inspired to move to or stay in Latin America to address local challenges, and who are changing the way LatAm does business.