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.
As the calendar turns toward April 15th, everyone in the US knows what’s coming: tax day. While the Internal Revenue Service (IRS) has updated their systems, and there are dozens of tax management tech products, many people still have to file via a paper 1040 form that takes 6-8 weeks to process. Compare that to Chile, a less “developed” country according the most of the world, where paying taxes is as simple as logging on to the Servicios de Impuestos Internos (SII, Chilean IRS) website to see all your paychecks and spending from the year. On Chilean tax day, people can immediately if they’ll get a refund and how much it will be, which then shows up in your bank account automatically in 1-4 weeks.
Electronic tax filing systems are not unique to Chile. Colombia, Argentina, and Mexico allow people to pay taxes online or even via app, using a personal identification number like a Social Security number.
However, not all of Latin America is so progressive when the time comes to pay taxes. According to the World Bank, Brazil’s tax policy is one of the most complex in the world, so much so that doing taxes requires over 2000 hours per year, compared to 291 in Chile, 311 in Argentina, and Colombia with just 239. Latin American countries also have Value Added Tax (IVA in Spanish) that you have to pay monthly included in their totals.
Across the region, government ministries are rapidly introducing new methods to simplify and speed up the taxpaying process. Here are some of the ways Latin American governments are working to improve the often-painful process of paying your taxes.
Only 11% of Latin Americans have access to credit from formal institutions. In fact, in Chile, 37% of adults have no accounts with a formal financial provider, even though Chile has one of the highest levels of financial inclusion in the region.
In comparison, under 40% of adults in Colombia, Mexico, and Peru have formal bank accounts. However, in one of the most chronically underbanked parts of the world, improvements in financial technology have opened the doors for widespread financial inclusion throughout the Latin America.
More and more people are accessing mobile payments, credit systems, and P2P lending opportunities through recent advances in local fintech, and investors are catching wind of the enormous opportunity.
While there have been considerable advances in financial technology in Latin America in the past five years, many tools are still only available in the countries where they were founded. A report by Oliver Wyman, released in September 2016, provides a snapshot of local fintech players in Chile, Brazil, Mexico, and Colombia.
Colombia has come a long way as a country and as a place to do business. The sensationalized version of Colombia that Narcos depicts is no longer accurate, though the reputation lives on.
Colombia’s history is long and complicated, filled with violent groups trying to control the country’s lucrative drug trade. But there’s so much more to Colombia than just drugs. 2017’s historic peace agreement between the Colombian government and the FARC, the largest guerrilla group, is a potential inflection point in Colombia’s history. And if I had to bet on a single Latin American country for the next 10-15 years, Colombia would be my pick.
Though many think it’s coffee, Colombia’s largest export is actually petroleum, which makes up over a third of the country’s exports, followed by coal, coffee, cut flowers, and gold. Coffee, however, was responsible for pushing Colombia toward a manufacturing based economy. After the War of a Thousand Days, which ended in 1902, Colombia’s coffee boom pushed the country to seek better transportation and manufacturing mechanisms.
Coffee production consistently grew in the 20th century, employing more than 500,000 families. While the government managed Colombia’s economy conservatively, the the political atmosphere turned increasingly unstable, corrupt and violent from the drug trade.
In 1991 the country adopted a new constitution. The motive for this wasn’t necessarily economic, but rather political, in order to make peace and bring drug lords to justice. Colombia remained relatively stable economically until the late 1990s when fiscal deficits cause a higher public debt which resulted in the country’s first economic recession in over 60 years. But by the early 2000s, the economy began to recover, due to high petroleum prices and stable coffee prices. (more…)