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.
The Internet of Things (IoT) is a buzzword that many people throw around but not everyone understands. While it sounds obscure, the concept is simple; IoT is communication between physical objects that connect via the Internet.
These products are implanted using sensors, monitors, and other devices that allow them to communicate with other connected devices. For example, if a machine in a factory could automatically send an alert to the supervisor’s smartphone when a gear is starting to wear down, that communication would happen through IoT.
It’s easy to imagine hundreds of applications of IoT technology that could simplify or solve everyday challenges. In Latin America, where millions of people still struggle with safety (especially in big cities), access to clean water, or adequate healthcare, the Internet of Things has the potential to provide innovative solutions to these problems.
The field is still in its infancy in Latin America. Since IoT has applications across almost every industry, efforts to join forces or create collaborative solutions have been few and far between. However, the newness of this industry, as well as the rapidly-increasing connectedness of the Latin American population, opens many opportunities for IoT solutions to take hold in the region over the next decade.
One of the biggest opportunities in Latin America is unlocking the potential in legacy industries that haven’t been disrupted yet. Insurance is one of the biggest. Many Latin American insurance products are extremely expensive compared to people’s income and compared to more developed markets. There haven’t been many new entrants into the market yet.
That’s why I’m excited to announce our investment in Jooycar, a usage based car insurance service (UBI) that charges customers for how much and how well they drive. Drivers using the Jooycar system are saving up to 30% per month on their premiums and improve their driving behavior, because they can see how well they’re driving: how often they’re speeding, turning sharply, slamming on the brakes or driving erratically.
Jooycar uses a device that plugs into your car and transmits information back to the insurance company. Customers can view their progress in real time on Jooycar’s mobile app.
Jooycar’s founders, Maria Paz Gillet Martin, Emilio Figueroa Torres and Mario Ugemach Marin are serial entrepreneurs who also have significant experience working with large companies. They’ve been amazing to work with so far and I’m extremely excited to work with them as they expand across Latin America in 2017.