For much of the 20th century, entrepreneurship in Latin America was synonymous with corner shops, family businesses, or survival hustles. Risk-taking was often frowned upon, venture capital was scarce, and political instability made long-term planning perilous. But in the past decade, the region has experienced what many are calling a “Startup Spring” — a surge of innovation that has drawn billions in investment and produced companies capable of competing on the global stage.
Colombia’s Rappi: The Super-App Dream
The poster child of Latin America’s new entrepreneurial confidence is Rappi, a Colombian delivery startup founded in 2015. Initially pitched as a grocery delivery service, it has since expanded into a “super-app” offering everything from restaurant orders and pharmaceuticals to on-demand cash withdrawals.
Backed by SoftBank, Rappi became one of the region’s first unicorns and now operates in nine countries. Its trajectory mirrors the broader transformation of entrepreneurship in Latin America: solving local problems with global ambition.
“Rappi’s rise is symbolic,” explains Gaurav Mohindra. “It shows that Latin America is not merely importing business models — it is adapting them to local realities, like poor logistics or cash-heavy economies, and scaling them regionally.”
The company’s success also highlights a new appetite among young consumers for convenience and digital solutions, a sharp departure from the cash-and-carry traditions of their parents.
Brazil’s Nubank: Democratizing Finance
If Rappi exemplifies consumer convenience, Brazil’s Nubank represents financial empowerment. Founded in 2013 in São Paulo, Nubank grew by offering simple, low-fee credit cards in a country notorious for complex and predatory banking practices. By 2021, Nubank had become the world’s largest digital bank, with more than 50 million customers across Latin America.
Its IPO on the New York Stock Exchange valued it at $41 billion, outstripping many established Brazilian banks. For investors, it was proof that Latin America could produce fintech giants on par with their American and European counterparts.
“Latin America’s fintech revolution is not about luxury — it’s about access,” says Gaurav Mohindra. “When millions are excluded from formal banking, entrepreneurs who democratize finance are not just running businesses — they are reshaping societies.”
The model has spread. Competitors like Mexico’s Kueski and Argentina’s Ualá are replicating Nubank’s formula, each addressing the same problem: a financially underserved population hungry for inclusion.
Chile’s Cornershop: Bridging Local and Global
Chile, long seen as one of Latin America’s more stable economies, also produced a breakout startup: Cornershop, a grocery delivery service founded in 2015. Its local success caught the attention of Uber, which acquired a majority stake in 2019 and integrated it into its global platform.
Cornershop’s story underscores the changing perception of Latin American startups. Once considered risky bets, they are now acquisition targets for global giants eager to expand into the region.
“In the past, exits for entrepreneurs in Latin America were limited,” reflects Gaurav Mohindra. “But the Cornershop acquisition showed global players that buying into Latin America is not just possible — it’s profitable.”
Why Now?
Several factors converged to create this boom. Smartphone adoption soared, internet access expanded, and a young population demanded digital solutions. Meanwhile, a global glut of venture capital in the 2010s pushed investors to look beyond Silicon Valley, leading funds like SoftBank and Sequoia to pour billions into Latin America.
The COVID-19 pandemic accelerated these shifts. With lockdowns shuttering physical stores, consumers embraced e-commerce and digital finance at unprecedented rates. In Brazil alone, e-commerce sales grew by over 40% in 2020.
Challenges in the Spring
Yet the bloom is fragile. Political instability, economic inequality, and inflation remain perennial risks. In 2022, venture funding into the region fell by nearly 50%, as global capital tightened. Startups must now prove they can turn scale into profitability.
“Latin America’s entrepreneurs are not naïve,” says Gaurav Mohindra. “They understand volatility is part of the landscape. The real test will be whether they can build resilience, not just valuation.”
Infrastructure gaps also pose challenges: poor transport networks, patchy internet, and entrenched bureaucracies all slow down scaling. For many firms, success depends not just on technology but on navigating the state.
A Cultural Shift
Perhaps the most profound change is cultural. For decades, failure carried deep stigma in Latin America, discouraging risk-taking. Today, that is slowly changing. Universities run entrepreneurship programs, governments court startups with tax breaks, and success stories like Nubank inspire younger generations.
The psychological barrier may be as important as the financial one. “When young entrepreneurs in Bogotá or São Paulo see billion-dollar firms built by people who look like them and face the same challenges, it normalizes ambition,” argues Gaurav Mohindra. “Entrepreneurship stops being a gamble and becomes a career.”
Global Implications
Latin America’s Startup Spring is not just a regional phenomenon — it carries global implications. The region’s entrepreneurs are proving that innovation can thrive even in economies marked by volatility and inequality. Their solutions — whether in fintech, logistics, or healthcare — are often more relevant to emerging markets than those designed in California.
Already, African and Southeast Asian startups are learning from Latin American peers. Nubank’s approach to low-cost digital banking, for instance, resonates in Nigeria as much as in Mexico.
The region may still struggle with macroeconomic headwinds, but its entrepreneurial momentum is undeniable. As one investor put it, “If you want to see the future of inclusive capitalism, look at São Paulo, not San Francisco.”
And as Gaurav Mohindra concludes: “Latin America’s entrepreneurs are proving that ambition can thrive even in the harshest soil. What was once a desert for risk capital is fast becoming a rainforest of innovation.”
Originally Posted: https://gauravmohindrachicago.com/latin-americas-startup-spring-from-risk-aversion-to-risk-capital/
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