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Contxto – Coronavirus (Covid-19) has everyone cooped up at home in self-isolation. But venture capital (VC) firm, 500 Startups is taking viewers on a digital world tour to learn how regional ecosystems are coping.
And in a recent webinar hosted by the VC’s Managing Partner, Bedy Yang, spoke with Santiago Zavala, Partner at 500 Startups LatAm, to learn more about how the Spanish-speaking countries in the region are faring in the face of Covid-19.
Considering that Zavala, through 500 Startups LatAm and its accelerator program, is connected with entrepreneurs in Mexico, Argentina, Colombia, Chile, and Peru—it’s quite safe to say that he knows what they’re up against.
Macroeconomics and startups
There are global events such as Covid-19 and the gradual economic slowdown that are affecting countries everywhere. Add to that the recent plunge in oil prices and the world is cooking up a perfect storm of macroeconomic problems for startups to solve. And Latam isn’t the exception.
Telemedicine, education, logistics, commerce, finance… regional startups are currently covering many fronts and at a fast clip.
“It’s important now more than ever that we have startups and entrepreneurs in Latam,” said Zavala. “We’re gonna need all that startups’ ecosystem and energy to readapt these industries.”
Trends, opportunities and challenges
The ecosystem as a whole has been steadily evolving for the past couple of years. A sign of greater maturity is the rise of startups with products that can be globally scaled. Likewise, portfolio companies like Chilean Get on Board are helping local talent scale internationally.
As a result, Zavala believes that the scalability of products and employees from Latam is one trend that may increase in the future.
He also noted that for those that have matured sufficiently to scale and sell their solutions in dollars, recent currency shifts are providing a profitable opportunity for them.
One upcoming challenge for startups is addressing shifts in transportation habits. Zavala stated that as a result of Covid-19, mass transit habits may change. And in their current state, they’re quite saturated.
- Related article: 500 Startups LatAm is looking for 10 startups
Another challenge for startups is addressing fundraising for the ongoing coronavirus context and beyond it, once the recession sinks in.
“This situation will separate the real investors: the ones that take risks from the ones who are just hearing pitches,” observed Zavala.
Despite these circumstances, he went on to add that portfolio companies shouldn’t be inhibited by them. Rather, if they have a great project, they should still knock on VCs’ doors. And I’m keen to believe that that goes for all founders looking for funding.
Worst case scenario, they get a “it’s not a good fit at this time” and they add another contact to their network.
It’s a brave new world, founders. And both VCs and startups are still trying to sort through what’s happening.
But once the dust settles, I think Latam’s startups and the ecosystem will be scrappier and stronger than ever.
Related articles: Tech and startups from Mexico!
-ML
