In Latin America, founders and investors strike a balance between prudence and optimism •


Cautious optimism” is the mood among founders and investors in Latin America today, amid an uncertain global scenario.

In this year Report on Digital Transformation in Latin America, Atlantico’s investment team describes how the region, in its rear-view mirror, is leaving behind a decades-long boom in technological value creation. With a record $16 billion in venture funding in 2021, nearly quadrupling from the previous year, Latin America broke through to the global stage. But while we saw total funding cut in half this year, the region is still counting on higher investment volumes than any year before 2021, fueling “cautious optimism”.

In the past five years, the first unicorns have been born in Latin America, a long-awaited turning point in the digital transformation of a region of more than 650 million people.

With the dust of the market turbulence still settling in, local players are wondering how best to play their hand: ignoring calls for austerity could mean squandering the profits from these golden years, but not taking advantage of the special The region’s post-pandemic position may leave a lot of money on the table.

In recent months, we have seen the pandemic-induced boom in technology adoption fade in the US and other developed markets. Market enthusiasts of the pandemic period ranging from Shopify to Peloton have been forced to cut headcount as usage levels return to the pre-pandemic historical trendline.

The persistence of Latin America’s digital gains is perhaps most evident in the continued increase in e-commerce penetration.

Latin America has clearly not suffered from this hangover from digital adoption. Instead, seemingly permanent gains of two to three years can be observed across a wide range of technology adoption indicators: e-commerce penetration, grocery delivery volumes, and the use of digital banking and telemedicine have all continued to grow rapidly after the move. of 2020 feature gain.

Online share of retail vs.  pre-pandemic trend, US vs.  Brazil.

Online retail share vs. pre-pandemic trend, US vs. Brazil. Image Credits: Atlantico

Caution in an uncertain world

Uncertainty is still the order of the day in markets around the world as tech companies and investors try to figure out how to weather the storm. After a long period of excess liquidity and low interest rates, inflation finally kicked in, putting the brakes on central bankers.


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