Verticals

Artificial Intelligence has become one of the fastest-growing technology verticals in Latin America. Today, over 40% of companies in the region already use AI-powered solutions, and adoption continues to accelerate as access to cloud infrastructure, data and computing power expands. AI is being applied across industries to enable automation, predictive analytics, generative tools and intelligent customer interactions.

Latin America represents a significant opportunity for AI-driven innovation. With more than 650 million people, fragmented markets and persistent operational inefficiencies, AI-native companies are helping organizations improve productivity, reduce costs and scale more efficiently. Small and medium-sized businesses, in particular, are increasingly adopting AI to compete with larger players and modernize legacy processes.

Investor interest in AI across the region has grown substantially, with the Latin American AI market expected to reach tens of billions of dollars over the next decade. This momentum is supported by a growing ecosystem of startups, talent and institutional support, positioning AI as a key driver of digital transformation and long-term economic growth in Latin America.

The Association for Private Capital Investment in Latin America (LAVCA) predicts that the number of Smartphone owners will increase to 76% by 2025. With an estimated population over 626 million people, these technological shifts are tremendously helpful to fintech start-ups to build digital products and services such as mobile payments, digital banks, eWallets and more. Latin American financial regulators are increasingly drawn to the open banking playbook to break up bank monopolies and increase financial inclusion. IDB has also supported progress by providing technical assistance in various countries to develop public policies and regulation. This ecosystem has led to a 50x growth in fintech funding in the past 6 years.

There is a growing market for tech companies focusing on providing services for small and medium enterprises (SMEs) and segments previously ignored by the traditional financial system.

AgTech is a booster for global agricultural productivity in a sustainable way. With its ramifications in foodtech, biotech, IoT, AI, genomics, sensoring, BigData, robotics and Microbiomes it expands rapidly and globally thanks to start-ups, funds and strategic players investing billions of dollars in projects that apply science and technology to increase food production and improve land productivity.

According to The United Nations the global food system will have 9.6 billion people to feed by 2050, which will require 60 to 70% more food than is produced today. Technology applied in agriculture will be key to discover new ways to improve productivity while minimizing inputs, managing costs and respecting the environment.
South America is one of the few regions of the world that has the opportunity to greatly expand production and export the food surplus to the world. It benefits from land availability, agricultural diversity and natural resource wealth (sufficient fresh water).

According to the BID, Latin America has 38% of the land destined to the agricultural sector and is the largest food supplier region in the world. In recent years it is immersed in a wave of technological innovation in the field.
Many Latin American countries depend on agriculture to generate a significant portion of their GDP, exports, jobs and fiscal revenues; this socioeconomic environment is a driver that consolidates the region as one of the development hubs for high impact technology-based Ag companies.

Overview Colombian Agrifood Sector

According to Unissu there are currently around 350 PropTech companies across Brasil, México, Argentina, Chile and other LatAm countries. The region is in its infant stage of the technology – becoming aware, understanding needs and beginning to look for solutions.

Large amounts of data that are being generated, analyzed and applied by Proptech firms is producing a digital transformation of the real estate sector. This trend is enabled by a wide range of converging technologies: mobile, broadband, cloud, big data, artificial intelligence (AI), Internet of things (IoT), blockchain, 3D printing and others.

Today’s PropTech products or services have incredible potential to save time and money, improve workflow and streamline fundamental processes for the industry. The growing popularity of these technologies will create an on-demand real estate market that aligns with modern priorities of Latin American societies.

With a growing demand worldwide for environmentally sustainable solutions, investments in Cleantech have experienced an exponential increase. The UN Environment Programme’s 2018 Global Trends in Renewable Energy Investment report shows that global investment in renewable energy surpassed $200 billion in 2017, while $2.9 trillion has been pumped into sources such as solar and wind power since 2004.

As the market for Cleantech continues to expand, Latin America has latched on to this growth. According to the World Bank, electricity consumption in Latin America will more than double between 2010 and 2030, and an estimated $430 billion in investment will be needed to meet that demand. As a region that is home to the most delicate ecosystems and immense biodiversity, investing in Cleantech is not just a commercial endeavour, but an environmental necessity. Latin America presents itself as a huge untapped source bursting with clean energy potential. At the 2019 UN Climate Action Summit, Colombia presented Latin America’s collective target of 70% renewable energy use by 2030.

Latin America is one of the most urbanized regions in the world today. It is home to more than 649 million people and more than 80% of the population is urban. It is estimated that Latin America’s cities will grow to 711 million in the next decade. The common challenge faced is the speed and scale of modern urbanization and the inability for urban planning to catch up.

This rapid growth stresses the need for traffic infrastructures and public transport systems – expansion of roads, parking real estates, and improvements on road and commuter safety, around cities as these infrastructures and systems try to play catch up as more people continue to move in and around metropolitan areas.

Healthtech has the capability to advance the dissemination of healthcare and bring new innovations to transform the industry’s processes in a wide range of subsectors. There are endless possibilities in healthtech to improve the lives of consumers, businesses, and governments alike, and the essential partnership between healthcare and technology is grabbing the attention of investors globally. With the rise of the COVID-19 pandemic, healthtech stands to play a crucial role in humanity’s fight against the virus.

According to the Distrito Healthtech Report, global investments in healthtech doubled from $7.1 billion to $14.6 billion by 2018. In Latin America, 142 healthtech companies have been identified by Crunchbase as having high growth potential.

The healthtech startup scene is also flourishing in Latin America, with 60 healthtech startups in Colombia alone. In addition, healthcare expenditure in the region is growing at a Compound Annual Growth Rate (CAGR) of 3.4% per year and is slated to keep rising.

As public health systems in Latin America attempt to cope with burgeoning needs, opportunities in both the public and private health sectors will arise for the healthtech industry to lead the way.

With its employment of a wide range of technologies including artificial intelligence (AI), big data and analytics, cloud computing, and social media, HR Technology brings advancements to previously tedious processes such as hiring and recruitment, talent management, payroll, legal and compliance, and employee mobility. When employed effectively, HR Tech delivers copious benefits ranging from optimised talent acquisition and employee performance to seamless technological integration in training and development programmes. Demand for digital recruitment has significantly benefited from Covid19 effects.

HR Tech is rapidly gaining a foothold in the Latin American market where companies are planning to increase investment in HR Tech by up to 45% in areas such as internal communications, training, and performance evaluation. There had been sustained growth in HR Tech investment in the region from 2015 to 2018, and 54% of companies planned to further boost investment in 2019.

The HR Tech landscape in Latin America thus promises to keep evolving and providing opportunities for companies to be a part of this digital transformation.

As in emerging countries, most people in Latam are underinsured, insurance offerings are generally perceived as inappropriate or too expensive. Despite this reality, a study by MicKinsey shows that Latam was the second fastest growing global insurance market in 2019, reaching $73 billion. This trend is expected to continue in the coming years, growing at a rate of 4.8% per year according to Accenture.

While Latam’s Insurtech sector still attracts little investment – less than 1% of global Insurtech funding – the number of Insurtech companies in Latam is growing. New technologies are opening up new business opportunities. Whether it is software solutions that enable customers and companies to get personalized insurance offerings – such as dash cam combined with artificial intelligence – or distribution platforms – such as comparison platforms – , the traditional insurance market is being modernized thanks to Insurtech startups. Also, by developing and distributing new insurance products, Insurtech can directly compete with insurance companies.

Insurtech has potential in Latam in all areas of insurance intervention: life, health and, property and casualty (gathering mainly home and car insurances). Specifically, in the Latam market, the most promising insurance sub-sector can be expected to be health.