Latin America has been covered heavily in the international news as the COVID-19 pandemic led many to question our endurance in the face of a crisis. But the region’s mega-fundraising rounds and shiny new unicorns have countered with optimism around its budding tech ecosystem. E-commerce penetration was at an all-time high and the market cap of public technology companies was growing much faster than the region’s GDP. But with 2021 came all the second- and third-order effects of the crisis, further accelerating a continentwide tech expansion to a pace beyond any projections. Ranging from the rapid adoption of sustainable technologies to the welcoming of a new local creator economy, we detail the surprising changes the pandemic has brought to consumer preferences, workplace dynamics, business models and the geopolitical influence on the fast-changing tech sector. An initial top-down view paints a clear picture of a region at an inflection point. The Atlantico Digital Transformation Index, which measures tech penetration by tracking the value of public technology companies as a percentage of GDP, rose to 3.4% in 2021 from 2.3% in 2020 for LatAm.
Based on an internal analysis of private company data, we estimate that the value of regional unicorns reached $105 billion, more than double last year’s figure of $46 billion. Eight new unicorns have already been minted this year, nearly reaching 2020’s rate by midyear. Much has been written about Latin American fintechs, which last year drew 40% of the region’s venture capital investment. The revolution witnessed over the last five years, which produced the likes of Nubank (the world’s largest digital bank), was sparked by a mix of changing consumer demands, a concentrated banking sector and a pro-innovation regulatory environment. We are now seeing the second-order effects of the fintech boom, as the same set of conditions arise in other soon-to-be disrupted sectors.