How do Latin America and Southeast Asia differ in their tech development pathways?

There has been a lot of buzz surrounding Latin America, especially after Shopee took the region by storm and Nubank’s IPO last week. 

However, that’s just the tip of the iceberg. Latin America and Southeast Asia are strong contenders for the next frontier in tech investment and entrepreneurship. Both these regions have a combined population of 1.3 billion people and received more than $12 billion dollars in tech funding last year. 

So, how do these regions hold precedence for global investors and tech companies? 

We just released the Southeast Asia & Latin America – learning digital emerging markets playbooks report in collaboration with our partner Cento Ventures.

The tech industry is booming in both these emerging global markets. The largest tech unicorns in Southeast Asia and Latin America went public recently at very similar valuations. 

In this report, we delve into how similar business models in each region took different development pathways, why they evolved differently compared to their counterparts and the deciding factors for tech development in each region.

The report is complimentary for Momentum Works’s community as well as friends in the tech ecosystem. You can download the report here.

In the meantime, take a sneak peek into some of the major insights from the report:

1. Parallels between Southeast Asia and Latin America

There are a lot of similarities between the countries in these regions. 

Interestingly, we can also pair some of the countries in both regions – notably Brazil and Indonesia. They both have similar-sized populations, abundant natural resources, and receive about 50% of the venture investment in their respective region.

2. Same top sectors in the regions but they have different development pathways

The major sectors in both the regions are the same – financial services, ecommerce, logistics etc. However, the difference arises in the percentage of funding received by each industry over the years, which impacts the development pathways. 

Multi-vertical businesses (super apps) have received the highest amount of funding in Southeast Asia since 2018. However, Latin American businesses prioritized vertical-focused models and are only just starting to expand into multi-vertical ‘super apps’.

3. Payment – Converging on the same market structure due to similar regulation

When it comes to payment, Southeast Asia took a scenic ride (if you know what we mean) in developing a myriad of e-wallets, while Latin America has largely depended on card networks such as Visa and Mastercard. 

We however see convergence as governments/central banks in both regions are trying to develop their own real-time payment schemes. 

4. Expansion: SEA companies are exporting Chinese models to LATAM

Southeast Asian companies like Sea Group (Shopee and Garena) aggressively expanded to Latin America and made a mark. There is a high chance that fintech companies in Latin America may eye Southeast Asia for their expansion plans. These are both parts of the broader global scheme of cross-regional spillovers in emerging markets. Watch out, people! There’s more competition headed our way. 

5. Our Perspective

We formulated a theory that defines the key indicators for the success of any business. This theory will give you an understanding of how the selected sectors (for this report) shaped up to where they are now and their prospects for the future.

To know more about what these key indicators are and how you can utilize them for your business, download a copy of the Southeast Asia & Latin America – learning digital emerging markets playbooks report here.

Feel free to reach out to us at [email protected] for any enquiries, questions and insights.