Latin America Startup Myths Busted by Maersk in 2024

There’s a ton of bad information about the Latin America market that causes people to build flawed strategies or just ignore the region entirely. Maersk’s recent analysis, though, gives us some real Latin America market startup insights that go against the grain, showing a picture with a lot more depth than most people think.

Myth 1: Latin America Lacks Adequate Digital Infrastructure for Scalable Startups

The idea that Latin America’s digital backbone can’t handle high-growth startups, usually based on old connectivity problems, is simply wrong now. We’ve seen a massive shift in just the last few years. Brazil and Mexico, for example, have poured money into fiber optic networks and 5G. The GSM Association (GSMA) projects that 5G connections in Latin America are expected to account for 30% of total mobile connections by 2028, a huge jump from only 3% in 2023, as they laid out in their “Mobile Economy Latin America 2024” report (GSMA). This push for high-speed internet isn’t just happening in the big cities either. Governments and private companies are wiring up secondary cities and even rural areas. On top of that, cloud adoption has just exploded. Big players like Amazon Web Services (AWS) and Google Cloud (Google Cloud) have built out their regional footprints with local data centers, which cuts latency to the bone and makes services far more reliable. This infrastructure means startups can build and scale complex apps without having to sink a ton of cash into their own servers. And being able to host data inside the country is a big deal for meeting compliance rules, which is non-negotiable for anyone in fintech or health tech.

Myth 2: Venture Capital Funding is Scarce and Primarily Foreign-Dominated

People often think LatAm startups are starved for cash or that any serious money has to come from Silicon Valley. While foreign investment is definitely part of the mix, the local venture capital scene is a powerhouse now. The Latin American Private Equity & Venture Capital Association (LAVCA) reported that VC funding hit a wild $15 billion in 2023, a 40% increase from the year before (LAVCA). What’s fueling this? A new class of dedicated regional funds, more corporate venture arms getting in on the action, and a string of successful exits that pumped money right back into the system. For instance, funds like Kaszek Ventures in Argentina and Monashees in Brazil have been raising huge rounds and putting that money to work in everything from fintech to logistics. These local investors just get it, they have a gut-level feel for the market quirks, the regulatory minefields, and what consumers actually want. That’s gold for an early-stage company. Their networks also open doors for partnerships and hiring. So the story isn’t about a lack of cash anymore. It’s about smart, strategic growth being driven by local investors who are building the next generation of regional unicorns.

Myth 3: Latin American Consumers are Reluctant to Adopt New Technologies

The perspective that Latin American consumers are stuck in their old ways and slow to adopt digital tools completely misses the insane speed of change we’ve seen since 2020. Data from eMarketer (eMarketer) shows e-commerce penetration in Latin America shot up, with over 70% of people in cities in countries like Chile, Colombia, and Argentina now buying online all the time. And this adoption goes way beyond just ordering stuff online. It includes digital payment systems, ride-sharing apps, and streaming media. The main driver has been the incredible smartphone penetration, even in lower-income groups. A mobile-first strategy isn’t a “nice-to-have” here. It’s how you reach almost everyone. Have you seen what Brazil’s Pix did for payments? It totally changed the game, proving that consumers will jump on new tech if it’s convenient and actually works well. The startups that are winning are the ones building great mobile experiences and plugging into these local payment methods, showing the market is more than ready for good digital products.

Myth 4: Regulatory Environments are Consistently Hostile to Innovation

The idea that Latin American regulations are a uniform, unstable mess designed to kill innovation is an old take. Sure, there are challenges, but many governments in the region have been actively writing policies to encourage tech growth and bring in investment. Mexico passed its Fintech Law back in 2018, which created a clear rulebook for financial tech companies and brought in a flood of investment. Colombia did something similar by creating “sandbox” environments where fintechs can test out new products with regulatory supervision. Then there’s Brazil’s General Data Protection Law (LGPD) from 2020, which is very similar to GDPR and provides a solid foundation for data privacy that helps build consumer trust. These laws aren’t just for show. They’re a clear signal that governments want to build a supportive environment for tech. The point is that regulation is evolving into something more balanced and predictable that lets you innovate while protecting customers. You still have to do your homework on the specific rules in your target country, but you can’t just assume it’s going to be a hostile fight everywhere.

Myth 5: Latin America Lacks a Skilled Tech Talent Pool

Another tired myth is that you can’t find good tech talent in Latin America and have to hire from abroad. This completely ignores the huge investment in technical education and the growth of a really strong developer community. Universities in big hubs like São Paulo, Mexico City, Buenos Aires, and Bogotá are graduating more and more people with degrees in computer science and data analytics. And outside of that, bootcamps and online courses have exploded, upskilling thousands of people in AI, machine learning, and cybersecurity. A company like Globant (Globant), which was founded in Argentina and became a software development giant, is proof of what the region’s talent can do, they scaled globally with a team that was mostly from Latin America. You get great talent that’s more affordable, culturally in-sync, and often in the same time zone as US markets. While you might have to hunt a bit for some very specific niche skills, the broader trend is a talent pool that’s expanding and getting more sophisticated every day, ready to power startup growth. Any startup entering the region should make local recruiting a core part of its plan. Look, the old stereotypes about the Latin America market are holding businesses back. Once you get past them and look at the data, you can see the genuine opportunities for building and expanding across the continent.