It’s great to have an idea. It’s great when people develop those ideas. It’s great when people use the stuff that people develop. And it’s great that entrepreneurs can make money doing all of this, delivering value to consumers.
All that is happening in Latin America now. Ideas are being had. People are making companies that consumers are responding favorably to, and entrepreneurs are making money. And capital is starting to flock to Latin America from parts further afield in search of great new companies that will give them a 5x or 10x ROI. All that is fabulous. But there is one trait of developed markets that Latin America hasn’t seen much of yet: acquisitions.
In more developed markets, it is not uncommon to see companies acquire competitors in order to take advantage of market synergies or simply dominate a market. That is a fairly rare occurence in the tech scene in Latin America. But then last week, the Brazilian company Elo7 acquired the Argentine company, Bixti. Both companies were essentially copies of Etsy, the US-based community for selling handmade products, and it makes sense that a Brazilian company would want to get into a neighboring market through acquisition. Moreover, this acquisition will allow Elo7 to hit the ground running, without having to build its user base organically. And of course, the main reason for many acquisitions is that it allows the acquiring company to take advantage of the intellectual talent of and property created by the employees of the acquired firm.
What’s particularly notable about this, though, is that both companies are products of startup accelerators and venture investors. Elo7 received funding from Accel Partners, Monashees Capital and Insight Venture Partners, while Bixti came from NXTP Labs, the Buenos Aires-based accelerator.
That is a big deal. I’m sure it’s not unprecedented, but it certainly is one of those road markers that tells you the startup ecosystem is developing to a level that can start to compete on a global basis. Granted, Brazil and Argentina, along with Chile, have the most developed startup cultures and tech-savvy markets in Latin America, but I expect to see this type of thing happening with increasing frequency in places like Mexico and Colombia as well. And that is a very good thing indeed.
Via The Next Web.