Pets, Starting a Business, and a Profitable Startup
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Latin Americans own more dogs than everyone else
Chile’s entrepreneurial spirit
Uruguayan startup dLocal’s growth and profitability
Make sure you check out the comment of the week at the bottom!
Latin Americans are #teamdog. In fact, they love pets more than any other region, according to data from GFK. In Argentina and Mexico, more than 80% of people surveyed reported having at least one pet.
Mexico's relationship with furry friends extends to ancient times. The Xoloitzcuintle breed, Mexico's national dog, has been found in Mayan burial sites, dating its history as far back as 3,500 years. Mexico's love for dogs is not all positive, though. An estimated 15 to 18 million stray dogs are roaming the streets, which is roughly 70% of all dogs in Mexico — the largest population in any country.
Meanwhile, in Argentina, the country at the top of the list for dog ownership, only 14% of dog owners sterilize their dogs. Compare this to the US, where 80% of dogs are fixed, and there are thousands of shelters that protect them from life on the streets. Whereas that might seem like an attractive solution to fix the problem, it has its cost. It's estimated that out of the 3M abandoned dogs in the US each year, 920K are euthanized due to lack of space.
In Latin American culture, street dogs are embraced — or at least accepted as part of life. It’s not uncommon to see packs of them around the corner from the taco stands in Mexico City or the steakhouses in Buenos Aires, waiting for the cook to come and share the day’s leftovers.
If you're an entrepreneur and want to start a business in Latin America, Chile is the country for you. With over 158K new companies started in just 2020, the "country of poets" has one of the highest entrepreneurship rates in the world.
Over the last 30 years, Chile has evolved from a military dictatorship into one of LatAm's most prosperous nations. The country’s stability and relatively low cost of living have made it a prime destination for foreign investment and entrepreneurs, which is crucial for any region's tech sector. While Chile may not have the same levels of venture capital as nearby countries like Brazil or Mexico, it does have a robust entrepreneurial culture.
There are a few reasons why Chile has been nicknamed "Chilecon Valley." For one, the country ranks among the top in strong property rights, enforceable contracts, judicial system effectiveness, and government integrity; factors that make it easier to do business there. Additionally, Chilean companies enjoy some of the lowest levels of corruption and regulatory burdens in the region. This means that starting a business in Chile is relatively easy compared to other countries in Latin America.
What's more, Chile has been investing heavily in its startup ecosystem over the past few years. The government provides tax breaks and grants to startups while incubating them through accelerator programs like Start-Up Chile, which launched in 2010.
In the modern world of tech and startups, profitability is becoming a rarity. Often, companies are more focused on growing and taking up market share at the expense of solid financial health. Amazon is the classic example of the first tech company that took a while to become profitable and is now one of the world’s most successful. In the US market, a record-breaking 951 companies went public last year, which is more than twice the amount of the second-highest year, 1999 (the Dot-com bubble). Out of those 951, only 22% are profitable.
dLocal is an Uruguayan fintech startup proving that it’s possible to be profitable and grow in the tech world. It was founded in 2016 by four graduates from Universidad ORT, the country’s largest private university. In 2020, in a funding round led by General Atlantic, dLocal became the first-ever Unicorn out of Uruguay. That same year, it debuted as the first Uruguayan company to go public in the US, and all four of its founders became Uruguay’s first billionaires.
The company enables consumers in developing markets like Latin America to buy from international companies like Netflix and Amazon. It offers the infrastructure to simply connect any company with the often challenging and bureaucratic payment systems found in less-developed countries. dLocal then charges a fee for each transaction it facilitates — about $4 for every $100 processed.
In less than two years, the company has gone from processing $348M in payments to $2.1B per quarter; that’s 6x more volume. Along the way, the company has also increased its profitability, raking in $44M gross profit last quarter alone. Sadly for the company, its market cap hasn’t been as lucky; it’s down 65% from its all-time high of $20B. Still, its sustainable business model likely means it will survive the bear market and continue its mission to “enable global merchants to connect seamlessly with billions of emerging market users.”
Realize Latin America’s Potential 🚀
Hand-selected job opportunities based on what we know about our audience
This week’s opportunities:
dLocal is looking for a Payouts Analyst - Mexico, fully remote.
Requirements: Advanced Excel, fluent in English, basic SQL.
The company also has 80+ openings across the world. Even the executive team is spread out in Israel, Argentina, Spain, and the US.
SoftBank’s Group Operator School is open for Season 3! More than 20 Web3 and crypto executives will teach master classes on the foundations and applications of Web3. #SBOSWeb3 registration is open through June 19. Register here.
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That’s all for this week 👋
Comment of the week from Michelangelo’s David on Twitter, complementing our Russian Ruble currency chart:
Main factors in the stability of the Mexican peso: Interest rate differential, Rising commodity prices, International remittance flows, and Controlled deficit growth
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