Home to 63 fintechs, Uruguay is positioned as a South American leader in technology startups nurturing. Known as the “Silicon Valley of South America”, the country has favorable banking regulations, a skilled workforce and several other incentives. Uruguay celebrates its first unicorn, dLocal, valued at more than $15 billion.
The country has exceptional connectivity and Internet penetration. Fixed broadband access reaches 85% of the houses (Internet via optical fiber or ADSL), of which 75% have optical fiber access with download speeds ranging between 30 and 120 Mbps.
The key is the country’s connectivity investment, which allows that, after an investment of U$600 million in optical fiber, the internet reaches 80% of the houses with good speed and an accessible price.
Uruguay is one of the leaders in the adoption of the IPv6 protocol (eighth in the world and first in Latin America, second in the Google IPv6 country ranking). Furthermore, it is the first country in Latin America to start the deployment of a 5G commercial mobile and the third in the world.
In April 2019, the state-owned telephone company ANTEL, together with the Nokia brand, dropped operations and lists to provide services to the first 5G bases in areas of the Maldonado and Colonia departments (Speed Test).
The country’s public policies for education allowed a high literacy rate: education in Uruguay has no cost for families and is compulsory for children up to age 14 (State University).
Uruguay Shines as Software Exporter
Uruguay is a strong exporter. It is the largest per capita exporter of software in South America and the third in absolute terms. In recent years the sector has shown a strong dynamism, growing much on top of the rest of the economy (Uruguay XXl).
Uruguay’s technology sector has also been aided by U.S. markets and tech exchanges, such as the visionary domestic programs such as “Plan Ceibal” in 2007, conceived by the Massachusetts Institute of Technology (MIT) Media Lab and Media Lab founder, Nicholas Negroponte, along with other MIT members.
Ceibal promoted nationwide digital literacy and provided a laptop to every public-school student in the country, and investments in some of the fastest internet in the Americas. This helped Uruguay become the largest software exporter per capita in the region and third largest per capita exporter in the world (CEPAL).
The results achieved by Latin American countries amid a catastrophic global pandemic are impressive. Venture Capital pushed the region’s digitalization and the rise of new unicorns. The payment startup dLocal raised $200 million in a round led by General Atlantic, becoming the first unicorn from Uruguay (Bloomberg).
US Plays Strong Role in Uruguay’s Tech Revenue
The United States accounts for 65% of Uruguay’s tech revenue (as of 2019) – the result in part of the marketing and relationship-building by Uruguay XXI, the country’s investment, export, and country brand promotion agency.
The agency annually sets up a country pavilion at TechCrunch Disrupt, one of Silicon Valley’s most important tech conferences. U.S. ventures in Uruguay have also played an important role in building the local tech market and providing capital and opportunities for local software developers.
Major U.S. software and IT companies, including IBM, Microsoft, Cognizant, New Context, NetSuite, and VeriFone, have established bases in Uruguay and hire Uruguayan developers.
In 2017, the National Agency for Innovation and Research (ANII) arranged for the highly recognized U.S. tech incubator 500 Startups to run a six-week accelerator program to build skills for 20 Uruguayan Startups focusing on growth, product design, fundraising, and building connections. Source: US State Department.
Also check the interview which Peter and Dayse gave to a Brazilian radio about the general outlook from the tech market: bit.ly/entrevista-peter-dayse (Interview in portuguese).
Uruguay inks Cooperation Agreement with Startups in São Paulo, Brazil
Startups from São Paulo aim to penetrate Uruguay’s market. An agreement between São Paulo Negócios, the municipal investment promotion body and the Uruguayan Chamber of Information Technology resulted in a first round of investments in September 2021.
Leonardo Loureiro, president of the Uruguayan Chamber of Information Technology (CUTI), who provided much material for this article, works with local and global organizations, developing self-financed projects, some supported by multilateral organizations or development agencies. Mr. Loureiro was responsible for the development of various business lines in markets such as Brazil, Mexico, Europe, Central America and the United States.
A round of investments should contemplate Startups classified as Series B, which still have to solidify in the market and are in the expansion phase of two businesses.
The Uruguayan government will also be a partner of the São Paulo Tech Week festival, which goes through a remodeling to focus on networking and businesses. The 2021 edition is scheduled to take place between 22 and 26 November 2021.
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