With the rise of technology and digital transformation, the Software-as-a-Service (SaaS) industry has seen exponential growth in recent years. It is no surprise that Latin America is also catching up with the trend.
In this article, we will delve into the current state of the Latin American SaaS market, factors driving growth in the industry, successful SaaS companies in the region, comparison with other regions, and best practices for SaaS companies looking to expand into the Latin American market.
How big is the SaaS Market in Latin America?
Current State of the Latin American SaaS Market
In 2018, the market was valued at $2.7 billion and is expected to grow at an annual rate of 25%, reaching $5.3 billion by 2022, as stated in a blog post by EBANX.
The pandemic has also fueled the growth of SaaS, with remote work and e-commerce enabling software experiencing significant growth.
However, there are challenges faced by SaaS companies in the region, including differences in consumer demands, government laws, and currency restrictions that make it challenging to expand SaaS products across borders.
Factors Driving Growth in the Latin American SaaS Market
One of the significant factors driving growth in the Latin American SaaS market is the increasing demand for SaaS solutions in the region.
The rise of developing technologies and a rising internet base in the region have also contributed to the growth of the SaaS industry. Furthermore, the digital transformation and growth of e-commerce have played a significant role in the growth of SaaS in Latam. Venture capital investment has also helped fuel the growth of the SaaS market in Latin America.
In the next sections, we will explore success stories in the Latin American SaaS market, compare it with other regions, and discuss the best practices for SaaS companies looking to expand into the Latin American market.
Current State of the Latin American SaaS Market
Size of the SaaS Market in Latin America
According to a report by MarketWatch, the market is expected to grow at a CAGR of 24.79% during 2018-2023, with public cloud and HRM having the largest market shares. Brazil and Mexico are becoming leaders in the SaaS market, due to a maturing mindset about data-driven organizations, increased productivity, and IoT.
Recommended Lecture: SaaS Mexican Market
As mentioned earlier, the SaaS market in Latin America had reached billions of dollars by 2022, with a predicted annual growth rate of 25% as per a report by Research and Markets. In 2018, the market was valued at $2.7 billion and is expected to grow at an annual rate of 25%, reaching $5.3 billion by 2022, as stated in a blog post by EBANX.
Predictions for Growth in the Industry
Latin America presents a growing market for B2B SaaS businesses due to the rapid growth of e-commerce and digital transformation.
In an article by Latitud, Latin American SaaS startups are predicted to evolve drastically in a short period, especially those in segments with less global competition and more need for localized solutions.
The pandemic has also played a role in accelerating the growth of SaaS, with remote work and e-commerce enabling software experiencing significant growth.
Recommended Lecture: SaaS market in Argentina
Challenges Faced by SaaS Companies in the Region
Despite the growth of the SaaS market in Latin America, there are still challenges faced by SaaS companies in the region.
Differences in consumer demands, government laws, and currency restrictions make it challenging to expand SaaS products across borders
In a blog post by EBANX, it was recommended that SaaS companies looking to expand into the Latin American market should offer flexible payments, invest in marketing localization, and prioritize customer support. Assistance is also available for businesses looking to expand into the Latin American market.
Factors Driving Growth in the Latin American SaaS Market
Increasing Demand for SaaS Solutions in the Region
One of the significant factors driving growth in the Latin American SaaS market is the increasing demand for SaaS solutions in the region.
As stated in a blog post by EBANX, Latin America presents a growing market for B2B SaaS businesses due to the rapid growth of e-commerce and digital transformation. The rise of developing technologies and a rising internet base in the region have also contributed to the growth of the SaaS industry.
Digital Transformation and Growth of E-commerce
The digital transformation and growth of e-commerce have played a significant role in the growth of SaaS in the region. In a report by Research and Markets, the increasing adoption of e-commerce platforms is driving the growth of the SaaS market in Latin America.
This trend is expected to continue in the coming years, with the pandemic accelerating the growth of SaaS, as remote work and e-commerce enabling software experiencing significant growth.
Venture Capital Investment
Venture capital investment has also helped fuel the growth of the SaaS market in Latin America.
According to an article by SaaS Mag, venture capital is on the rise, with firms supporting local startups in the region. Brazil, in particular, has produced many unicorn companies in the past six months, indicating that the SaaS market in the region is maturing.
Challenges Faced by SaaS Companies in Latin America
Despite the growth of the SaaS market in Latin America, there are still challenges faced by SaaS companies in the region. In this section, we will explore some of the most significant challenges faced by SaaS companies in Latin America.
Differences in Consumer Demands
One of the significant challenges faced by SaaS companies in Latin America is the differences in consumer demands across the region. In a blog post by EBANX, it was recommended that SaaS companies looking to expand into the Latin American market should invest in marketing localization to address these differences.
Government Laws and Regulations
Government laws and regulations can also pose a challenge to SaaS companies looking to expand into the Latin American market. In a blog post by EBANX, it was recommended that SaaS companies should prioritize customer support to address any issues that may arise with local governments.
Currency Restrictions
Currency restrictions can also pose a challenge to SaaS companies looking to expand into the Latin American market. In a blog post by EBANX, it was recommended that companies looking to expand into the region should offer flexible payments to address these restrictions.
Local Problems
Local problems, such as variations in minimum salary and local governments, can also make it difficult to create successful SaaS deployment in the region. According to a report by MarketWatch, local variations in minimum salary and local governments pose a challenge to SaaS companies looking to expand into the Latin American market.
Recommended Lecture: Latam SaaS Startups and Companies
The Future of the SaaS Market in Latin America
The future of the SaaS market in Latin America looks positive, with continued growth predicted in the coming years. In this section, we will explore some of the trends and predictions for the future of the SaaS market in the region.
Evolving SaaS Startups
According to an article by Latitud, Latin American SaaS startups are predicted to evolve drastically in a short period, especially those in segments with less global competition and more need for localized solutions. This trend is expected to continue in the coming years, with more startups emerging in the region.
Increased Venture Capital Investment
Venture capital investment is expected to continue to fuel the growth of the SaaS market in Latin America. In a report by Research and Markets, it was predicted that venture capital investment would increase in the coming years, with firms supporting local startups in the region.
Continued Growth of E-commerce
The continued growth of e-commerce is also expected to drive the growth of the SaaS market in Latin America. In a report by Research and Markets, the increasing adoption of e-commerce platforms was identified as a major driver of the SaaS market in the region. This trend is expected to continue in the coming years, with more businesses moving online.
Challenges Remain
Despite the positive outlook for the future of the SaaS market in Latin America, challenges remain. As we explored in the previous section, differences in consumer demands, government laws and regulations, currency restrictions, and local problems can all pose challenges for SaaS companies looking to expand into the region.
In the next section, we will summarize the key points made in this article.
Latam SaaS Startups
Alephee
SaaS e-commerce – Pre Series A
Alephee helps companies with thousands of products, such as General Motors and Bosch, to increase their revenue in Latam, by listing their inventory on large e-commerce sites like MercadoLibre and Amazon and improve their B2B supply strategies.
Properix
SaaS Proptech – Seed
Properix empowers neighbors and gives scalability to Property Managers in one solution. With the vision of incorporating embedded finance and insurance into the homes of millions of latin american households.
Lara AI
SaaS HR Tech – Seed
Lara AI is an AI-enabled conversational interface that has frequent conversations with employees, gathers insightful information to improve their experiences in real-time, and builds a unique organizational culture. Additionally, we make people’s time more efficient by automatizing time-consuming tasks such as answering FAQs, managing tickets and requirements, and sending personalized communication to employees at key moments.
illow
SaaS Cyber Security infrastructure – Seed
illow helps companies to automate data deletion. Users request the deletion of their personal data and illow ensure the execution and control of the process. Grupo Nexpe ($NEXP3) is already our client and we are closing POC with Natura, WeWork and two big banks.
We are on a market that is projected to grow from $2.36 billion in 2022 to $25.85 billion by 2029, at a CAGR of 40.8%. We aim to be the Zapier of privacy building the biggest API library to delete data from third party apps. Founders:
Revai
SaaS HealthTech – Seed
Revai is a collaborative platform for doctors, patients and the healthcare industry. An ecosystem where all of them could enhance the generation and classification of the data, making anonymized data available for open research, while prompting citizens to become the ultimate controllers of their health data.
GetGloby
SaaS translation AI – Seed
«GetGloby is an AI-powered platform that instantly translates Ads Campaigns into 100+ languages with high performing results thanks to JAGA, our proprietary translation technology, which is capable of understanding the nuances of every market to adapt the original message.
Founded by former Googlers, Diego Antista & Juan Fusoni, GetGloby empowers brands to expand into new markets and improve their Ads performance in current ones, while significantly reducing their costs.»
Aument
SaaS AdTech for e-commerce – Seed
Aument is a SaaS marketing platform that helps small ecomm brands get new sales through multiple communication channels, easily.
Just 10 months after launch, +420 brands are using Aument to convert more visitors into customers, grew 12% WoW in September and we onboarded our first 52 paying customers.
We expect to hit 1000 brands by December 2022.
Maslow
SaaS HR Tech / Fintech – Pre-seed
Maslow is an HR-Tech company that is rewriting the story of compensation and benefits, by giving employees the flexibility to choose how they want to be compensated, getting a better value proposition, and making companies’ investment in talent more efficient.
Zenpli
SaaS onboarding for Fintech – Pre-seed
Zenpli is an infrastructure focused SaaS working on putting a stop to the KYC and fraud challenge in LatAm. Through 1-single integration, LatAm fintechs and other digital innovators seamlessly onboard more good customers by accessing best-in-class data across all domains and running accurate end-to-end identity decisions supported by advanced models that are hard to spoof.
We’re rolling our product with Mastercard in Mexico in Q4 2022 with the potential to generate ~500k in ARR over the next 12-months. We’re backed by The Fintech Fund, Ralicap, Amador, Newtopia and world-class angels and advisors from C-level and VPs at Socure, EPAM, Konfío, R2 and Bureau.id.
Eyecue
SaaS AI adtech Beauty – Pre-seed
We transform how brands and teams interact with data. AI-powered social and visual analytics that drive industry understanding and business success. Market: Social media analytics: a fast-growing (+35% CAGR) & fragmented market estimated to reach $15 bn in value by 2025. Business Model: SAAS Dashboard Access + Customer Success Manager.
Aimo
Ecommerce SaaS
Aimo turns conversations into an effective sales channel, helping ecommerce brands sell more on WhatsApp. We help retailers use data to make the most out of their conversations, engaging customers and increasing their conversion rates.
We are building a platform that integrates a CRM and automations with WhatsApp and ecommerce platforms, while keeping track of all the steps on a client’s digital journey. Aimo’s main goal is to digitize the assisted shopping experience.
To achieve this, we are building a saas platform that allows you to: – Automate conversational sales – Create marketing campaigns – Unify all your contacts and leads into one single CRM – Keep track of your WhatsApp chats.
Yerbo
SaaS Wellness / HealthTech – Pre-seed
Yerbo collects data from 2-min weekly surveys and translates mental well-being results into insights that help companies understand their team’s burnout risk, the causes and track evolution over time.
Menta Tickets – Web3
Is an Infrastructure blockchain solution for ticketing companies. With their API’s, companies will add a blockchain layer to their operations, in 30 minutes (not 30 months).
Where every ticket is transformed into an NFT, creating traceable and controllable NFtickets and allowing them to receive royalties from resales. Revenue Q4: $74k, with 5 pilot agreements for 2023 generating an expected revenue of 50k per month once we reach that product deliveries.
Bonder
Pre seed
Bonder helps B2B companies improve their new clients’ onboarding process. By creating an onboarding playbook and customer-facing onboarding pages for every new customer, Bonder’s clients can improve their time-to-value, reduce churn and create unbeatable first impressions.
How big is the SaaS Market in Latin America? Key Takeways
- SaaS market in Latin America is predicted to reach billions of dollars by 2022, with a growth rate of 25% per year.
- Some of the most successful SaaS companies in the region are Nubank, MercadoLibre, Gympass, and Despegar.
- We identified differences in consumer demands, government laws and regulations, currency restrictions, and local problems as some of the significant challenges faced by SaaS companies looking to expand into the region.
- Despite the challenges, we learned that the future of the SaaS market in Latin America looks positive, with continued growth predicted in the coming years.
How big is the SaaS Market in Latin America? Frequently Asked Questions
Who are the biggest players in the SaaS market in Latin America?
Nubank, MercadoLibre, Despegar, and Gympass are among the biggest players.
What challenges do SaaS companies face when expanding into Latin America?
Differences in consumer demands, government laws, currency restrictions, and local problems.
How fast is the SaaS market in Latin America growing?
The market is expected to grow at a rate of 25% annually, reaching $5.3 billion by 2022.
What is driving the growth of the SaaS market in Latin America?
Developing technologies, increasing demand for SaaS solutions, and a rising internet base.
What is the future of the SaaS market in Latin America?
Continued growth is predicted, with evolving startups, increased venture capital investment, and the growth of e-commerce.
How can SaaS companies succeed in the Latin American market?
By offering flexible payments, investing in marketing localization, prioritizing customer support, and navigating local challenges.
What are the benefits of expanding into the Latin American SaaS market?
The region presents a growing market for B2B SaaS businesses due to the rapid growth of e-commerce and digital transformation.
