The Latin American region is ripe with commercial opportunities these days. As national governments focus their efforts on economic growth and attracting foreign direct investment, business opportunities, international partnerships, and industry innovation and invention flourish. Naturally, with more opportunity and ingenuity coursing through the veins of Latin America’s economic body, more and more startups arise. Argentina has always been one of the region’s strongest economic players. Now, startups in Argentina are getting a lot of attention too. With a handful of progressive, forward-thinking cities supporting entrepreneurial ambitions, Argentina has a solid foundation on which to grow startups and companies on a national scale. Already, the country has seen success with a few startups. The future of the country and this industry are bright, so long as business and innovation remain a priority.
Supportive economy for startups in Argentina
Argentina’s economy is one of the strongest in all of Latin America. With a GDP of $519.9 billion, the country is historically known for being one of the world’s wealthiest nations in the early 20th century. Strong industries and bountiful access to natural resources helped sectors like agriculture and mining thrive. However, through political struggles and international crises, Argentina’s economy suffered substantially. This made it so startups in Argentina were something hard to come by for quite some time. Looking forward though, the country is shooting for positive growth. Unfortunately, Argentina was impacted greatly by the global pandemic of 2019 and 2020. Fortunately, in 2021, economists are projecting the nation will bounce back, growing 5.2%. This shows an impressive resilience on the part of the Argentinians and their economy. The same resilience that is common in forming and running a startup.
Aside from a resilient population and economy, Argentina is also heavily connected internationally. The country is part of the G-20, an international collection of governments and central banks from nineteen different countries and the EU. Every year, the countries’ representatives meet to discuss economic, financial, and global matters like terrorism and workplace equality. And while the G-20 is not an official organization like the World Trade Organization, membership to this group can be just as important. The decisions and alliances made in this group greatly impact formal institutions like the WTO. Together, the members of the G-20 account for 80% of all economic output, 75% of international trade, and 66% of the world’s population. Argentina’s participation in this exclusive group plays a key part in its economic success and international partnerships. Startups in Argentina benefit greatly from having an advocate within the G-20.
Best industries for startups in Argentina
Argentina has quite the portfolio of impactful and successful industries. While these industries are the country’s biggest and/or most successful, they are still looking for innovation and improvements. The national sectors listed below provide ample opportunity for entrepreneurs and startups in Argentina to flourish.
Agriculture is one of Argentina’s most successful industries. The country is famous worldwide for grapes, wine, corn, and especially cattle-related products. Agriculture makes up for over 9% of the nation’s GDP.
So which agricultural product has the highest international demand? The country’s soy industry takes the title, making up a quarter of total agricultural exports. Argentina experiences high demand for their cattle-related products too though. Beef, leather, and dairy products are highly sought after in the global market, and demand for these products to be specifically from Argentina is very high. Overall, Argentina’s agricultural industry is ripe with opportunity across so many different plains. There are seemingly endless options and sectors within the industry for one to focus their business efforts on.
Startups in Argentina show great potential in the agricultural industry. Already, Argentina is becoming famous for successful regional agtech startups. Two of the country’s biggest agtech startups were purchased just in 2018 by John Deere. As one of the world’s biggest manufacturers of agricultural and forestry machinery, John Deere’s buy-in to the Argentinian startups meant a great deal for the sector. Increasing international attention and monetary interest can give small startups the boost they need to really make an impact.
Moreover, as international interest in agricultural startups in Argentina grow, the government is focusing in on the industry too. The Agencia Argentina de Inversiones y Comercio Internacional, a government organization, created what AgTech Week. Every year in August, this organization, along with industry leaders, farmer associations, investors, and entrepreneurs lead a discussion on how to continue progressing in the sector. They focus on fostering innovation, invention, and ingenuity in Argentina’s agriculture sector. This focus greatly benefits startups in Argentina looking to get their foot in the door.
Natural resources & mining
Argentina also has incredible access to valuable natural resources. Because of its rich access, mining accounts for a large part of the country’s GDP as well. Mining in Argentina includes recovering natural resources like coal, copper, lead, magnesium, silver, lithium, gold, and other valuable metals. The industry makes up well over 4% of the country’s GDP alone. In fact, in 2010, metal ore exports alone brought in over $3 billion. As the number of access points grows, so does the opportunity for higher exports. The industry as a whole is looking for invention and improvements. New technologies, strategies, and equipment are in high demand amongst mining companies to make work safer, easier, and faster.
The mining and natural resources sector pose great opportunities for startups in Argentina. Given the country’s rich access to highly commoditized resources, the international market is incredibly interested in the industry and any big players involved. Given that only around 15% of Argentina’s resources have been excavated, there is great opportunity in the near future. International companies and governments are willing to pay a lot to get in on the action. Startups in this sector can leverage the international attention when making a business deal. So long as the startup employs a new, unique, and innovative strategy and/or technology, it has the potential to become an industry leader.
Aside from developing new technologies and techniques, there is also a great deal of attention on sustainability practices and ‘green’ mining. Argentina is one of the world’s best practitioners of sustainable mining. While it may seem that this market is already satisfied, there is always opportunity to improve. The country places great value on its efforts to practice environmental sustainability. Any startup within this sector that further employs these values should be successful, both nationally and internationally.
Finally, Argentina has an excellent global reputation for its B2B services industry. Accounting for over 60% of national GDP, the services sector is incredibly successful in Argentina. While this figure includes both B2C and B2B service industries, the nation’s strongest and biggest players serve other businesses. Sub-sectors like FinTech, telecommunications, corporate, and e-commerce are some of the biggest providers to the services industry as a whole. Such a diverse palette of opportunity in Argentina’s B2B services industry makes innovation, invention, and successful startups appear to be within reach.
Startups in Argentina pursuing the B2B services industry have a fair amount of competition to beat out. However, the government is focusing on fostering this industry’s ever-evolving attitude. Thus, B2B services startups should have formal, institutionalized support from the national government. In 2017, Argentina’s government passed the Entrepreneurship Law, which aims to lower the bureaucracy of the startup process and grant incentives to investors wishing to support said startups and thus, the Argentinian economy. Opportunities within software development, artificial intelligence, FinTech, and telecom are what the Argentinian government is focusing on right now. With the right background, resources, and creativity, any startup in Argentina pursuing the B2B services industry should realize success.
Learn more about startups in Argentina and Latin America
Startups in Argentina have come a long way and the entrepreneurial spirit of the country has survived years of economic hardship. Now, with a bright future ahead, Argentina looks to foster innovation and startup growth throughout the country. To learn more about the vast opportunities for startups in Argentina, and all throughout Latin America, stay in touch with The StartupVC. Our accounts on LinkedIn, Facebook, Instagram, and Twitter provide up-to-date information on current events, industry highlights, and emerging trends within the region.