Latin America’s startup landscape is undergoing a remarkable transformation. Secondary cities are now challenging traditional tech centers, reshaping the region’s innovation map.
This shift promises exciting opportunities for entrepreneurs and investors alike. A recent study by the Association for Private Capital Investment in Latin America (Lavca) analyzed new startups founded from 2022 through mid-2024.
It revealed a surprising list of top emerging tech hubs across the continent. Florianópolis, a Brazilian coastal city, leads with 31 new startups. Rio de Janeiro follows with 27, showcasing Brazil’s dominance.
Lima, Peru’s capital, secures third place with 26 new ventures. Uruguay’s Montevideo claims fourth with 22 startups, while Belo Horizonte rounds out the top five with 20.
Medellín, Colombia’s second-largest city, ranks eighth with 15 new startups. This growth demonstrates Medellín’s increasing appeal to entrepreneurs and investors.
The city saw seven startups emerge in 2022, six in 2023, and two in early 2024. Brazil’s tech ecosystem strength is evident, with five cities in the top ten.
The country reported 33,489 active startups in 2023, underscoring its robust entrepreneurial spirit. This shift towards secondary cities marks a significant change in investment patterns.
Shift in Investment Patterns
In 2023, emerging hubs accounted for 25.5% of new VC-backed startups in Latin America, up from 20.7% in 2022. Meanwhile, traditional powerhouses like São Paulo and Mexico City saw their share drop from 61.5% to 55%.
Several factors drive this trend. Improved digital infrastructure in smaller cities enables easier startup operations. The COVID-19 pandemic accelerated remote work adoption, allowing entrepreneurs to stay in their hometowns.
Quality of life and lower living costs in secondary cities also appeal to startups and skilled professionals. Florianópolis stands out as a prime example.
Despite its modest population of 540,000, it outperforms larger cities in startup creation and investment attraction. The city’s success stems from its unique blend of high quality of life, strong technical talent pool, and supportive ecosystem.
This trend towards secondary cities promotes more balanced economic development across Latin America. It opens up new possibilities for entrepreneurs beyond traditional tech hubs.
As these emerging ecosystems grow, they will likely shape the future of Latin America’s tech industry, signaling a more diverse and dynamic future for innovation across the region.
As these emerging ecosystems grow, they will likely shape the future of Latin America’s tech industry. The rise of these new tech hubs represents a pivotal moment for Latin America’s startup scene.
Download the study here.
More: Brazil news in English, every day from The Rio Times.
This article was produced by The Rio Times’ automated AI newsroom. Editorial responsibility: Matthias Camenzind, Publisher and Editor-in-Chief. The Rio Times also runs Ask Rio Times, which answers from 100,000+ of our own articles, the daily Latin America Power Map, and prediction-market odds on elections and markets.. How we use AI · Report an error
Living in or visiting Florianópolis? See this month's events and our Florianópolis city guide with rents, safety and upcoming concerts.
Brazil runoff, Sunday, October 25: Brazil runoff: date, poll closing times and when results start. Latest: Brazil runoff polls, Flávio 51%, Lula 49%.