Many SaaS businesses have found it challenging to achieve steady, fulfilling growth in Latin America. Differences between consumer demands in each country, government laws, and currency restrictions make it hard to expand a SaaS product across borders in Latin America.
However, if you can work your way through this, your company will surely be rewarded. Latin America is a land of unexplored opportunities. Furthermore, with the proper knowledge and some dedication, you will be able to expand your business in no time. Are you ready to make it? EBANX can help you to succeed in Latin America.
Throughout this article, we will be fully discussing everything you need to know about the Software as Service in Latin America including big trends, values, growth rate, and the opportunity for B2B SaaS in Latin America.
SaaS Market in Latin America – Overview
The developing technologies, like AI or machine learning, coupled with increasing demand for SaaS solutions from end-user businesses are some of the major factors believed to help the expansion of the software-as-a-Service (SaaS) market in Latin America. The SaaS providers will deliver software apps through the internet and can be reached from a web browser or applications that have a built-in internet connection feature.
Furthermore, the lowering costs of SaaS services, along with a rising internet base in this region are the second key factors expected to contribute significantly towards the growth of the SaaS market.
You (as a SaaS provider) are responsible for the performance, protection and maintenance of the app on the server, which means that you will need to do your best to provide your customer with the best experience possible. Additionally, a lot of eCommerce businesses need help from SaaS to perform well and provide their customers with the very best. And with the major boost in the eCommerce section in Latin America, this might be just the right time to implement your SaaS in this country.
The SaaS market in Latin America is expected to grow at a comparable rate (with an annual growth rate of 25%) and reach $5.3 billion by 2022. Moreover, the solution definitely gained popularity with companies of all sizes. And most of the companies that are located in the U.S. have started implementing their solution in Latin America. According to the latest report, 60% of all the companies have now integrated at least some SaaS solutions into their services, and over 36% of the companies plan to move on SaaS solutions.
There are a number of leading SaaS businesses in Latin America and some of which are your competitors. See below a few of them!
Noteworthy SaaS Companies from Latin America
Below we have a couple of noteworthy SaaS companies that have bounced from Latin America onto the global scene, fast becoming strong international stars.
Pipefy is a cloud-based process management app that allows managers to create and execute any kind of workflow. Within a simple Kanban-style interface companies will be able to achieve process perfection without the need for special skills or professional services. The completely customizable platform helps organisations achieve higher levels of productivity and performance by setting clear goals for every step of each process. Pipefy was founded in 2015 and it’s now based in San Francisco, US.
It provides app solutions to help the technology companies manage Apple devices and make technology adoption easier. Their main aim is to redefine the idea of how mobile devices are used by the entire learning community. They cooperate with schools, universities and parents. They are based in Orlando, Florida and were founded in 2012.
Rocket.chat is an open-source messenger and task manager, which is a lot similar to Slack or IM. The ability to go beyond what companies like Slack already had to offer is what inspired the team at the Brazilian software company to build Rocket.Chat. After trying to integrate Slack into other existing products the company desired ways to not just invite users or create new chat rooms, but also make different sorts of users and chat rooms. This would let salespeople both chat with customers and to chat with each other. It was founded in 2015, and is now located in the U.S..
This is a global discovery app that supports companies that involve their workforce in physical activity by granting access to thousands of fitness facilities. Gympass offers unlimited access to the world’s biggest network of fitness and wellness providers including; gyms, yoga studios, boot camps, dance classes and more. It is now active in more than 13 countries worldwide and it engages over 30,000 fitness facilities.
These are only some of the fastest-growing SaaS businesses in Latin America. You shouldn’t have to fear them – rather analyze them and take every disadvantage to your advantage. Also, as you can see, all of them have a particular niche that targets one type of customer. This is quite smart because you will be mainly focusing on that area, therefore you would be able to easily target the companies that are searching for those particular services.
More people have access to the online world, which is encouraging the growth of video, streaming, and audio services in the region. Brazil takes the 9th position in the global SaaS market and 84% of Mexican companies are adopting cloud services.
Leading SaaS Businesses in Brazil
In the first spot, we have a pretty popular marketing platform that mainly targets small and medium businesses. RD Station helps brands launch and maintain a flexible customer extension and enables them to get better ROI on their digital ad expenses. This platform was founded in 2011 and has grown massively throughout the years. It helps more than 13,000 businesses in more than 20 different countries worldwide.
ContaAzul is a management platform that serves small businesses that are located in Brazil. The main centre of this SaaS business is to help companies with their accounting, banks, and invoicing processes. It was founded in 2011 and located in Joinville, state of Santa Catarina.
The Hi Platform is the biggest customer relationship software, which allows companies to establish better connections with their customers. It allows companies to see what other users are talking about on social media, automate customer service, and chat with people in real-time. Hi Platform is mainly centred on serving e-commerce, real estate, and financial fields. They were founded in 2017 in one of the biggest cities in Brazil – São Paulo.
Olist allows you to list your online business and it mainly focuses on helping eCommerce shops, retailers, and importers get a better placement. It is located in Curitiba and since the launch, it has gained more than 4,500 retailers who use this as the central marketplace.
This is a PCL Certified online payment app for recurring bills. Vindi is a really effective tool for companies that mainly focus on subscription payments, as well as other companies. It was founded in late 2013 and is based in São Paulo, Brazil.
Neoway is an app that mainly provides market intelligence providing businesses with worthy insights for their extension. They serve plenty of industries, including transportation, construction, oil, technology, banks, insurance companies, etc. It was founded in 2002 in Florianópolis, Brazil.
It’s one of the best content marketing providers in the Brazilian market, it serves thousands of customers daily. Rock Content allows customers to pick their own mix of services according to their particular needs. The content projects are then managed through Rock Content’s automated SaaS program. Writing only about marketing, Rock Content was able to grow its own blog to 2 million visitors per month, which makes it the most prosperous blog about marketing in Brazil. Rock Content was founded back in 2013.
It provides other businesses with straightforward and effective financial management. The main focus for Nibo is small and medium-sized businesses that need an improvement with their financial transactions. It was founded back in 2012 and is serving more than 55,000 active customers.
It is a leading transport app that allows you to get car booking services, which are available for personal and business usage. Founded back in 2012 it is one of the biggest e-hailing apps in Brazil.
The Superlógica app is designed with small service businesses in mind. It’s a management system for businesses based on recurrent payments, such as subscription model businesses, real estate, course, and education providers. They were founded back in 2001.
Leading SaaS Businesses in Argentina
With the assistance of Tienda Nube, entrepreneurs and small businesses that are based in Latin America will receive a comprehensive toolbox for starting their eCommerce sites. This app will allow businesses to set up, operate and spread their business online. Tienda Nube contributes to the increasing e-market in the region by enabling companies to cut down fees and boost sales. It was founded in 2011 and located in Buenos Aires, Argentina.
Avio provides customer AI solutions so that businesses will be able to provide their clients with the best experience possible. Their main product is AgentBot, which is an automatic app for omnichannel customer support. This is the most used app for virtual assistance and the most popular SaaS in Latin America and there are various brands using it including, Sony, Visa, Mastercard, Telefónica, etc. Aivo’s main focus is on sections like eCommerce, telecom, and utilities. It was founded in 2012 and based in Cordoba, Argentina.
Colppy is online accounting software that mainly focuses on smaller businesses in Latin America. This software supports multi-currency billing and automatic invoicing. With the help of Colppy, businesses will be able to operate more productively with their banks and accountants. This company was acquired by Nubox (leader in small business accounting software) in 2018.
It is a one-stop-shop for educational businesses. Wisboo allows you to easily create and set up any type of online course. The integrated platform allows easy scaling and the full set of tools to begin a training centre. It was founded in 2015 and is located in Buenos Aires, Argentina.
Leading SaaS Business in Mexico
It is an HR and payroll control system that targets the Latin American market. Runa HR was founded in 2017 by the Stanford alumni Courtney McColgan. This SaaS startup offers cloud-based solutions for handling employee salaries and data. Runa HR is mainly intended for small companies and is modified to meet all their HR and payroll requirements.
Leading SaaS Businesses in Chile
Beetrack is a delivery planning software that allows real-time control and monitoring of all their packages. The platform will help logistics companies in their everyday operations. It allows them to maintain delivery plans and timelines by filling them with data to improve decision-making. Some of the top-notch customers include Coca Cola and Ripley. They are located in Santiago, Chile and founded in 2013.
Ipsum is the producer of ProPlanner, which is an online platform that manages engineering and construction projects. This platform is based on Lean Construction methodologies and presents a collaborative ecosystem for engineers. Ipsum’s solution combines all stakeholders involved in projects, thus enhancing workflows and optimizing processes. It was formed back in 2014 and located in Santiago, Chile.
Airnguru offers pricing intelligence technology for airlines. With the help of Airnguru, all of the airline companies will be able to boost their earnings by perfect optimization and decrease flare filing mistakes. It is located in Santiago, Chile and founded in late 2015.
Leading SaaS Marketing Business in Colombia
Rappi is a marketplace that combines the buyers who want to purchase groceries, clothes, and practically anything with independent contractors who can accomplish those needs. They were founded in 2015, and they’re located in Colombia, Mexico, Brazil, Argentina, and Chile.
The big trends for SaaS Marketing business in Latin America
Overall, the Latin American eCommerce market is still improving, each country is different when it comes to shopping preferences and interests. Some of the biggest regions have expanded internet access to reach over 95% of the population. Here are a couple of trends for success:
– Personalization – By creating a unique experience for each buyer that comes to your site, you can improve loyalty, attract more followers, increase your sales conversion, and create advocates for your brand.
– Sustainability – Another big trend for SaaS businesses is to “Go green.” Sustainability isn’t a trend that is going to fade away anytime soon in any marketplace. Buyers of all ages are showing an increased interest in things that are friendly to the environment, and people have shown a willingness to pay more for them.
– AR (Artificial Reality)- One of the greatest barriers to online companies is the inability for buyers to try on products before they make the final purchase. AR services aim to assist shoppers to find precisely what they’re looking for by giving them virtual “try before they buy” experiences. All of the eCommerce stores equipped with AR services, such as virtual fitting rooms or makeup salons, have far more customer engagement compared to sites without these features.
– Social selling – A recent study showed that over 65% of the people that live in Brazil, Bolivia, Mexico, Ecuador, and Colombia use social media on a daily basis, and in Argentina and Chile, at least 76% of the population regularly uses social media.
The rising trends of e-commerce in Latin America are the things that have created opportunities for various sub-sectors of SaaS businesses.
The SaaS market in Latin American will grow at an annual growth rate of 24.79% from 2018 to 2023, an advantageous growth rate and one that reflects the early days of Silicon Valley. Although you should take care to research the specific needs of the country you plan to expand into, there are a couple of big trends for SaaS businesses in Latin America that will be extremely important for you.
Especially in the payments sector, for instance, complex API layers that can be built on top of existing infrastructure to further market competition.
Making a payment in Latin America can be really complicated and challenging for most buyers.
With this information in mind, there is a bright opportunity for savvy SaaS businesses that can offer alternatives to the current payment system. The growth of fintech as a sector in Latin America clearly shows the market’s desire for easy and efficient solutions to bridge the payment gap.
Product-Led Growth is another big trend that is occurring in Latin America. It is described as a go-to-market strategy, which relies on utilizing your product as the main thing to achieve and retain customers.
Various top-notch businesses are genuinely thinking about how to move to a Product-Led Growth Strategy. This will have a big impact on the existing sales and marketing plans of their companies. And it may be the perfect niche if your SaaS business offers these types of services.
Landing and Expanding
Landing and expanding is also a really big trend in Latin America, with a lot of Brazilian companies extending their range into Mexico and Chile.
There are also a lot of Brazilian SaaS businesses that are trying to avoid their fellow Latin American nations, setting their sights on the borders of North America. They are using various strategies to enter the North American markets, but one of the more interesting trends is market entry via acquisition.
One of the maybe more surprising trends is that a lot more local SaaS start-ups are expanding into the U.S. through Silicon Valley. A really great example of this is Rock Content, which made the decision to expand its services into Canada and America.
There are a lot of other SaaS like Mosyle, Pipefy, and Gympass that have all also taken this route. The nearly close time zones and small geographic distances seem to be the deciding factors in propelling these businesses into the U.S.
Today almost every company that’s in LATAM has followers on Social Media networks, but there’s still plenty of space to grow- most brands simply maintain basic activity. Keep in mind that most of the Latin Americans are Social Media addicts. So you can offer them solutions like live chat, chatbot, ads management, video producer, social messaging, etc.
Why Choose Latin America?
20 countries, each one with its own methods, decisions, rules, and regulations. All of this can make it really challenging to invest in Latin America. However, this doesn’t imply you should just give up on its huge potential. The financial revolution will be mobile and local with 70% of Latin Americans that have a smartphone.
After all, in order to succeed you will need to do your best but you won’t have to do everything on your own – EBANX is here to help!
Opportunities for B2B SaaS Businesses in Latin America
Because of the rapid growth of e-Commerce and the widespread adoption rate of digital transformation in Latin America, the local companies have been forced to react and to find the best technology that will assist them in improving their services.
Most international brands (Amazon, eBay, etc) are on the correct path through the digital transformation, that is why we didn’t mention them in the range of this article. Not surprisingly, a lot of the SaaS companies started out just like these brands and they managed to reach worldwide recognition.
SaaS is a growing market that is clearly growing exponentially. Customers from over the world are more engaged in subscribing to a service that will provide up-to-date software every month, rather than making a one-time purchase that will get outdated soon, and this is no difference in Latin America.
There are several ways in Latin American where all of the local players have a competitive advantage. Besides language and history, there is also the reward of market experience, which means that locals are better equipped to handle the regulatory environments of the region’s differentiated markets.
However, in SaaS, there are also a lot of opportunities, especially for outsiders. One of the best ways that B2B SaaS Businesses can succeed in Latin America is to have flexible payments, automatization, scalability, and accessibility.
The on-demand economy provides a great opportunity for entirely new business models, letting companies transition from small environments to international markets really fast.
According to a pretty recent study conducted by the consulting company, SaaS is the most common method to deliver cloud services nowadays, almost every business globally has adopted at least one of their services.
Invest in marketing localization
Marketing localization means targeting a specific area and marketing your service to that specific area. This includes investigating if the patterns, pictures, and fonts respect the tradition of your target audience. You will need to show your future customers that you are serious and that you are willing to invest in marketing localization.
Advertising and marketing in Latin America will require more than just translating your business ad into their language—you will need to be aware of the cultural differences. Your marketing team should do comprehensive research on your target audience’s culture and see what is the most suitable ad for them.
You’re greater off having the ad content transcribed by experts who speak the native language because this will make it a lot simpler for them to operate the cultural differences and social standards of the country you’re targeting. Remember, an ad in the United States might be unsuitable or offensive to your customers in Latin America.
To provide you with an example of this, all of the Western cultures see the white color as peaceful and elegant, whereas in China this is associated with death and worn only at funerals. Making any mistake and offending your customers will have a severe impact on your overall business growth and reputation.
The Software as a Solution (SaaS) you are providing deserves huge profits and a number of dedicated customers. However, assuring that buyers sign up and employ services from your business will take more than just a quality app and technical skills. In this case, the power of your customer support is considerably more important for the overall success of your company than you may think.
Customers can help you in the whole transferring process by identifying the location to route the customers for the proper assistance they need with their problems or questions. By making a great experience, your customers will be encouraged to continue the subscription of your services and this might even turn into long-term cooperation between your SaaS business and the customer. Companies are finding more and more that it is important to reflect the native language of the customer with native language speaking customer service reps. EBANX knows and understands this importance and has an added value for all their Merchants by offering customer support that accommodates multiple countries and each in the native language of those countries.
Furthermore, by improving your customer support you will get great referrals from your happy customers. Both individuals and companies who are happy with your product are more likely to suggest your SaaS company to other people that may be interested in the services you provide. You can also invite the clients to provide you with a review of their experience and inspire them to share those reviews on social media.
It will also help you deliver quality services. Every SaaS customer support staff must be educated and skilled at providing guidance in order to serve customers better. When the customer support deeply understands the app and is able to operate it like a pro, they can provide quality instructions each time. In order to be useful, customer support representatives must understand what customers are telling them and they should also be able to explain the whole process as easily as possible.
For this purpose, investing in the training of the support agents and ensuring that they are always up-to-date with the app program, technologies, business policies, and plans is necessary. They must professionally know all of the services that your company offers, so that they can accordingly advise the clients.
Offer flexible payment options
Another great thing that you can adopt in your transfer to Latin America is by offering flexible payment options. By providing the customers with the most suitable payment option they will be more likely to make the purchase. In the banking sector only, more than 70% of Latin America’s population is unbanked or underbanked, which means that you will need to provide other payment options.
As we mentioned, a big portion of Latin Americans don’t have a credit card, so retailers need to offer alternative payment methods to reach this vast population. E-wallets, voucher payments, and bank transfers are some of these preferred solutions. Here are the most used payment options used in Latin America:
Argentina Payment Methods
Despite containing the second-largest economy, only half of their population actually has a bank account and only a quarter of them actually use credit cards. Some of the most popular payment methods in Argentina include cash payments, credit card payments (Visa and MasterCard), and e-wallets.
In late 2018, more than 77% of all online transactions were made by using credit cards while 11% of all online payments were transferred through cash accounts. Now just imagine the companies that know this and offer Alternative Payments to their customers in Argentina.
Brazil Payment Methods
Next up, we have the Brazilian market. There are various payment methods in Brazil; however, some of the most popular ones are credit cards (Hipercard and Elo), PIX (an instant payment method which gained Brazilian’s hearts), cash payments (Boleto Bancário is perfect for merchants looking to make cross-border sales), debit cards, and bank transfers.
Based on the recent report by Banco Central do Brasil, about 80% of all the merchants that accept payment cards preferred the Visa brand.
Chile Payment Methods
Chile’s economy is a comparatively stable one, and with 90% of the adult population having a mobile phone and 74% owning a bank account, this is truly a promising area for cross-border commerce. The most common Chilean payment methods are local debit and credit cards (the local card providers such as Magna and Red Compra are extremely popular), eWallets for instance PayPal and local versions like ServiPag, and invoice/coupon payments such as Sencillito and MultiCaja.
Colombia Payment Methods
There are a lot of payment options in Colombia but some of the most common ones are credit cards and debit cards (Visa and Diners Club), eWallets (RappiPay, a local Colombian delivery app that allows you to pay with credit card), and invoice/coupon payments. Like many of their Latin American neighbors, Colombian consumers regularly use Via Baloto, a voucher payment system.
By the end of 2023, eCommerce sales in Colombia are expected to boost and generate up to $15.29 billion, which means that it will be a 360% increase in just two years.
Mexico Payment Methods
Despite having a pretty low bank account and smartphone usage, the Mexican e-commerce market is the one to keep your eyes on, particularly if you want to transfer your SaaS.
The COVID-19 pandemic made a huge jump in online shopping among Mexican buyers, and online giants like Alibaba and Facebook were actively investing in the area. Some of the most common payment methods used in Mexico are cash payments (Consumers are able to pay for online purchases at appliance stores), eWallets (PayPal, Masterpass, and Mercado Pago), Debit and Credit cards (both of these solutions are very popular online payment methods in Mexico).
Peru Payment Methods
This is surely one of the smallest eCommerce markets in the whole of Latin America but with a recent growth rate of 198%. Retailers looking for global growth would do well to succeed in this relatively untapped market.
Some of the best payment methods you can offer in Peru are debit and credit cards ( international and domestic cards), eWallets (PagoEfectivo is a local wallet that allows buyers to pay online with their online banking), and invoice & coupon payments (SafetyPay and Mobiamo are surely most common online payment methods in Peru).
While the opportunities in Latin America are more than great, such growth does not come without challenges. You will need to do your best in order to get a spot in the Latin American market.
Successful expansion into this market requires strategic planning, cultural awareness, and of course, a smart investment strategy, and EBANX can be a primary driver to that strategy.