This document summarizes recent economic trends and outlook for the Latin American internet market. It finds that Latin America is experiencing strong economic growth fueled by increasing foreign direct investment, high commodity prices, and rising domestic consumption. This growth is driving a boom in the internet sector, with rapidly expanding internet penetration, e-commerce sales, and digital advertising spending. While Brazil dominates the region's online activity currently, other countries like Mexico, Argentina, Colombia and Peru are also seeing their internet markets grow quickly. The document concludes that Latin America represents a major emerging market opportunity for internet and technology companies.

1. 2013 Latin America
Internet Market
Research & Outlook

2. Latin America: A Rising Economic Power
November 2009 September 2010 November 2012

3. Latinos are not only an economic force
but now also have political power

4. The time is NOW: Consumers are here today
• Per capita disposable income: $5700 (2.5 X China, 4.5 X India)
Source: Alta Ventures

5. What is fueling this economic growth?
External Factors
(Low interest rates and QE wars)
1. Foreign Direct Investment (FDI)
- Experiencing record levels - $150 bn in 2012
2. Commodity prices are at all time highs

6. Foreign Direct Investment in Latam
Source: The Economist

7. Latam's commodities are at an all time high,
thus helping exports.
Source: http://www.indexmundi.com/commodities/

8. As a consequence...
VC investors are looking at LATAM now.
“Latin America is cited by 55 percent of VCs as an
area of increasing U.S. investment in 2013 followed
by China (40 percent) and India (37 percent).”
Dow Jones and the National Venture Capital Association Survey (December 2012)

9. Internal factors helping growth...
That Boost FDI flows:
• Unprecedented Political Stability
• Economic Openness
• Fiscal prudence
That heat up the market:
• Record LOW unemployment numbers
• Low interest rates: Easy Credit for consumption.

10. Strong optimism of Latin American Businesses
4 of top 10 countries most optimistic about biz in 2013 are in LatAm. Peru (#1),
Chile (3), Brazil (6), Mexico (8)

11. Latin America will continue growing at
higher rates than developed economies...
Source: IMF World Economic Outlook

12. Top Latin American economies will
continue to show strong GDP growth
Country 2012-2015 GDP Growth (PPP)
Peru 24.26%
Chile 19.40%
Colombia 19.08%
Brazil 17.92%
Argentina 16.25%
Mexico 15.55%
Venezuela 14.78%
Source: IMF World Economic Outlook

13. Latam: Strong outlook, but many
challenges lay ahead... that means
countless opportunities ;)

14. Latam is hard to scale and it's very costly...

15. Latam is hard even for the big guys...
Figures December 2012

16. Currency Appreciations... Brazil is getting
TOO hot!
Note: figures in USD - Dec 2012 Source: The Economist, Apple, Honda and Colliers Intl

17. There are big differences between countries.
Ej. Brazil and Chile.

18. Latam is huge, but ecommerce is concentrated in Brazil

19. Latam is one of the most promising emerging
markets in the global online industry

20. Latam's comparative advantage to other
Emerging Markets

21. Latam's Internet population more than doubled
in the last 5 years
2007-2012 Internet Population Growth
Source: Internet World Stats

22. And Latam’s Online Population
is far from saturation
Internet penetration in South
America is still relatively small
Online Populations of Latam will
boom with increasing internet
penetration
Source: Internet World Stats December 2012

23. Number of Internet Users in Latam
Source: Internet World Stats

24. Latam: more mobile phones than people
According to Informa Telecoms & Media, Latin America reached more mobiles than people in 2011.
Prepaid represents over 80%

25. Latam’s e-commerce is taking off...
x11 increase in 10 years!
Source: eMarketer

26. B2C e-commerce sales in Latin America
It’s not a matter of size…
It’s about development
• Infrastructure
• Technology adoption
• Supply of goods and services
• Buying patterns and cultures
• Banking and credit card
penetration
Mobile e-commerce: 2012 3% of total e commerce transactions
were complete via a mobile device

27. Brazil is leading the way
Largest and most advanced market in the region
E commerce => 2012: $19.8 bn - 2015: $29.8 bn 50% Growth
Online buyers => 2012: 23.1 M - 2015: 31.6 M
It will account for +50% of total B2C e commerce sales in LatinAm by 2013
According to IAB Brazil, digital advertising grew 40% in 2012 and is
expected to grow another 80% over the next 3 years.
Source: eMarketer
http://www.emarketer.com/Article/Growth-Argentina-Mexico-Drives-Ecommerce-Latin-America/1009339

28. Credit Card Penetration
Brazil is the clear leader, but it’s still far behind penetration in developed countries

29. Latam Digital Advertising still far behind US
and Europe, but booming
Online ad spending will more than triple over the next five years, growing from $2 billion
in 2010 to $6.7 billion in 2015. (eMarketer)
Source: eMarketer
http://www.emarketer.com/Article/Emerging-Markets-Drive-Worldwide-Total-Ad-Spend/1009216#1uz7SX3F9DrDER9O.
99

30. Online Ad Spending Still Accelerating in Mexico

31. Mobile Marketing is still in infant stages
but showing strong signs of growth
Source: eMarketer
http://www.emarketer.com/Article/Worldwide-More-Money-Goes-Mobile/1009582

32. Mobile Marketing is still in infant stages
but showing strong signs of growth
Source: eMarketer
http://www.emarketer.com/Article/Worldwide-More-Money-Goes-Mobile/1009582

33. Mobile market: very different realities in each country
Source:icrossing
http://connect.icrossing.co.uk/wp-content/uploads/2012/02/iCrossing_Mobile-marketing_2012_V2.gif

34. Latam's Internet User Profile: Highly Active
Average usage in Brazil, Mexico, Argentina, Colombia outpace global average
Source:comscore

35. Latam's Internet User Profile: Younger Audience
15-24 year olds in Latin America are the heaviest Internet users, outpacing every
other age group as well as the global average for the age group
Source:comscore

36. Latam's Internet User Profile: Social Network #1 Activity
5 of the most engaged countries in the world for social networking
are in Latin America
Source:comscore

37. Latin America has a flourishing Tech
Ecosystem that is speeding up.

38. Accelerators and Incubators Boom in Latam
Start Up Chile: Government program to attract world-class early stage
entrepreneurs to Chile
21212: Accelerator looking for entrepeneurs that can replicate proven
business models in Brazil
NXTP Labs: Startup accelerator focused on Spanish-speaking Latin
American technology companies
Startup Farm: Biggest startup accelerator in Brazil with over 100 accelerated
startups
Wayra: Telefonica's seed-stage startup funding arm, with presence in 13
countries in Latam and Europe
Founder Institute: Early-stage startup accelerator and global launch
network with offices in Colombia, Peru, Mexico and Brazil
Aceleradora.net: Founded in 2008 to back startups with management and
seed capital in Brazil.

39. Private Equity and Venture Capital
Investments Rise in Latin America.
$7.9 billion committed in 2012 (21% over 2011)
Some examples:
● Dafiti raises $45 million in August (JP Morgan) and $65 million in
December (Quadrant Capital)
● WPP acquires 20% of Globant for $70 million USD
● Navent raises $30 million from Riverwood Capital and Tiger
Global Management
● Baby.com.br raises $16.7 million from Accel Partners
Source: Latin America Private Equity
and Venture Capital Association

40. Increasing interest from US & European
investors
● July 2012: Redpoint e.ventures raises $130 million fund for Brasil
● August 2012: Mexican.vc bought by 500 Startups
● August 2012: Alta Ventures raises $70 million fund for Mexico
● September 2012: Amerigo (Telefonica) $378 million fund for Latam

41. Latam Vibrant tech community is fueled by
great events and organizations
Events
● Redinnova Sao Paulo http://www.redinnova.com/sao-paulo
● Founders Forum Rio http://foundersforum.
eu/content/events
● e-CommerceDay http://www.ecommerceday.org
● TNW Conference Latin America http://thenextweb.
com/conference/latinamerica
Organizations
● Endeavor: http://www.endeavor.org
● EO: http://www.eonetwork.org

42. Some great tech/startup blogs to follow in Latam
● The Next Web http://thenextweb.com/la
● PulsoSocial http://pulsosocial.com
● Uberbin.net http://www.uberbin.net
● Startupi http://startups.ig.com.br
● Webholic http://webholic.com.br
● ALT1040 http://alt1040.com
● Loogic http://loogic.com

44. Fnbox is a Latin American technology company
focused on creating, accelerating and scaling
Internet businesses
• Started in 2002 with offices in Sao Paulo, Mexico and Buenos Aires
• 6 active portfolio companies & 95 talents
• Raised $6million in 2008 from VC Dn Capital, Fabrice Grinda,
Martin Varsavsky, Jose Marin, Romero Rodrigues...
• Great Place to Work – 08, 09, 10, 11 and 12

45. We made this presentation to:
•Share the knowledge
• Share our experience
• Shameless promotion of Fnbox and businesses ;)
Gustavo Victorica Rodrigo Teijeiro
CFO of Fnbox.com CEO of Fnbox.com
@jotecito @rodrigoteijeiro
Gustavo@fnbox.com Rodrigo@fnbox.com
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