How digital transformation is increasing the demand for SaaS solutions
The Latin American market has shown to be very promising for SASs solutions. This was mainly due to the growth in ecommerce traffic in the region between the first and second quarter of 2020, increasing by more than 150%.
Furthermore, the number of people with internet access has never been higher in LATAM, which has led to the growth of many technology businesses, especially the software as a service (SaaS) industry.
As said, COVID-19 has boosted financial and digital inclusion, forcing companies to adapt by expanding their ecosystems to find new partners. This has created new growth opportunities for the SaaS market as the demand for their services has increased exponentially.
“The pandemic showed that companies that had already embraced digital transformation are surviving much better, even under pressure. However, managers realized that innovation cannot just be internal; it is necessary to extend it to their ecosystems”, said Ricardo Villate – IDC Group Vice President for Latin America – when interviewed by Bnamericas.
The current scenario in LATAM
According to a survey by MarketWatch, the Latin American SaaS market has been growing at an impressive pace (CAGR of 24.79% from 2018 to 2023), which is even higher than in the United States.
Brazil and Mexico are quickly establishing themselves as leaders in SaaS, while the market of Chile, Colombia and Argentina, despite having grown a lot in the last two years, are still noticeably well behind the Brazilians and Mexicans.
São Paulo, the hub for unicorn startups
São Paulo is the city that hosts 50% of the SaaS business in Brazil, being the center of this ecosystem. The region is full of talents that are becoming true experts on the subject, gaining recognition worldwide.
It's only the beginning
Apparently, the future is very promising and the evolution of SaaS in Latin America is just beginning. Over the next few years, more and more tech companies will achieve higher valuations, and as a ripple effect, this demand will return to the SaaS tools that are used to grow their brands.
If you are a SaaS brand looking for new customers in this region (taking advantage of the heat of the market), making sure your product is affordable and attainable is imperative. That means, for example, making the payment of invoices available in your customer's local currency.
SAS companies that are able to capitalize on this momentum by investing in expansion into Latin America have a golden opportunity to gain huge market share in the coming years.