Gaming a Sector to Watch in Latin America

This week the Microsoft Activision Blizzard deal was all the buzz given its $74 billion bid. Gaming is big business and emerging markets are making a large contribution to the space. According to Fortune, the global gaming market size is expected to gain momentum by reaching $545.98 billion by 2028, while exhibiting a CAGR of 13.20% between 2021 and 2028.

Until now the Latin American gaming market has been suppressed by chronic internet connectivity challenges which inhibit the growth of console-based gaming. Mobile and cloud-based gaming is beginning to rewrite this narrative positioning the region for significant growth. Strong mobile penetration and the development of better internet connectivity led Latin America to have more mobile gamers than the United States, according to Newzoo the leading global provider of games and esports analytics.

Why is there so much buzz about gaming? Well to start, the gaming industry is growing at a double-digit pace and generates a $7 billion of revenue in Latin America alone. Globally, there are approximately three billion gamers (more than one third of the population) and the revenues are already larger than the film and music industry combined. Gaming has proven itself to be a growth industry and its popularity during the Covid 19 pandemic as an escape from the reality in the masses, has added to its societal acceptance.

In Latin America, more than half of the online population – or over 273 million people across the region – play mobile games according to a study from Newzoo. This is over 40% of the entire population in the region and more than all gaming players in the United States (212 million). (NewZoo, LABS)

Fintech Continues to Attract Most VC Funding in 2021

Global venture funding reached a record $621 billion in 2021, according to the CB Insights 2021 State of Venture Report. That’s more than double 2020’s total of $294 billion.

In 2021, global fintech funding jumped to a new record of $131.5 billion across 4,969 deals. That compares to $49 billion across 3,491 deals in 2020. As you can see, the pace at which capital was invested into fintech startups in 2021 grew much more rapidly than total deal count, leading to larger rounds on average. The CB Insights data that we’re citing here also helps put the pace of fintech investing into context compared to its peer startup groups, with financial technology companies raising one in every five venture capital dollars last year, or some 21%.

Source: CBInsights

The fevered pace at which fintech startups attracted external capital continued. In the fourth quarter of 2021 fintech funding reached $34.9 billion, second only to Q2 2021 which saw funding total $36.6 billion. Deal flow was similar at 1,256 in Q4 compared to 1,224 in Q2.

To make those numbers a bit more understandable to our monkey brains, in the fourth quarter inclusive of weekends, holidays, and other non-working periods, some 14 fintech deals were announced every day, worth $387,777,777.

The fintech venture market is so big that its outlines mirror those of the venture capital market itself. As an example, the United States led fintech funding in Q4 as it did in total venture capital dollars in the year. The U.S. invested $18.2 billion in fintech, whereas Asia invested $8.2 billion, and Europe $5.6 billion. Latin American funding is catching up, coming at $1.9 billion placing it fourth place globally.


Chile Assets Rally Ahead of Finance Minister Announcement

The Chilean peso is the best performing major currency in the world this year gaining 5.2%, while the benchmark IPSA stock index has rallied 9.2% in dollars. Markets are pricing in the strong potential for President-elect Gabriel Boric to name a fiscally prudent finance minister as he continues to build bridges. The current central bank President Mario Marcel and former regulators such as Guillermo Larrain would most likely be positively received by investors. Many market participants view the rebound in Chilean assets as similar to what happened in Peru. Initially, the markets were bearish following the election of President Pedro Castillo followed by a strong rebound when Castillo’s reforms faced challenges in congress.


Source: Bloomberg

Andean Lithium Producers Explore Consortium

Argentina, Bolivia, Chile and possibly Peru are evaluating the idea of creating an association of lithium-producing countries that will function like the mineral’s OPEN for the region.

Prospects of a development have gained momentum following Gabriel Boric’s presidential victory in Chile now that all governments will have similar leftwing ideologies.

In March last year it was reported that Former Argentine Foreign Minister Felipe Solá had discussed the idea with Bolivian authorities as lithium is essential for the production of batteries for electrical vehicles. Solá was quoted saying that “We are going to be very serious, and we are going to collect the experience of Bolivia, debating among ourselves, and then making decisions that hopefully we can implement together.”

Bolivia is the country with the largest lithium reserves in the world with 21 million tons, above the 14.8 million tons of Argentina and the 8.3 million tons of Chile. Outside of Latin America, only China and Australia have lithium reserves.

Due to its status as a non-renewable resource and the strong growth in global demand due to the drive to create a greener economy, lithium has managed to remain stable in the face of fluctuations in international commodity prices. Analysts foresee that Bolivia, Argentina and Chile could regulate the international market for this mineral.


Source: Benchmark Mineral Intelligence
Info-graph: Sandeep Wasnik | Latin America and the Caribbean Countries Market Expert

SpaceX and Brazil’s Pion Labs Liftoff

Pion Labs has developed a picosatellite among the 105 satellites carried by Elon Musk’s company. “This is a milestone for Brazil,” Paulo Barros, director of portfolio management at the Brazilian Space Agency. (AEB)

The Falcon 9 rocket of the private company SpaceX launched Thursday from Cape Canaveral (U.S.) carrying a small satellite developed by the Brazilian startup Pion Labs into orbit. (Brazilian Report, Rio Times)

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