Alright, let’s set the scene: The good ol’ days when investors were happily chucking money at cool-sounding projects are history. Now, investors want proof before they part with their dough.
The buzzkill? A cocktail of economic recession, Covid-19 overhiring, high-interest rates, AI roll-outs, and the tech world growing up.
There was a time when money was flowing like water. Since last year we’d seen the first signs of the downturn, such as when Tiger Global found their VC fund nearly empty after a hefty $17B hit, in all changed. (The firm saw about two-thirds of its winnings since its 2001 launch vanished in just four months.)
Then, there was that awkward moment when Silicon Valley Bank fell flat on its face this spring. Too many companies were burning too much cash. And SVB was the cash source for about half of all US venture-backed tech and healthcare companies.
Now, founders have to justify every penny they snag from investors and prove their ventures can bring in the big bucks. Overnight success? Experts are calling it a pipe dream.
And how are tech companies riding out this storm? Well, in the video below, David Sacks, a bigwig at Craft Ventures, spills the beans on surviving a downturn and what steps don’t cut the mustard:
While you’re here, remember that trimming down software development costs is key to a solid growth strategy. So, what’s next? Let’s hash out some smart moves to save money on your engineering side of things.
Cost-efficient software talents: what are they
So you’re asking, “What’s the deal with cost-efficient software development teams?” Well, for growing tech companies, hiring within the U.S. is like paying for a gold-plated iPhone — pretty expensive. A senior developer from big names like PayPal, Meta, or Amazon could set you back a whopping $200K-250K in the U.S.! Meanwhile, international teams offer way more bang for your buck.
Where can you get more value for your money? According to Deloitte, 59% of companies choose nearshore software development as a cost-cutting tool. Here’s where Latin America comes to the stage! It’s got the whole package: cost-effectiveness and convenience, making it a hot spot for offshoring.
Casey Bailey from Deel, a global compliance and payroll solution that helps businesses hire anywhere in the world, has shared some insights: there’s been a 50% surge of U.S. companies hiring from LatAm from Q1 2022 to Q1 2023. What makes an international team like this a hit is similar time zones and a pool of talent that’s giving the U.S. a run for its money.
Also, they found that Argentina made it to the top 4 offshoring destinations for hiring software developers in 2022. Its fellow chart-toppers — the Philippines, the UK, and India — don’t exactly match up in terms of timezone convenience or talent quality.
When it comes to cost, LatAm developers with the same experience and expertise as their U.S. counterparts in the MAANG companies would only set you back $75-90K. Unsurprisingly, companies are jumping on the bandwagon and recruiting their teams there!
So, let’s dig a bit deeper into who these folks are and why companies are racing to hire them.
A look at global companies hiring big in LatAm
Between 2022 and 2023, some big-shot tech companies have decided to spread their wings into Latin America, seeing it as a gold mine for growth and cool innovations. Let’s check out who’s been making moves:
Microsoft: Around June 2022, they signed a collaboration agreement with the governor of Puerto Rico to provide training for the currently unemployed, helping them become certified by the corporation within two years.
Google: In February 2022, the giant of all things cloud decided to beef up its operations in Latin America. They put together dedicated teams to help boost the region’s utilities, agriculture, manufacturing, and logistics.
Fanki: This sporty digital platform has taken the leap into Latin America after securing a $6M seed round. Fanki aims to unlock untapped revenue potential and redefine the relationship between sports clubs and their passionate fans across LatAm.
Delve: A top-rated partner for some of the biggest marketing and tech names, including Google, Amazon AWS, and Meta, this consultancy firm needed to hire more world-class teammates fast. By filling their vacancies with Latin American talent, Delve is now saving $491,000 a year in payroll.
Devsisters: This international mobile game publisher is expanding their teams with Latin American members this summer.
“Even before we were a game company, we thought that if we could collaborate with developers all around the world and create a network, we could be successful.” – Se-joong Kim, Devsisters’ co-CEO
And let’s not forget others like Uber, Netflix, and Amazon, who’ve also been making moves in the region. Uber’s been ramping up on-demand services like UberEats, Netflix is churning out more local content to win over Latin American viewers, and Amazon is throwing a ton of resources into building its footprint in the region with everything from offices and sales to customer service and logistics. It’s all happening!
As a global-first talent acquisition company, we’re witnessing a significant shift in the hiring priorities of our U.S. tech clientele. Latin America is steadily becoming their top choice for recruitment. Contrary to last year, when their main motive to venture into this market was a dearth of high-quality talent, currently, 9 out of 10 clients primarily engage Latin American developers to streamline costs.
Why the Latin American talent pool is a gold mine
When you think of a gold mine in the tech industry, you might think of Silicon Valley or other high-tech regions. But there’s a gold rush happening in a different location: Latin America. The tech talent pool in LatAm is overflowing with highly skilled, innovative, and diverse professionals. If we delve into some statistics, it’s clear why companies are making a beeline for this untapped treasure trove.
A 2023 report by Nearshore Americas highlighted that Latin America houses an estimated 1.3 million professional developers. Moreover, according to a HackerRank report, countries like Argentina, Brazil, and Mexico rank in the top 25 globally for best software engineers, with Argentina’s developers ranked 4th globally in terms of quality.
Senior tech engineers, in particular, are flourishing in the region. Several factors contribute to this: competitive education systems in STEM fields, widespread English proficiency, and compatible time zones with North American companies. These factors are driving the international tech community to sit up and take notice of the rich vein of talent running through LatAm.
Latin America is also home to some of the most notable tech unicorns. Some of the most famous include:
Rappi: A Colombian delivery startup with operations across Latin America, which got a total investment of $2.3B, now has a $7B valuation. Around 1100+ talents of Rappi work in engineering and Information Technology spheres.
Nubank: A Brazilian digital bank, one of the world’s largest fintechs, that has raised $4.1B during investment rounds and reached a valuation of $30B. Nubank has 3,000+ engineering and IT talents on board.
MercadoLibre: Often considered the ‘Amazon of Latin America’, an Argentinian company that has raised a total of $3.8B in funding over 7 rounds. Today, MercadoLibre has a market cap or net worth of $60.73B, with almost 12,000 IT and engineering workers.
Last year, eight more tech companies joined the list of LatAm unicorns: Playstand, Stori, Nowports, Habi, Yaydoo, Kushki, Betterly, Dock, and Neon.
Related article: A Complete Guide to Latin American Fintech Unicorns
So, these hotshot unicorns don’t just show us the serious biz potential in the region – they’re also cranking out talented folks for the next-gen tech scene in Latin America.
The other testament that the LatAm tech scene is flourishing is the number of people visiting tech-related job boards. Here are a few to note, along with their estimated monthly visitors:
CompuTrabajo – Known as LatAm’s ‘go-to’ job board, it boasts around 5.7M monthly visitors.
Bumeran – An important platform for tech jobs in Argentina, with ~2.3M monthly visitors.
Empleos TI – A niche job board for the tech industry in Mexico, with around 800K monthly visitors.
ZonaJobs – A vital resource for tech professionals in Argentina, receiving around 2.5M visitors a month.
Trabajando.com – A widespread platform that spans many countries in LatAm, attracting ~3M visitors a month.
The talent pool in Latin America is both intricate and thriving. If the complexities of global recruitment or regional particulars seem daunting, I am here to provide further insight and guidance. Whether you need assistance in getting started or are looking to sidestep any unseen obstacles, don’t hesitate to ask me – here’s my LinkedIn. I’m always eager to help!
To wrap it all up, the tech scene in Latin America is a buried treasure of talent that tech companies worldwide are just itching to get their hands on. From what Deloitte says, 50% of executives identify talent acquisition as a top internal challenge in meeting their organization’s strategic priorities. With an army of skilled pros ready to rumble, Latin America’s gearing up to strut its stuff on the global tech runway.