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Building Unicorns in Latin America— with Polymath Ventures Director Yuan Li

· Latin America,Polymath Ventures,DiDi,Softbank,Founders and VCs
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Zoe interviews Yuan Li, Director of China-LatAm Tech Alliance & VP Business Development at Polymath Ventures. Polymath Ventures is a venture studio located in Bogota, Colombia that provides business incubation, start-up design and venture capital investment for Latin American start-ups. Yuan previously worked at Inter-American Development Bank as an investment manager, before moving to Colombia. Yuan shares her perspective on how to break into Latin American markets, the role and impact of Chinese tech companies expanding to Latin America, and other market developments, drivers, and challenges.


  • Right now is the best time to enter the Latin American market.
  • Since 2018, there has been an influx of capital. Launch of a $5b Softbank venture fund has provided the market a vote of confidence for both investors and founders ;
  • As unicorns have been created, they encourage equity investment into this sector; for example, more talent from finance and consulting are breaking into the start-up track
  • The key of localization is to maintain a beginners’ mindset in approaching the market and to help local people achieve a different way of doing things; it is critical to hire locals to help strategize and implement, along with key expertise from abroad
  • In Latin America, smartphone penetration is high and entrepreneurs have a strong userbase to work with; however, the lack of trust is a legacy issue, and entrepreneurs need to break that barrier and build products that engender trust and reliability
  • Governments in the region are pro innovation because they seek rapid growth, yet there remain clash of interests between incumbent and innovators that must be navigated

Edited by Zoe Li

[Editor's note: this interview has been edited and condensed for clarity. The opinions expressed in this article are Yuan's own and do not reflect the views of Polymath Ventures; Zoe Li is a student at Johns Hopkins SAIS and contributor at The Harbinger China]


Today we interview Yuan Li, director at Polymath Ventures who leads for the China- Latin America tech alliance. Yuan could you please provide a short introduction?

Yuan: Thanks for having me. So about myself, I was born and raised in China. I did my undergraduate education in Beijing. In the university, I was actually a policy, public policy background. So I studied public policy and branding and diversity and then went on to do masters at Johns Hopkins School of International Studies where I specialized in studying developing countries. And that's why was when I started to be you know, really interested in all the emerging markets in the world.

For me, coming from China at that time a few years ago, there wasn’t a lot talked about emerging markets in China. Yeah, so people tend to know very little about markets other than the US and Europe. Right? So, for me, those markets are exactly where, you know, the majority of the world's people are and hold the most areas of lands. So in theory, it should be the mainstream of the worlds. On the contrast I didn't know much about them. So I went to study these regions, it got me really interested. And during the studies, I started to, you know, put my effort to focus on Latin America for a few reasons. One is that given the proximity of the US and Latin America. There was a lot more information about the region and it's relatively easier to find opportunities to actually go to the region you know, learn about it, and having a first hand experience; and then secondly it just because the people that I was able to meet in the score and emotion these things that are from Latin America, they are always so cheerful, they are so fun to hang out with. It had become a really pleasant experience overall. And plus, coming from China, we don't have as much exposure to Latin America as much to other developing countries. So for me, it was also a good opportunity to build my personal niche, you know, advantage, having the ability to understand that region really well So I decided to start to build my career around this region.

As for Polymath Ventures, we are a venture studio for Latin America. And our thesis is to build for the massive middle class so the mass market of the region, through the digital platforms to empower them and to give them the access to high quality and fair cost in services and products, even including creating income generating opportunities for this segment. It's because in the region we see the huge gap or there's a big opportunity for all of these underserved mass market for the traditional industries, inefficiencies in providing these values for money, products and services. And that's precisely where digital has all the power of creating and filling that gap.

At Polymath, I have played different roles. I entered to be part of the venture creating teams. So our role was to study countries, study markets, study sectors, and the users and to come up with a digital new model that we think will lead to the unmet needs or solve the problems that are existing and to do the initial testing and validation of whether this model makes business sense, then launch. I was first doing the venture creation process, and then I’d also go work at a mature start-up where the team and product-market fit is there and its growing. So, I worked in one of our ventures called Auto-Lab which is an auto repair platform that that tries to formalize the auto repair shops that are massively informal in many countries in the region. So I led the user acquisition effort, leading the growth part, continuously gaining efforts. Then from there, I now transitioned to the current role, which is I'm doing the business development of the group in the sense of connecting Latin America and to global resources, primarily targeting China and Asia.

By the time you entered the market, there’s been ongoing talk about digital transformation there. What changed throughout the past few years with more and more mega funds and more and more tech companies entering the market? How has the market changed from that perspective?

Yuan: About the macroeconomic and the market of the tech sector in Latin America, I would say right now is the best moment to be in Latin America to be in the tech and startup world. Because I would say since 2018, there has been a strong influx of capital.

There are a few things that you need to have in order for a startup ecosystem to thrive. One is you need to have talent, people who are entrepreneurial that have a lot of experience and capabilities, and then you need to have capital and because these people ventures needs Association funding in order to thrive in a rather you know, traditional industrial environment. And so, I would say since 2018 you are seeing first a growing wave of capital that inspires a more talented people to start doing entrepreneurship. So those both of these things are now the beginning of the development. So you feel like you're riding the growing wave and right now being in the region. And so, something that really sparked the the capital side of the interest was the entering of SoftBank.

Yeah, so SoftBank, established of $5 billion USD venture fund that's called SoftBank innovation fund that is dedicated for investing Latin America. And when they launched the fund, it was that amount was more than the past two or three years of Latin America's total venture capital received - the combined amount of past two or three years. There's a lot of huge monumental event that gave the region put the region into the spotlight of the global tech community and also a big validation for the market opportunities here. So since that, more unicorns had been created, in a way that validates equity in this sector is has a lot of worth. For talents, it is an important realization. So you could have potentially had huge rewards for your efforts and your risk taking. And really sparked more and entrepreneurial and talented people to shift from a more traditionally regarded good career I've been like, you know financing investment banking consulting into this new startup track. So then you'll get both the talent and the capital together, then, you know, things started happening much faster, much faster and and more dynamic.

China’s Role in the Market

How do you see the impact of Chinese capital and Chinese tech giants when it comes to entering the Latin American market?

Yuan: I think yes. So from Polymath, we're seeing a lot of interests from China. We got inquiries all the time from Chinese tech companies, Chinese funds, investors, even entrepreneurs, who are now excited about this market. So I would say there's definitely a growing interest into wanting to know more of Latin America, from China. In terms of actions in Latin America, you are not seeing as aggressive as Chinese type activities and investment in Southeast Asia or India. Precisely because the familiarity is lower: there's more distance, there's traditionally not as strong of people to people engagement or link between Chinese and Latin Americans, then Chinese with Indians or Chinese with Southeast Asians. So we need that we need time and we need to have the right channels for Chinese side to learn more about the region. Objectively see and compare this region to the other emerging markets, to see the opportunities here and to be convinced that you know, it's time to we can be comfortable and we can be aggressive in this region.

However, having said that, we are seeing already a lot of movement from Chinese tech companies. You know Didi entered in Latin America. They did the acquisition of a Brazilian right hailing company called 99, and then they started building all their own operations in Mexico. Now from Mexico, they've expanded into other Spanish speaking Latin American countries, including Colombia, Chile, Costa Rica. And in all these markets, they've been doing pretty good, in terms of the local consumers really received their brand well and they've been liking the experience, in that they were able to also extend beyond the ride sharing business into start thinking about others and also adding additional value to the region through training local talents. I would say their engagement in the region is well rounded. And it has been having a really positive impacts in the region as in people see the value of Chinese tech companies that are providing. So they provide, in the Didi case they provide exit options, right so you can merge into Chinese tech giants.

They provide know-how, they have also been able to form local alliances with local conglomerates or local groups, that for them is also helping them to digitize. So it's a great case of showcasing, you know, all the different and value adds that China is bringing to the region. I think more Chinese companies are going to continue to come and when they come, you're gonna realize that this market is very good for them to do business, they have a very solid customer base, you have a solid economy, with middle class to even upper-middle class income rank. And so this, once they've experienced all of that they're gonna take it back to China and tell more people about what is their reality on the ground in Latin America, so then, more people will be able to see the opportunities.


You’ve written on 36kr (Chinese Tech Media) the purchasing power in Latin America has actually been accumulating since 1970s or 1980s. And right now, this huge middle-income category is the main customer target. But as you also said… unfamiliarity with Latin American culture and languages is a problem. So how does a foreign company enter / build for Latin American, how do they localize?

Yuan: Localization is definitely always the priority or the most important thing for any foreign players to enter a new market. I think the Chinese companies also need to do that localization I would say overall the Latin American people have a very open mind and welcoming attitude towards new products and services no matter where they're from. Definitely, you know, that is a very good beginning for new players. And for them to localize: I think the most effective way is to really have a beginner's mindset in the sense of, you know, recognize that I'm new here and I want to learn and I mean, the learning and more data. I want to you know, engage as often as much with a local people local talent and expert, that showcasing that I have this attitude of: if I’m here, then I'm here to contribute.

It's not like you know, I'm here to to like harvest or to take advantage of this market. But yes I want to do business here, but at the end of the day, the business is to help the local people to have better lifestyle better products and better services and as well as to contribute to the local business environment to help them learn about different ways of doing things. So having a very humble and beginner's attitude, and engage yourself as as much as possible with the local players and local consumers. Definitely try to have your teams very localized in the sense of having key local talent leading the implementation of important operations. You could have your own people there too, experienced people who’ve gone through the evolution in China. So they know better the company they know better the culture the style of the company and the management to act as the supervisor role in the local operations, to guide the local teams, to help them make better strategies, but definitely the implementation side I would say fully in translated into your local teams and give them the flexibility to make decisions, give them room to experiment. Meanwhile, have that strategic person there to help them adapt into your own company's culture and way of thinking. As well as, you know, a bigger, broader scope. So I think and I think you have seen that these approaches have also been the most successful into in the cases where companies very well localized. Right? So always kind of balance your existing mindset, and then the local reality.

We often hear that emerging markets such as Southeast Asia or Latin America are probably like 10 years behind China. We hear there’s a lot of promise in Latin America… but what’s still lacking in those regions?

Yuan: Sure, I think in this market is what we're talking about is like a good foundation; as in digital penetration is all very promising. So in terms of smartphones, and mobile internet connectivity, they are all in the leading is the all the emerging markets in terms in terms of indicator and performance indicators. So you're talking about that you have a good base to work with. Since the region started digitizing relatively recently. So there's still a lot of of these digital services that are very new to the customers. As we see in our operations and in many other cases, what is the most needed is to construct trust in society about a platform or a digital channel, a tool. That is because I think in Latin America, there has been some issues with trust is basically between people and business. It's a legacy issue. So, there had the region has had this problem, as not only in the digital sector but in all sectors in traditional and new that people have been having this problem. So, they tend to be cautious when it involves you know money and information about their data, you know, things like that. Definitely the product, an entrepreneur, when entrepreneurs design the product, they need to consider that okay, we I need to break the trust a barrier that people may have towards my services and my platform and design mechanisms that will construct better trust from the people. So once people think that this is trustworthy and that is a better experience than whatever the traditional comparable that could get.

I think the government in overall in the region have been quite pro innovation. Because also governments are looking for new growth engines for their economy, right, because Latin America is historically has been very resource dependent. So that have lagged their effort into developing into truly industrialized as what we have seen was China.

China industrialized very well and have been able to construct the multi-layered and multi-factor and manufacturing and industrial industries. Whereas here in Latin America, industrialization was never very deep and profound. So the for countries it's important to look at, okay, where could be my next growth point? And I just think many governments see innovation digitization technology, as a key growth booster for the country. So then, in that sense, their policy orientations are generally welcoming, including for example, in FinTech, a few countries have launched FinTech regulation sandbox. So these are policy tools that basically say, I open the space for these FinTech companies to innovate and experiment while I as regulator collecting information and data to better inform myself on how I should regulate these financial innovations. So things like that. And you are seeing in different countries implementing similar tools to encourage digital transformation.

At the end of the day however, these digital innovations may go against the interests of traditional groups, so there could generate a clash in interests between incumbents and new innovators. Right. Then there you enter into kind of the lobbying, people trying to protect their own thing realm. And that involves involve could involve political. So from like, interest groups evolving into political conflicts, and then there will be some fights there. We have seen cases in the countries where incumbents tried very hard against innovations, and then sometimes they win sometimes lose. But I think throughout that is to say, in all these countries, I think governments are learning also how to best deal with this complex situation, in the meantime, promoting be more friendly towards innovations but as well as balance the potential clashes It could generate.

We're already seeing several unicorns cropping up within Latin-America, e.g. Nubank or Rappi.

Yuan: You have a few FinTech records, such as NuBank, such as payment companies, lending companies. And then this whole FinTech world, and then you have definitely the delivery on demand services, like Rappi. They have been able to expand from delivering food, delivering groceries, and delivering everything else that is building towards a super app platform. Right. You also have a few other companies. For instance, there's a unicorn, that is the newest unicorn here of Latin America, which is in housing real estate transaction platform. So it helps to digitize the traditional brokerage industry and risk data and put it online to help these transactions. You also see unicorns coming out from gaming from health and well being services like the ClassPass of Latin America, they with a slightly different business model more towards B2B is like they're operating in the area of fitness. A good variety of different industries.

At the end of the day, I think it validates the point that Latin American markets have a decent size. Well, it's big enough, that the needs are big enough in multiple sectors, that you have opportunities in all of these spaces to become a unicorn or become really big, right. So that is also a very welcoming context for the people, the entrepreneurs and investors that are in this region. So the prospect today is unlimited

Polymath Ventures – Human Centered Design

I understand that Polymath Ventures uses really “Human Centered Design” approach to solving problems and company building. What have been your key lessons at Polymath leveraging this approach in understanding the local market, especially as a Chinese National?

Yuan: We want to build products are desired by the people that are needed by people that solve real problems. The people that were serving for. So having this structured approach and the Human Centered Design, and building upon that, the basis of that methodology was to utilize and to understand our customers is a great way. For me personally, coming from Chinese background, I'm spending most of the time in China and the US system. For me, that's America is new, and I want to as best that I can, you know, get to understand the people that I'm serving for.

So through this approach what I find, you know, really powerful there is that you get into in a relatively not so huge sample, let's say in a decent sized sample. You are able to strategically select the people you want to engage with. And then you’re able to in a rather short period of time get to know them deeper beyond the usual daily activities and families. But really to understand deep inside of each of these person that you engaged with. What motivates them, what what what are they, what are their fears, what do they what are their hopes and dreams and what do they want for their lives, for their family and for the people around them. To that level. That really inspires you as a business designer, you know to say where should I really pay attention to? What should my business really tackle for them or what should I really offer for them that this will match with their deeper personal and aspirations or needs. Yeah, so that helps us to a lot more quickly get to a deeper level where you build the business for.

And then from there, it's really like also more tools for you to become very expansionary and about all the ideas you could think of all the, you know, information that you can collect from the past experience, from other people's experiences on the markets, and then quickly narrowing down noises and selecting the truly useful and possible business models. And then from there, then you go on actually to cast it. You don't stop there. You also want to know, true market validation that this could work. So it makes not only business model, financial modeling sense, but also makes market sense.

For me it has been a very powerful tool. And we built businesses based on that and some of our business for instance, we have built this Latin America's first social ecommerce platform, it's called Elenas (means powerful women). So the concept of this business is to grow social selling, which is a concept that is rather mature in China and in Asia. The social selling empowers a lot of the Latin American women to be able to generate even more financial independence inside their households, inside their communities and amongst their family members, so that they can feel truly and empowered or liberated to do more things about their lives. Because Latin America has been traditionally being a very macho society. By providing them with economic tools, they feel much more empowered and feel also like a key member, a key contributing member in their in their communities. And that gives them the Freedom and the will to do more stuff to improve their lives to the lives of their family. So, yeah, these type of things couldn't be able to build it without leveraging the Human Centered Design and the tools to get to the real needs of the people.

Information Sources about Latin America

Could you recommend some resources to those who are interested in learning more about the Latin-American market?

Yuan: Well firstly, I would recommend following us on LinkedIn (Polymath Ventures) ha! One of our key ideas is to share insightful and interesting articles, content, and even our own approach about how we build, how should we build, and how should you approach the opportunities in the region. So it's a curated content that we already selected to publish. So that's a good way of one source. In terms of like keeping up with what's going on in the market. There's a tech media in Latin America called: Contxto. They have both English and Spanish content and they also have regular newsletter to keep people updated.

And there's another very good newsletter and I'd totally recommend is the newsletter of LAVCA. LAVCA is Latin America PE/VC Association. They have regular newsletter that they compile big deals and new funds being raised and new events as well as they do sound entrepreneur interviews with some of the most interesting models in the region to get to know okay, how companies were built the stories of entrepreneurs and stop. So these are these are like regular sources that are very useful.

I would really recommend interested people to come to Latin America to really experience exactly the momentum that's going on right now. Because it's fascinating! You go to a cafe, you know, you're seeing people discussing their projects and with a lot of energy and you go to a co-working space, there's all these groups of discussing new ideas, and even come to an event, you know, startup event here and you're, there are so many entrepreneurs and enthusiastic, young people who are trying to innovate in the space.

Come, we're happy to help anyone like to connect to an ecosystem in different countries shares.