If you’re looking for startups to watch in 2023, you could do worse than broaden your horizons to Central America. In this guide, Craig Dempsey of Biz Latin Hub provides a quick country-by-country overview of the startup landscape around Central America.
Central America is perhaps the most misunderstood region of the Americas. Most of the countries in this region were once (briefly) part of the Federal Republic of Central America, now formed by Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua. Panama is part of Colombia and Belize is one of the only countries in Latin America where Spanish is not the primary language.
These peculiarities, combined with the region’s rich cultural history, shared cultures and diverse geographic locations, create highly distinctive markets based on medical devices, coffee, copper and bananas.
If you are an entrepreneur interested in Central America, don’t let this deter you. The economy is still very agricultural, but here at Biz Latin Hub, see a healthy startup ecosystem in the region, an ecosystem worth exploring.
Below, we take a look and review some of the leading startups to watch in Central America. The list is ordered by StartupBlink’s startup ecosystem rankings, but we look at his per capita GDP for each country to provide context.
With a GDP per capita of $12.5 thousand, Costa Rica is the second richest country in Central America and the number one startup ecosystem in the region (67th in the world). Costa Rica’s economy is based on tourism, agriculture, and electronics exports.
Costa Rica is a tech-savvy country with one of the highest English proficiency levels in Latin America. The startup ecosystem, largely based on fintech, reflects this. From 2021 onwards, Costa Rica is on a steady climb, rising five places in the global startup rankings.
Costa Rican startups to watch out for:
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Panama is the richest country in Central America with a per capita GDP of $16,000. Much of its prosperity comes from the Panama Canal, which connects the Atlantic and Pacific Oceans.
This economic boost will allow Panama to have a rich startup ecosystem. Panama is currently ranked 2nd in Central America (78th globally) for start-ups, rising 5 globally from 2021 onwards.
Most startups in Panama are tech related. Many of them have dual headquarters in the United States, making Panama generally a convenient gateway to the Americas.
Notable Panamanian Startups:
- Boxit: pick-up service
- Munily: community and building management
- Criptext: A Security Based Encrypted Email System
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El Salvador is next, ranking 3rd in the startups region (104th globally). His per capita GDP in 2021 is $4.5 million and he has an economy primarily based on food processing, beverages and oil.
El Salvador is an ideal location for software and data, food tech and transportation start-ups. It’s also worth noting that El Salvador has become something of a hub for cryptocurrency startups since he launched his Bitcoin fiat currency in 2021.
Some Salvadoran Startups to Remember:
- Hugo: micrologistics and food delivery
- Urbanization: Transportation and Logistics
- Treecloud: Software and Data/Artificial Intelligence
Guatemala is next, the 113th startup in the world. With a per capita GDP of $6.2 million, it is her third richest country in Central America. Guatemala is also the largest economy in the region. Its economy is primarily based on sugar, textiles and furniture, and it ranks 4th in the Central American startup ecosystem.
Here are some notable Guatemalan startups.
- La Marketina: production of 100% natural handmade jams
- Kingo: Decentralized solar energy services for families and businesses in off-grid villages
- Programa Valentina: Recruitment/Marketing
Belize is the only country in Central America where English is an official language. A former British colony, it became independent in 1981. Today, she is the fifth richest region in the region (by GDP per capita).
Belize’s economy is heavily dependent on tourism, agriculture, forestry and fishing. Foreign investment is the main source of funding for startups.
Here are some Belizean startups to keep in mind.
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Honduras is Central America’s sixth largest economy, with an economy primarily based on sugar processing and coffee.
That said, there are many initiatives aimed at improving the status and ecosystem of Honduran startups. Honduras’ Digital Challenge initiative is a good example of this. We provide tools and support for Hondurans to develop as entrepreneurs.
As a result, many startups are born. Here are some notable ones:
Finally, we have Nicaragua. Nicaragua is the poorest country in the region, with an economy based on food processing, chemicals and machinery.
While not the most likely location for a Central American startup, Nicaragua has some interesting startups such as:
Current state of startups in Central America
We hope we’ve given you some startup ideas to watch in Central America, and that this guide has provided more context for the region’s startup ecosystem. Despite many economic challenges, the region has a distinct entrepreneurial spirit. In many cases, Central Americans have found successful startups outside the region as well. Duolingo’s founder, Guatemalan Luis von Ahn, is a great example.
Overall, Central American entrepreneurs have left their mark not only in the region, but further afield around the world.
Craig Dempsey is co-founder and CEO of Biz Latin Hub Group, an organization that helps investors in Latin America and the Caribbean.