The New Face of Global Tech: State of Software Development in Latin America

There’s a quiet shift happening in global tech, and it’s not coming from Silicon Valley or Shenzhen. It’s brewing in the streets of Bogotá, the co-working spaces of São Paulo, and the tech parks of Guadalajara. Latin America is rising as a dynamic force in software development.

With a deep talent pool, competitive rates, and US-aligned time zones, the region is drawing in global tech giants, startups, and venture capitalists. In fact, Amazon, Google, and Stripe are already betting big on Latin America. 

In this article, we’ll dive into what’s fueling the boom of software development in Latin America and look at what’s driving global companies to build in and with the region. Let’s unpack why LATAM is the next big thing in software development.

Market Overview: Latin America’s Software Boom 

Software development companies in Latin America are at the heart of a booming tech economy that’s gaining serious global traction. According to IDC, IT spending in the region reached over $120 billion in 2023, with software services driving nearly 40% of that growth.  

The custom software development segment alone is expected to reach $30.5 billion by 2027, rising at a CAGR of 7.94% between 2022 and 2027 (Market Data Forecast). This growth is fueled by rising cloud adoption, e-commerce expansion, and investments in automation, data analytics, and cybersecurity.

Brazil leads the region, accounting for around 40% of Latin America’s total IT market (IDC). It is then followed by Mexico, Argentina, Colombia, and Chile. These countries attract investment from global tech companies and establish themselves as high-value outsourcing hubs.

The IT outsourcing sector is another key growth engine. Statista projects Latin America’s IT outsourcing market will grow from $15.5 billion in 2024 to nearly $24 billion by 2028 (Statista). 

Cities like Medellín, Guadalajara, Buenos Aires, and Santiago are becoming prominent tech hubs backed by government innovation incentives and strong developer ecosystems (IDB). Latin America is no longer an emerging contender. It’s fast becoming a global force in software development.

Talent Pipeline and Education Landscape in Latin America

Latin America’s software development edge lies in its expanding, highly adaptive talent pool. As of 2023, the region is home to more than 1 million professional developers, with Brazil alone accounting for over 500,000 (Statista). 

Mexico, Argentina, and Colombia follow closely, and all are seeing year-over-year growth driven by both formal education and alternative training paths.

Universities across the region are scaling their STEM programs. Brazil produces nearly 120,000 tech graduates annually (BRASSCOM), while Argentina, Colombia, and Mexico have ramped up investment in computer science curricula at public universities. 

Meanwhile, online education platforms and coding boot camps are filling the gaps. Platforms like Platzi in Colombia, Laboratoria in Peru/Mexico, and Henry in Argentina produce thousands of job-ready developers per year, often in under six months.

The demand isn’t just local. It’s global. 

According to DevSkiller’s Global IT Skills Report 2023, Latin American developers consistently perform at or above the global average in JavaScript, SQL, React, and Java assessments. They also show key skills for distributed teams, like strong adaptability in remote workflows, Agile methodology, and DevOps tooling.

The region’s English proficiency, a hurdle in the past, is also improving. The EF English Proficiency Index 2023 places Argentina in the “high proficiency” tier. It even ranked 28th globally. Costa Rica, Bolivia, Chile, and Peru also continue to rise in ranking. 

English proficiency matters because communication skills directly impact integration with US and EU-based engineering teams.

To meet surging demand, governments are stepping in. Uruguay’s Plan Ceibal, Chile’s Digital Talent for Chile initiative, and Colombia’s Misión TIC 2022 have injected funding into nationwide coding education and digital literacy (IDB).

Outsourcing and Nearshoring Trends 

Latin America has become North America’s software backline. But it’s not just about cheaper rates anymore. The region is riding a major nearshoring wave. Global companies are shifting fast to lock in the advantages, especially when factoring in the cost of hiring a software developer globally.

According to N-iX’s Global Outsourcing Landscape Report 2023, Latin America is now the third most attractive region for IT outsourcing globally, after Asia and Eastern Europe. The top drivers? 

Companies no longer want developers on the other side of the world—they want partners who can jump on a call during the same business hours.

Countries like Mexico, Colombia, and Argentina are leading the charge. Accelerance’s Global Outsourcing Guide 2023 ranks Argentina and Colombia among the top global destinations for software development based on technical proficiency, scalability, and business environment. 

Meanwhile, Mexico benefits from the USMCA trade agreement, simplifying cross-border operations and incentivizing tech investment.

And big tech has taken notice. Amazon Web Services (AWS) has launched infrastructure zones in Colombia and Chile, while Oracle and IBM are expanding cloud and engineering hubs across Mexico and Brazil. 

Stripe chose Mexico City as its LATAM engineering base in 2021, citing access to strong local talent (Stripe Newsroom). Remote-native firms like GitLab, Turing, and Wizeline are scaling delivery by hiring hundreds of developers across the region.

Local ecosystems are responding in kind. Medellín’s Ruta N, Guadalajara’s Ciudad Creativa Digital, and Santiago’s Start-Up Chile are evolving into regional tech clusters. They offer everything from startup incubation to R&D incentives and export-ready tech talent (IDB).

Startup and Innovation Ecosystem

If you think Latin America is just a talent exporter, think again. The region is building its own tech giants. Its startup scene is booming, and it’s not slowing down anytime soon.

In 2021 alone, Latin America saw over $15 billion in venture capital investment (LAVCA), nearly three times the amount raised in 2019. While funding cooled slightly in 2023, core sectors like fintech, logistics, and e-commerce remain resilient.

The region now boasts over 35 tech unicorns, including Kavak, Rappi, and QuintoAndar. These companies aren’t just surviving. They’re scaling globally. 

Nubank, for example, became one of the world’s largest digital banks with over 85 million users, backed by firms like Sequoia, Tencent, and Berkshire Hathaway (Nubank Investor Relations).

Governments are actively supporting the momentum. Chile’s Start-Up Chile, Brazil’s StartOut, and Colombia’s Apps.co are offering seed funding, tax breaks, and international exposure to early-stage startups. 

Meanwhile, accelerators like 500 Global LATAM, Y Combinator, and Parallel18 (Puerto Rico) are helping regional founders launch into global markets.

Innovation is also diversifying. Beyond fintech and e-commerce, there is a surge in AI, health tech, edtech, and green logistics. A great example is Sambatech, a Brazilian startup that specializes in AI content delivery. Mexico’s Nowports, a digital freight platform, raised $150 million in Series C funding in 2022. 

Latin America isn’t waiting for permission to innovate. It’s solving problems at scale and, in many cases, faster than its Silicon Valley counterparts.

Challenges in the LATAM Software Sector 

Latin America’s software scene is growing fast, but growth without structure brings friction. For all its momentum, the region still faces a set of challenges that can slow or stall growth if left unaddressed.

Here’s where the pressure points are showing:

1. Talent Retention and Wage Pressure

As global companies scale remote hiring across the region, local startups are finding it harder to compete for top talent. According to CodersLink’s LATAM Tech Talent Report 2023, nearly 40% of software developers in the region now work for international employers. 

This has led to rising wage expectations, frequent job-hopping, and internal brain drain, especially in early-stage companies that can’t match US dollar-based salaries.

2. Infrastructure Gaps Beyond Major Hubs

While metro areas like São Paulo, Bogotá, and Mexico City enjoy high-speed connectivity and cloud access, smaller cities and rural zones still suffer from inconsistent broadband, high latency, or unreliable electricity. 

Over 35% of rural households in Latin America lack access to basic internet (IDB). This limits opportunities for upskilling and remote work outside the major tech hubs.

3. Economic and Political Volatility

Tech investors continue to be concerned about currency instability, inflation, and frequent policy changes. Planning for long-term pricing and payroll became challenging in 2023 when Argentina’s annual inflation rate surpassed 140% (World Bank). 

Countries like Peru and Ecuador have also seen political turbulence affecting investor confidence and operational stability.

4. Communication and Workflow Maturity

Time zone alignment is a strength—but real-time collaboration requires more than availability. English proficiency varies widely across teams, and async work culture is still developing. This can lead to communication friction in agile environments, especially when dealing with cross-border product delivery or fast-moving sprint cycles.

5. Regulatory Gaps and Data Protection Concerns

While Brazil (LGPD) and Chile have passed modern data protection laws, many others still lack comprehensive cybersecurity, privacy, or intellectual property (IP) protections. This regulatory patchwork makes cross-border data operations riskier and slows enterprise adoption, especially amid growing cybersecurity threats globally. 

The OECD’s Digital Economy Outlook 2023 highlights the uneven pace of digital regulation across LATAM as a key barrier to scaling digital services.

Latin America’s software development sector is already gaining momentum, but structural limitations can jam its global competitiveness if not addressed. To keep growing, the region will need stronger digital infrastructure, regulatory clarity, and deeper investment in long-term talent development. 

LATAM in Focus: Companies Tapping Into The Region’s Potential

Big tech is investing deeply, opening hubs, acquiring local firms, and building long-term pipelines in Latin America. Here’s how major players are locking into the region’s software economy:

Globant (Argentina)

Founded in Buenos Aires in 2003, Globant has become one of Latin America’s top global IT service companies, with more than 27,000 employees and active delivery centers across Argentina, Colombia, Mexico, and Uruguay. 

It delivers digital transformation services for companies like Google, Santander, and Electronic Arts, leveraging regionally distributed Agile teams. In 2022, it launched an AI and emerging tech innovation hub in Colombia as part of its long-term strategy of expanding its deep tech footprint within LATAM.

Nubank (Brazil)

Nubank, headquartered in São Paulo, is the largest digital bank in Latin America, with over 85 million customers across Brazil, Mexico, and Colombia. Rather than outsource tech, Nubank has built a robust in-house engineering culture. 

In 2021, Nubank acquired Plataformatec, a Brazilian software consultancy known for its deep expertise in Elixir and Agile practices. This move strengthened the former’s backend capabilities and reinforced its long-term talent strategy within the region.

Wizeline (Mexico)

Though founded in the US, Wizeline has centered its global delivery operations in Guadalajara, Mexico. It also has additional teams in Colombia and Vietnam. 

Over 70% of Wizeline’s workforce is based in Latin America, where the company develops cloud-native platforms, AI apps, and enterprise solutions for global clients like Riot Games and Wyndham Hotels. It also runs Wizeline Academy, a training initiative designed to upskill regional developers.

Nowports (Mexico)

Founded in Monterrey in 2018, Nowports is Latin America’s first logistics-tech unicorn. It offers digital freight and supply chain management solutions. Nowports operates across multiple countries, including Chile, Colombia, Brazil, and Peru, with its product and engineering teams anchored in Mexico. 

In 2022, it raised $150 million in Series C funding, led by SoftBank and Tiger Global, to expand automation and AI in freight logistics powered by regional dev talent.

Whether via acquisitions, talent hubs, or in-region product teams, global and regional are embedding Latin America into their core operations. These businesses do more than just hire. They’re scaling, building IP, and growing competitive advantage on Latin American soil.

What’s Next for Software Development in Latin America

Talent, infrastructure, startup momentum, and worldwide demand are the cornerstones. However, scaling more quickly, deeply, and intelligently is covered in the following chapter. Green flashes are already visible on the indicators.

1. Rise of AI and Advanced Tech Adoption

Latin America is no longer just consuming global technologies. It’s starting to build them. Startups and enterprise teams across Brazil, Chile, and Mexico are investing in AI-driven solutions for finance, logistics, and education. 

According to IDC Latin America, AI spending in the region will be $3.4 billion by 2025. It is growing at a CAGR of 25%, echoing the broader global AI growth trends (IDC). Governments are also stepping in. Brazil and Colombia have national AI strategies to drive R&D and workforce development.

2. Global Demand for Remote-First Engineering

As companies go hybrid or fully remote, Latin American developers are no longer secondary hires. They’re primary contributors. 

Platforms like Turing, Andela, and Toptal report significant growth in LATAM-based placements, with US startups prioritizing time zone-aligned teams for core development roles (Turing). The result is more full-time product ownership, not just task outsourcing.

3. Deepening Venture Capital and Exit Pathways

After a record VC year in 2021, capital is still flowing, just more selectively. Fintech, SaaS, and AI continue to attract funding, especially from Kaszek Ventures, Monashees, and SoftBank LATAM Fund. 

What’s changing? There’s now an emerging exit infrastructure. More LATAM startups are targeting IPOs, cross-border M&A, or global scale without relocating. Ebanx in Brazil and Cornershop in Chile/Mexico are early examples of regional exits leading to broader integration with global players.

4. National Tech Policy Is Getting Serious

Governments across the region are doubling down. Uruguay offers tax incentives for software exports. Chile’s Digital Talent initiative is reskilling over 16,000 professionals annually in data and software roles (IDB). 

Mexico’s Prosoft program continues to provide funding for software service firms. These aren’t pilot projects. They’re strategic national moves to position tech as a GDP engine.

Conclusion 

The rise of software development in Latin America is already in motion. The talent is deep, the infrastructure is catching up, and the world is hiring, building, and investing here with purpose.

From São Paulo to Santiago, the region is producing real outcomes: scalable software, globally competitive startups, and engineering teams that deliver at enterprise-grade. It’s no longer about nearshoring or cost-cutting. It’s about performance, innovation, and long-term value.

For tech leaders looking ahead, the message is clear: Latin America isn’t the next frontier. It’s the current opportunity. Those who move now won’t just find talent. They’ll find leverage.

LATAM Software Development FAQs

Which country has the cheapest software developers in Latin America?

Bolivia offers some of the most affordable software development rates in Latin America, with an average of around $33 per hour. This is attributed to its lower cost of living and emerging tech sector.  

What is the biggest data center in Latin America?

Ascenty is the largest data center operator in Latin America. It has 34 facilities across Brazil, Chile, and Mexico. Its São Paulo campus stands out as a major hub, supported by a 5,000 km proprietary fiber network.   

Which country has the most tech startups in Latin America?

Brazil leads the region in tech startups, ranking 27th globally in 2023. Cities like São Paulo and Florianópolis are prominent innovation hubs, hosting numerous startups and unicorns. 

By Harsha Kiran

Harsha Kiran is the founder and innovator of Techjury.net. He started it as a personal passion project in 2019 to share expertise in internet marketing and experiences with gadgets and it soon turned into a full-scale tech blog with specialization in security, privacy, web dev, and cloud computing.