These days, operating mobile technology has become second nature: almost as natural drinking, eating, or breathing. That’s a hyperbole, of course, but the point still stands: mobile phones and digital apps are extraordinarily common all over the world, not at all limited to developed markets.
In fact, there may be more opportunity for mobile technology breakthroughs the world over. As I’ve written about in my book Frontier Investor: How to Prosper in the Next Emerging Markets, frontier markets—those on the verge of emerging—hold incredible promise. With these markets come great investment opportunity, especially in industries like mobile technology where a little disruption can go a long, long way.
In many frontier markets, a lack of existing infrastructure and services have left several voids that can be filled by new mobile tech services. In Bangladesh, for example, 75 percent of people have mobile phones but only 25 percent have bank accounts. The solution? A mobile banking product that would allow people to transfer money by text—in this case, something called Bkash. The introduction of this product utterly transformed the country’s banking landscape, creating a thriving industry with little competition, and stimulating the economy all the while.
Recently, Volta Global (the private investment company I founded) invested in a company called Yellow Pepper, the Miami-based fintech company has to date raised over $40 million to fund its growth. Specifically, Yellow Pepper is bringing mobile banking to frontier markets in Latin America. I recently sat down with the Miami Herald’s Nancy Dahlberg to talk about this new venture and the rise of mobile tech in frontier markets—and in Latin America in particular.
In the interview, I explained why a company like YellowPepper goes a much further way focusing on frontier markets than a similar company focusing on a big developed country, like the US. Sure, frontier markets might not seem like much at first glance, but added together they have a larger GDP than China or the US without the baggage. Frontier markets are also growing at a much faster pace.
Another important concept I want to come back to is that of “leapfrogging” and what that means for mobile tech in frontier markets. When Bkash came to Bangladesh, it leapfrogged traditional banks. YellowPepper promises the same for countries like Ecuador and Colombia. The same thing happened in Kenya and other frontier markets that just didn’t have a solid banking system.
This doesn’t just apply to banking, though, by a longshot. Think about everything you do on your phone, and all the endless possibilities, of which banking is just one. Take social media and the Internet, as another example. Big companies like Facebook are doing their best to bring social media to areas without traditional internet access — “Facebook Lite,” it’s called. And that’s alongside their drone project, which hopes to widen internet access all around.
Mobile services in frontier markets can do much more than even that. There are mobile voter registration systems, and ways to apply for entrepreneurship grants on mobile. There are mobile services that send farmers information about crop prices; tablets pre-loaded with entire libraries; a “mobile midwife program” for pregnant women, and so much more. In regions where schools, government buildings, and hospitals are few and far between, these innovations make a huge difference.
Investors in mobile tech for frontier markets get not only the great feeling of actually empowering people that need it, but the financial benefit of staking ground in spaces ripe for quick growth.