Look South: Startup Opportunities in Latin America
By Yesenia Lugo for Global Risk Insights
Investors and businesses take note: look south in the Americas for the next big venture.
With a strong consensus that they are increasingly reliant on Internet and mobile technology, governments and entrepreneurs are working together to create opportunities for startups in the South America.
Strong startup culture and opportunity can be always found in places like Silicon Valley, London and Austin, Texas, but the landscape is beginning to change. Latin American cities and consumers are gaining international attention for their new appetite when it comes to business and technological developments.
Internet Media Services (IMS), a Miami- and Latin America-based digital marketing and communications company, reported “Latino Silicon Valleys are popping up all around the region.”
In some South American governments, like Brazil, programs are being implemented to facilitate successful ventures and encourage citizens by offering incentives.
Brazil, with its population of approximately 11 million people, has become a strong proponent in Latin American fine arts, commerce, finance, and entertainment industries; becoming a startup hub for the tech market is the next logical step for the country to make an impact.
Entrepreneurs all over Latin America are rising to take advantage and benefit from well-funded programs and networking opportunities. Here are some of the best areas in Latin America to invest in a startup:
According to a new study that compares startup activity and attitudes in 44 countries across the globe, Colombia emerged as a strong leader in entrepreneurship and investment opportunity.
Colombia scored very high on three measures: the share of the working-age population engaged in early-stage entrepreneurial activity; the portion of entrepreneurs who expect to create 20 or more jobs in the next five years; and the share of entrepreneurs who say they are offering innovative products or services.
According to Colombia Reports, the Colombian government is working to bring 63% of its population online by 2018. In addition, the GSMA “Mobile Economy” report for Latin America boasts 69% smartphone adoption, which will ultimately help Colombia emerge as a top leader in a stabilized economy.
Due to its recent emergence as technological hub, Santiago, Chile has been dubbed “Chilecon Valley.”
Chile’s government hosts a program called Start-Up Chile that offers entrepreneurs—both Chilean citizens and other residents—a sum of roughly $33,000 in capital. In exchange, the entrepreneurs are required to organize and participate in workshops and conferences designed to foster entrepreneurship opportunity. Recently, more than 1,000 startups from 75 counties have been selected to participate in the program, including mobile- and Web-based tech companies.
Chile’s key attraction is the international attention it has garnered for its reputation a startup hub that opened its doors to foreigners as other countries were shutting theirs, said Sebastian Vidal, executive director of Start-Up Chile.
Mexico, the second-largest economy in Latin America, is quickly becoming a startup force to be reckoned with. From Mexico City to Monterrey, entrepreneurial opportunities are emerging with the support of the Mexican government and local organizations.
In what is commonly known as the “Mariachi Valley,” Mexico is leveraging its diplomatic ties to the United States and cultural ties to other Latin American countries to create a middle ground between entrepreneurs and business investors.
The Mexican government is expected to spend around $600 million in funding towards entrepreneurial opportunities with the creation of INADEM (National Entrepreneurs’ Institute) through 2018. Mexico has more than 20 accelerators formalized and a crop of crowd funding platforms that are emerging to meet the funding goals of new entrepreneurs. Today, there are 45 venture capital funds registered – up from only two funds in 2008 and 14 funds in 2012.
These initiatives are creating successful programs that give entrepreneurs access to diverse services, presentation opportunities, workshops and networking.