ChileconValley’s comingofage


years. Specifically, the country’s Corporación de Fomento de la Producción de Chile (Corfo), an agency tasked with boosting eco- nomic growth, has been pivotal to the emergence of the start-up ecosys- temin the capital, Santiago. In 2010, Corfo launched the seed


accelerator Start-up Chile. The pro- gramme, which has weathered its fair share of criticism—particularly regarding the longevity of some of its start-ups—is nevertheless fre- quently cited as a contributing factor to Santiago’s successful start-up sec- tor. Its portfolio is currently valued at $2.1bn. “This programme was a key

player in creating the entrepreneur- ial hub that exists today. [It was vital] in terms of attracting foreign talent, which served as rolemodels to local founderswho, 10 years ago, didn’t necessarily have a global mindset. It also created start-up deal flow, which, in turn, boosted the venture capital industry,” says Paula Enei, a partner at Platanus Ventures and a former director at Start-up Chile. However, the success of

Santiago’s ecosystemcannot be attributed to the government alone. Amonth before Corfo rolled out Start-up Chile, Groupon acquired ClanDescuento, a Chilean company offering discount codes to consum- ers. This was Chile’s firstmajor exit. Since then, other Chilean busi-

nesses have followed suit. Portalinmobiliario, purchased by MercadoLibre in 2014; Mapcity Geo, acquired by Equifax in 2017; and Cornershop, bought by Uber in 2019, have gone on to cement Santiago de Chile’s position on the global start-


ntrepreneurship in Chile has been a product of concerted government policy for many

up map—even if the city lags behind others in the region.

Centralised start-ups For years, Santiago’s start-ups were held back by the lack of venture capi- tal (VC) funds. Today, the scenario is radically different. Chile’s capital city is nowhometo more than 20 VC funds, and a host of family offices and corporates—all ofwhich play a vital role in supporting entrepre- neurship in the country. Perhaps unsurprisingly, Santiago

is the dominant player in terms of VC funding in Chile. According to PitchBook, investment peaked in 2020 whenstart-ups raised $125.5m—a sig- nificant leap from the levels seen dur- ing the previous decade. From 2010 to 2020,VCvolume in Santiago stood well belowthe$50mmark. As of mid- May,companies have raised $38.9m in 2021. The total amount of funding raised by start-ups across Chile in 2020 stands at $143.2m. In general terms, Chile is one

step behind Brazil – whichmoves practically half of the VC in the region – Mexico and Argentina, says Claudio Barahona, a managing part- ner at Alaya Capital Partners. “So Chile ismaybe at the same level as Colombia, and one step ahead of Peru, Uruguay, or other countries in Latin America,” he adds. Chilean entrepreneur Veronica

Celis, the founder of ‘tech for good’ company EnlightAid, believes the country’s smallmarket poses the biggest challenge for entrepreneurs: “You can start in Chile, but at some point you’ll have to leave the country to grow.” Technological talent is also

scarce, despite the governmentmak- ing it easier for foreigners to partici- pate in the ecosystemthrough the

introduction of a fast track visa scheme in 2017. “The need for devel- opers and chief technology officers is growing even faster than the ecosys- tem, but unfortunately the offer does not meet the demand,” Ms Enei adds.

Maturing ecosystem The good news is that entrepreneur- ship is enjoying newfound prestige. “Today, founding a start-up is well perceived andmany are enthusiastic about creating a global company. Ten years ago, when you said you were an entrepreneur, they [other people] thought you were doing it because you were unemployed,” Mr Barahona notes. According to a 2019 report by

Global EntrepreneurshipMonitor (GEM), a growingnumber of non- entrepreneurs in Chile are consider- ing founding their own start-up in the near future. Additionally, despite Chile having one of the smallest pop- ulations in the region, the International Development Bank says it has the highest start-up pene- tration per capita. “Over the past five years, there

have been signs that the Chilean start-up ecosystemis gaining matu- rity. Four years ago, there were zero Chilean start-ups supported by world- renowned accelerator Y Combinator. Fintual was the first to be selected in 2018 and today there are about nine Chilean start-ups in Y Combinator’s portfolio,” Ms Enei says.

Unexplored opportunities Santiago’s start-up fabric is made up of three key verticals: fintech, proptech and retail, saysMr Barahona. However, the potential for disruption transcends these. Chile is the world’s number one producer of copper and the second June/July 2021

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