Entrepreneurship is on the rise south of the border. Latin America continues to foster, develop and grow a start-up scene that is in itself becoming a major draw-card for entrepreneurs globally.
Having been overshadowed economically by the northern half of the continent for so long, many Latin American governments have made a concerted effort to change the status quo. According to Biz Latin Hub, a leading startup within the Region, “There is a sense of renewal within the sector, which is helping to foster a startup scene perfect for developing and fostering market challenging ideas and product’s. We expect big things to come from Latin America within the coming months and years”
Today, which is difficult to fathom only a few years ago, many cities within Latin America can, and are being compared to New York, London, and Silicon Valley – traditionally enterprising, technology-driven cities, and great startup hubs.
Over the past few years, many Latin American cities have set about creating the environment to develop, and retain a startup ecosystems; striving to attain parity with, or even surpass many of the traditional startup hubs of North America.
With low operating costs, minimal barriers for market entry, a burgeoning middle class and an ever-increasing access to both local and foreign funding, these Latin American cities are primed for the harvest. With that in mind we have set about exploring below some of the cities and what they have to offer.
Chile’s pioneering accelerator program, Start-Up Chile, has gone on to set the standard for many other countries in the region on how to attract and aid startup development.
The results of this program have largely been positive, leading investors the world over to sit up and notice.
Santiago has been the major beneficiary of this program in the country, quickly assuming the title of Chile’s economic and financial center.
Indeed, for all intents and purposes, it has been dubbed ‘Chilecon Valley’, a testament to its improving standing in the international startup scene.
Interestingly, 21 percent of all local startups are set up by foreigners. With access to funding grants of up to $40,000 for interested investors, a deregulated economy, a fast-tracked business registration process, low tax rates, a stable political scene and minimum investment risk, it is no surprise that investors have come in droves.
Sao Paulo, Brazil
The Brazilian economy is rapidly developing, and Sao Paulo is leading this advancement. Sao Paulo has enjoyed an amazing transformation in its technological sector in recent years.
The state alone boasts a greater GDP than Chile, Argentina, Paraguay, Uruguay, and Bolivia combined. Its dynamic and exciting business environment provides startups with unlimited opportunities for growth and expansion, and allows for valuable business contact building.
Startup Brazil, Brazil’s own national startup initiative provides support not only to emerging startups, but also to companies on the scene for less than four years. Physical infrastructure, investment, training, and legal advice are all made available to participating companies. While the Tech Sampa program aims to attract innovative technological ventures.
Colombia’s surprising transformation has hardly flown under the radar due to its swift and largely unexpected nature. Once known as the crime den of the world, Medellin has undergone massive urban and technological development. Using favorable tax incentives, the Colombian government has set about making this country a hot prospect for startups. The hugely successful Colombia Startups Meeting which hosted 1,500 attendees, with 164 of those being investors, was a clear indication of the nation’s progress in this regard.
The innovative, local government backed program, Ruta N, aims to boost new businesses promoting and strengthening the innovative, scientific and technological development in Colombia. This program supports new businesses in their PR, recruitment, and finance departments; key departments for overall company growth. This collaboration between the local and national government towards economic growth has yielded great results. In 2013, Medellin was recognized by the Urban Land Institute as the most innovative city of the year, a facet of its development that appeals to young tech entrepreneurs.
Buenos Aires, Argentina
Argentina’s largest city is also its capital city but that’s certainly not its most striking element. Not anymore, at least. Buenos Aires is known as Argentina’s financial and commercial center, and one of South America’s most cosmopolitan cities. As a result, it is the most dynamic startup hub in the region. With a vibrant group of tech workers valued the world over, there is no doubt that Buenos Aires is poised to become South America’s most promising startup hotspot.
An array of initiatives have been promoted by the municipal government over the past few years in its bid to boost its economic hub. With the provision of about $5 million for startup support by the municipal government, the government is looking to further improve the scene.
The seed fund accelerator program, NXTP Labs is locally popular for its provision of seed investments to the tune of $25,000 in emerging startups.
A cheap lifestyle coupled with cheap labor rates certainly does its chances of progression in the international startup scene no harm.
Monterrey is widely known for its ranking as Mexico’s richest city, and that has in no small way boosted its appeal to startups. It is generally considered one of the best places to do business in Mexico, despite Mexico being one of the Latin American nations with the strongest business ties to the US. Over the last 15 years, the tech industry in Monterrey has grown about three times faster than the world’s average.
Monterrey has largely benefited from a steady support framework for businesses, and an inviting funding system. The incubator program, Startup Studio Monterrey, a Mexican startup incubator program, has been set up to invite entrepreneurs by providing them with exciting projects in the IT sector, within specialized workplaces. No fees are required to enter, but the program takes 6 percent of the profit from each project. The continued growth of the state economy plus Mexico’s forward-driven initiatives certainly bodes well for investors.
Companies like Drafiti and Mercadolibre have gone a long way to show just how much growth awaits the technologically innovative entrepreneur in Latin America’s hottest startup hotspots, with many of the startups taking advantage of the business opportunities available within Latin America.
Emmy Skylar started working for Debate Report in 2017. Emmy grew up in a small town in northern Manitoba. But moved to Ontario for university. Before joining Debate Report, Emmy briefly worked as a freelance journalist for CBC News. She covers politics and the economy.