We could say that in the last 20 years Chile has had two great waves of startups creation, mainly of a technological focus and with a focus on regional or global sales. One of them occurred at the end of the last century and at the beginning of this, given by the boom of the “dotcom”. Few remain from that time. Perhaps one of the best known in Chile is Mapcity and at the regional level, Mercado Libre. How the “bubble” of that world burst in the first half of 2000 is another story.
The second wave began more timidly, a decade later, with the creation of Start-Up Chile in 2010, a kind of spin off of Corfo to accelerate companies, which initially called for startups from more than 20 countries. This put our country on the map of entrepreneurs around the world and in the eye of international venture capitals. The massification and low prices of technology (apps, cloud computing, telephone networks, etc.) was the best incentive for the launch of hundreds of Chilean startups that began to think beyond borders. Furthermore, Latin America is beginning to be seen as a fertile and little explored terrain for venture capital (VC). It arises in the Rappi region and Mercado Libre grows. In 2019 Softbank treads Latin America with US $ 500 million in its pocket.
It is precisely in this decade where some Chilean icons begin to emerge, such as Cornershop or NotCo. Not only are they global, but they are in the crosshairs of giants like Walmart, Uber or Jeff Bezos (CEO of Amazon). In recent years, it has become everyday how various Chilean startups that operate in various countries raise Series A, B or other investment rounds. In Chile several funds are emerging and family offices are beginning to get excited. More entrepreneurs are encouraged, as if the pandemic, the social explosion or the political and economic issues, were just another hurdle to jump. In this breeding ground, another local icon appeared this week: Betterfly. With an announcement on a giant screen in Time Square (New York), the company founded by brothers Eduardo and Cristóbal Della Maggiora received US $ 60 million in a Series B investment round (the highest amount of a Chilean startup at that stage), valuing itself at US $ 300 million.
All this history is key to trying to understand the third boom that Chilean startups are experiencing at this time. Although the Global Competitiveness Report (IMD) ranked our country in 44th place worldwide, dropping 6 points, Chilean entrepreneurial activity in its initial stage, ranked second globally. What are the reasons for this new rise in the startup ecosystem?
For Hernán Cheyre, director of the Centro de Investigación Empresa y Sociedad, CIES, of the Universidad del Desarrollo, the “case of Betterfly, added to that of NotCo, shows that the entrepreneurial capacity in Chile is high and that it is perfectly possible to have business ventures. global scale having started in Chile. Many people say that it cannot be done, but digital technologies make it possible to challenge operators that are in any market, and in Chile there is good capacity for that ”, says the former executive vice president of Corfo, under whose mandate Start-Up Chile was created.
On the impact of the health crisis, Cheyre is clear and admits that “the pandemic more than ever creates the conditions for new ventures to be very powerful. Now innovative solutions to problems are needed, therefore, I think the field is more open for new ventures to take place, because there are new needs to be solved ”.
Magdalena Guzmán, executive director of the Chilean Venture Capital Association (ACVC), emphasizes that growth such as Betterfly “will occur more often and we will be surprising each month with this news. These ventures are attracting world-class foreign investors such as Softbank, which is super relevant, because it is the largest fund in the world. This is because in Chile there is a super developed talent, of good quality and it has shown that it is prepared to disrupt the industry that has been super traditional for years ”.
For his part, Roberto Camhi, entrepreneur and founder of Mapcity, acknowledges that the Betterfly case caught his attention in a very positive way. “Políglota, NotCo, Cornershop, Betterfly, have made capital raises that are no longer in the Chilean VC models, of 200 or 500 thousand dollars, but are already in series A or B rounds of 3, 4, 5, $ 10 million or more. That totally changes the scenario of scalability, acceleration and global growth potential. I believe that there is a contagion effect that is super positive and that it does very well ”, says the author of the book“ Think backwards ”.