Country Guide

Argentina

Argentina
Martin Frankel

Guest Editor

Martin Frankel

Founder and Managing Partner at AreaTres

Martin Frankel is the Founder and Managing Partner at AreaTres, Argentina’s first and leading co-working space and innovation hub. Martin launched AreaTres Soho in March 2009, and has since expanded the AreaTres network to include several other locations in Buenos Aires. Over the past decade, AreaTres has cemented its position as the foremost connector of Buenos Aires’s entrepreneurial ecosystem. In 2017, AreaTres became the exclusive Google for Startups partner in Argentina (and 1 of only 2 partners in LatAm).

Guest editors are local ecosystem leaders: successful founders, investors, or thought leaders. Have someone in mind? Nominate a country guest editor.

Disclaimer: all content within the Startup Ecosystem Summary and Editor’s Guide sections is written by and reflects the personal perspective of the guest editor. The guest editor is not responsible for content within the Country Snapshot and Community sections, as much of this content is compiled from external sources and does not necessarily reflect the guest editor’s view.

Startup ecosystem summary

Key Startup Cities

Buenos Aires (CABA), Cordoba, Rosario, Mendoza

Connected Country Ecosystems

Chile, Uruguay, Paraguay

Differentiators

  • Deep talent pool of highly skilled tech talent of developers and designers
  • A wealth of Inspiration and experience given 5 local Unicorns (Mercadolibre, Globant, Despejar.com, OLX.com and now auth0)
  • Lower cost basis is a strong competitive advantages Argentina has, especially regarding technology and scientific talent. For example, a top-tier developer can cost 1/3rd of a comparable developer in the US and a scientist 25% of their US-counterpart, according to the Argentine Scientific Society

Challenges

  • Lack of (ad)venture capital: There’s plenty of talent and compelling opportunities, but also a lack of capital. There are numerous structural and macro-economic rationales behind this reality, but this is slowly changing as the region becomes increasingly attractive. SoftBank’s new US$5 billion Innovation Fund has brought much visibility to the region and hopefully more VC activity will follow
  • Weak financial culture and short-sighted capital: A long-standing shortage of financial planning and short-sighted capital requirements (due to economic volatility which makes longer-term planning a challenge) combine to work against entrepreneurs having the runway to validate business models with investors often having short time-horizons
  • High effective tax rates

Editor's Guide

Introduction

March 2017 saw the passing of the Entrepreneurs Law in the national congress with a unanimous vote. That was the tipping point in which it became clear that entrepreneurs and SMEs are the growth engine of the economy, especially in a country like Argentina that unfortunately is accustomed to overcoming economic crisis. 

Currently the talent of the Argentina entrepreneurial ecosystem goes beyond our borders and is viewed favorably around the world. The many economic crises have forced Argentines to be creative and full of resolve, but the currently evolving macroeconomic conditions hamper growth. 

Incredibly high tax rates impact all industries and place a huge burden on startups that are in the process of validating their business models in their initial stages. The passing of the recent Knowledge Industry Law has set the stage for these tax-burdens to lighten for startups as it includes a considerable tax reduction for nascent startups that meet the requirements.

Outlook

Argentina’s strength in the coming years will be without doubt all those solutions related directly or indirectly to FinTech, AgTech, big data and machine learning. FinTech for example saw 110% growth for 2018 v. 2017 (Accenture + IBD study). 

Big data is surging as a category, and in 2017 the National Big Data Observatory was launched with the objective of charting the evolution of the technology as it relates to opportunities for innovation, public use, and potential benefits to the political, economic and social arenas with participation coordinated through the Ministries of Justice and Human Rights, Modernization and Science, Technology and Productive Innovation. 

A key condition that exists today, but needs to be enhanced, is a greater collaboration between the different key actors of the entrepreneurial ecosystem, both public and private and throughout the entire country, thereby making available valuable resources to startups with high growth potential.

Focus Industries

Editor’s choice of the industries with the most potential for technology disruption and growth.

AgtechThere is a running joke that Argentina’s biggest exports are Soy and Software. Add entrepreneurial talent to that mix and it is easy to understand the opportunity here.
Artificial IntelligenceA study conducted between Everis & Endeavor found that Argentine AI-focused companies have the highest revenue in the region with US$3.2 million in 2017.
FintechThe sector grew 150%+ in the last 2 years, bringing solutions to a market where 53% of the adult population does not have a bank account and 70%+ of the population does not trust financial institutions, whether they have a bank account or not. (World Bank)

Featured Tech Startups

Editor’s choice of the country’s top 10 emerging tech startups.

Startup Showcase

Editor’s pick of which ‘Featured Startup’ is especially worth following and why.

Ualá is a personal financial management mobile app developed in Argentina linked to a prepaid Mastercard that allows users to conduct financial transactions, such as transferring money and making payments and purchases, both in Argentina and abroad. With Ualá, users can manage their money through their cell phones without having a bank account.Ualá was the first prepaid Mastercard in Argentina and in late 2019 raised US$150 million from Tencent and Softbank just 2 years after its launch. It has 600,000+ users, which represents 1.5% of the Argentine population.

Talent

Editor’s perspective of the maturity level of talent in the ecosystem.

  • Technical TalentAdvanced
  • Marketing TalentModerate
  • Experienced TalentAdvanced
  • International TalentAdvanced

Culture and History

Editor’s commentary on how the country’s culture and history have impacted the ecosystem.

Inflation, economic crisis and ever present instability are everyday realities for Argentina entrepreneurs going back at least 3 decades. 

With that reality, entrepreneurship lends itself to the “figure it out and make it happen” spirit in the country. Argentina is top-20 globally as it relates to number of entrepreneurs–1 in 7 Argentines is involved in some type of entrepreneurial endeavor and 60% of Argentine youth prefers the entrepreneurial path to that of a traditional job. Only 6% of entrepreneurs whose business fails decide to never run the risk of entrepreneurship again. (Failure Institute annual report).

Interested in becoming more involved in this ecosystem and connecting with local ecosystem leaders? Let us know.

Country Snapshot

Economy

Startup funding
Startup funding
US$84 million (2018)
Standard of living
Standard of living
Global rank: 87
Innovation
Innovation
Global rank: 73
Entrepreneurship
Entrepreneurship
Global rank: 85
Annual GDP growth
Annual GDP growth
-2.5% (Global avg. 3.0%)
Ease of doing business
Ease of doing business
Global rank: 126
Ease of starting a business
Ease of starting a business
Global rank: 141
Research and development
Research and development
0.5% of GDP (Global avg. 2.3%)
Contract enforcement
Contract enforcement
Global rank: 97

Sources

Startup Funding: LAVCA
STANDARD OF LIVING: International Monetary Fund - GDP per capita (PPP)
INNOVATION: Global Innovation Index
ENTREPRENEURSHIP: Global Entrepreneurship Index
ANNUAL GDP GROWTH: World Bank
EASE OF DOING BUSINESS: World Bank
EASE OF STARTING A BUSINESS: World Bank
RESEARCH AND DEVELOPMENT: World Bank
CONTRACT ENFORCEMENT: World Bank

Society

Population
Population
45.2 million
Government
Government
Presidential Republic
Stability
Stability
Global rank: 61
Internet usage
Internet usage
74.3%
Smartphone usage
Smartphone usage
46.9%
Literacy
Literacy
98%
Population under 15
Population under 15
25%
Median age
Median age
31.7

Sources

POPULATION: Worldometers
GOVERNMENT: The World Factbook
STABILITY: Global Innovation Index
INTERNET USAGE: International Telecommunications Union
SMARTPHONE USAGE: Newzoo
LITERACY: World Atlas
POPULATION UNDER 15: World Bank
MEDIAN AGE: The World Factbook

Community

Active Investors

54 Ventures (Buenos Aires)

Aconcagua Ventures (Buenos Aires): Focused on e-commerce and software-as-a-service.

axventures (Buenos Aires)

BACP (Buenos Aires)

Cygnus Angels (Buenos Aires)

DCDB Group (Buenos Aires)

Draper Cygnus (Buenos Aires)

Genii Capital (Luxembourg)

Grupo Pegasus (Buenos Aires)

Kaszek Ventures (Buenos Aires)

Victoria Capital Partners (Buenos Aires): An independent private equity firm focused on investments in South America.

incubators

Enablis (Buenos Aires): In 2018, Enablis Argentina launched a new program called Enablis ScaleUp Program aimed at supporting founders of innovative startups in expansion stages. The program approaches the possibility of scaling your startups globally using as a launch and support platform the excellent network that our organization has in Canada. Among the benefits that our members of the ScaleUp Program access, we highlight the mentoring of Canadian senior executives and successful entrepreneurs; internships and strategic advice from the MBA at Stanford, MIT and McGill-HEC; monthly peer support group meetings; and Canada Immersion Week, the culmination of the program. (Source: Enablis)

IncuBAte (Buenos Aires): A program that stimulates the strengthening and consolidation of innovative ventures in the City, through personalized support and the possibility of accessing a Non-Refundable Contribution and workspace. This initiative is aimed at commercial, productive, social and technological projects of high impact in the City with an age not exceeding 4 years. (Source: IncuBAte)

Incubatec (La Pampa): During the incubation process, the incubator provides companies with services in financial, technological and operational aspects. (Source: Incubatec)

Njambre (Buenos Aires): A social impact innovation business accelerator that identifies early stage impact entrepreneurs with high potential to create sound social businesses. (Source: Njambre)

Socialab Argentina (Buenos Aires): Programming includes open innovation challenges, workshops, and access to a network of social entrepreneurs. (Source: Socialab Argentina)

accelerators

Aceleradora Litoral (Santa Fe): An accelerator that invests up to US$500,000 in science-based companies. (Source: Aceleradora Litoral)

Cities Startup (Santa Fe): Offers investment up to US$500,000 as well as laboratories and equipment and access to a network of mentors. (Source: Cities Startup)

Eklos (Buenos Aires): The startup accelerator of Cervecería y Maltería Quilmes (part of the AB InBev family ), one of the most important beverage companies in the region. It offers a 6-month accelerator program including investment, mentors from Endeavor and Facebook Argentina, and leaders from Cervecería y Maltería Quilmes. (Source: Eklos)

Glocal (Santa Fe): Glocal is the first Latin American Accelerator for both startups and mid–sized established companies in the Agriculture sector. It focuses on the farming and food industries (agritech, biotech, agri-fintech, agri-insurctec). (Source: Glocal)

Grid Exponential (Buenos Aires): A biotech focused Company Builder. Twenty biotech-based projects go through a 3-month program starting in March, to get immersed into the startup world and to match with business entrepreneurs. Grid Exponential selects 10 of these projects to go from scientific project to startup. It invests up to US$200,000. (Source: Grid Exponential)

Incutex (Cordoba): Invests and promotes a maximum of 3 startups per year in LATAM. Incutex offers up to US$100,000 as well as access to the Incutex network composed of more than 100 mentors, investors, and entrepreneurs. (Source: Incutex)

Mayma (Buenos Aires): MAYMA is an acceleration program for social and environmental impact enterprises. (Source: Mayma)

Parabolt (Buenos Aires): A company that transforms innovative ideas into disruptive and scalable businesses. It incubates its own concepts as well as ideas generated by Latin American entrepreneurs and large corporations to transform them into disruptive digital products and collaborative platforms. (Source: Parabolt)

The Yield Lab (Buenos Aires): Launched in 2017, The Yield Lab LATAM was conceived to take a leading role in building and nurturing the emerging AgTech ecosystem in Latin America by supporting entrepreneurs, bringing together public and private stakeholders, providing funding and driving the “market making” needed to support the long term growth of the sector. The accelerator program meets over the course of the calendar year, and invests up to US$100,000 into early stage technology companies that sustainably revolutionize agrifood systems globally. (Source: The Yield Lab)

Wayra Argentina (Buenos Aires): Wayra connects technology disruptors with telecom corporation Telefónica to generate joint business opportunities. It operates through 11 hubs in 10 countries within the Telefónica footprint: Argentina, Brazil, Chile, Colombia, Germany, Mexico, Peru, Spain, the United Kingdom and Venezuela. (Source: Wayra)

YAVU (Buenos Aires): YAVU is an Accelerator & Venture Studio that partners with great teams to craft extraordinary startups. Through its 4 month accelerator program, YAVU invests up to US$100,000 per company and offers hands-on mentorship. (Source: YAVU)

Startups Raising Capital
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Startups Hiring
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Coworking Spaces/Hubs

Areatres (Buenos Aires)

Belephant (Buenos Aires)

El Origen (Buenos Aires)

GoWork (Buenos Aires)

HIT Cowork (Buenos Aires)

Huerta (Buenos Aires)

La Maquinita Co. (Country-wide)

La Ofi (Buenos Aires)

Manawa Coworking (Buenos Aires)

MusicHub (Buenos Aires)

The Office BA (Buenos Aires)

WeWork Argentina (Buenos Aires)

conferences

ASEA Events (Buenos Aires)

Campus Party Argentina (Posadas): An annual week-long, 24-hour-a-day technology festival. Thousands of hackers, developers, gamers and geeks equipped with laptops camp out in tents on-site for the conference and hackathon. (Source: Campus Party Argentina)

meetups

Aging 2.0 (Buenos Aires): Aging2.0 Buenos Aires Chapter opened its activities in December 2018 and hosts regular events. It is a network composed of innovators, entrepreneurs, investors, researchers, technology people and also older adults, professionals and institutions, interested in improving the quality of life of the segment, with emphasis on overcoming technological barriers. (Source: Aging 2.0)

TensorFlow (Buenos Aires)

Government Programs

Academia Buenos Aires Emprende (Buenos Aires): BA Emprende Academy is a free training program that takes place in different parts of the City, seeking to maximize your entrepreneurial skills. (Source: Academia Buenos Aires Emprende)

Consejo Consultivo Emprendedor (CCE) (Mendoza): The Entrepreneurial Consultative Council was created in June 2015 with the objective of providing Mendoza with a tool that allows the development of entrepreneurial activity with its corresponding institutionalization with a long-term vision and that transcends the particular efforts of each government. (Source: Consejo Consultivo Emprendedor)

Ministry of Production’s Incubators Network: A government-sponsored database of incubator programs throughout the country.

Non-Government Organizations

ASEA: The Association of Entrepreneurs of Argentina is an NGO that looks to promote entrepreneurship in Argentina, through the influence in public policies and the accompanying of entrepreneurs throughout and width of the country. (Source: ASEA)

Chicas en Tecnología (CET): An Argentine non-profit civil society organization that since 2015 seeks to reduce the gender gap in technology. Through its programs and initiatives it motivates, trains and accompanies the next generation of women leaders in technology. (Source: CET)

Emprear (Buenos Aires): EMPREAR is a non-profit, non-partisan and autonomous non-governmental organization (NGO) in Argentina. It was born after the crisis of 2001 with the objective of spreading the entrepreneurial spirit of the nation and promoting the creative capacity of economic and social value of the most innovative entrepreneurs and agents of change. (Source: Emprear)

Endeavor Argentina: Since 1998 Endeavor has been present in Argentina, contributing to the development of the country through the promotion of entrepreneurial culture. (Source: Endeavor Argentina)

FAN (Buenos Aires): A foundation dedicated to promoting the development of projects and ventures with nanotechnology and spreading nanoscience and nanotechnologies in the different spaces of Argentine society. (Source: FAN)

Wingu: A nonprofit that helps ensure other organizations have everything they need to seize the opportunities of the web, providing strategic & technical support and training on topics such as web sites, databases and CRM management tools, social media and email marketing. (Source: Wingu)

Women in STEM Entrepreneurship (WISE): A program aimed at promoting the integration of women in STEM areas in the entrepreneurial ecosystem. (Source: WISE)

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