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Country Guide

Chile

Chile
Sebastian Diaz Mesa

Guest Editor

Sebastian Diaz Mesa

Former CEO at Start-Up Chile

Sebastian Diaz Mesa is the former CEO of Start-Up Chile, one of the biggest startup accelerators in the world, where he has worked with +1000 global startups, helping them to scale and grow. Before joining Start-Up Chile, he founded Afterbang Chile, a clothing company for skiing and snowboarding and Domadores TV, a television network for University Finis Terrae, where he is also a professor.

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

Santiago

Connected Country Ecosystems

Argentina, Peru, Colombia, Brazil, US

Differentiators

  • Startup-friendly regulations: due to minimal regulation in tech, Chile is a perfect country to test pilots
  • The most stable economy in Latin America (with additional reforms coming in 2020)
  • Highly diverse ecosystem: Start-Up Chile is the biggest accelerator and its putting a lot of startups from other countries into the ecosystem
  • The Chilean government invests the second highest amount in its entrepreneurial ecosystem, and provides startups with equity-free grants
  • An important B2B market since top Latin American companies are headquartered in Santiago

Challenges

  • Relatively small B2C market (18 million potential consumers)
  • Lack of innovation in big corporations: In every ranking, the Chilean hub is number 1 in Latin America, but we are experiencing bad results in some indicators, like the amount of innovation in big corporations. This is because of a traditional mindset inside of big companies

Editor's Guide

Introduction

The stable Chilean startup landscape is currently at the final stage of a fundamental transition from a daring win-or-lose experiment to a well-established and institutionalized ecosystem. Since 2010, public institutions, universities and private actors played a critical role in:

1) Raising awareness about the benefits of entrepreneurship and disruption to boost productivity in Chile, so far plagued with the Dutch Disease of copper mining.

2) Developing a context of flexibility and simplicity by providing strong incentives to start a business in Chile for both Chileans and foreigners, by simplifying legal, tax and logistics issues, and by educating and informing about the benefits of such a flexible environment at a national and international scale.

3) Leveraging non-financial and financial assets to attract entrepreneurs and capital.

Today, a virtuous circle is in motion in Chile: startups subsidized by the Chilean government create economic, social and environmental benefits in the country, before exporting such benefits worldwide. Chile achieved a positive-sum game by boosting productivity and exports. Despite the country’s relatively small size, it is a reliable market where entrepreneurs test pilots in Latin America, since the behavior of the Chilean market closely matches bigger B2C markets (Argentina, Mexico, Central America and US markets like California, Florida, and Texas).

Outlook

The Chilean ecosystem keeps growing. During the last 10 years, the main strategy was to find as many startups as we could, to create a critical mass and a large deal flow. Now the main challenge is how can we, as an ecosystem, help all those startups to consolidate their businesses by raising private capital, growing into other markets/countries, and making them attractive for big corporations. 

In the next couple of years, we are going to see more venture funds coming to Chile due to great success cases, like Cornershop, NotCo and Destacame. Also, more and more big companies are going to be working with startups to jump into the industrial revolution 4.0.

Chile also seeks to increase its exposure on the international scene as a leader in innovation and entrepreneurship. The ecosystem already attracts entrepreneurs from all over the world, and as such strongly integrates these markets; in the next 3-5 years, it purports to expand its reach at a global level.

Focus Industries

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

FintechIn South America, the Fintech industry is growing substantially: in 2018, it broke a record with US$500 millions invested in the first unicorn of Latin America, NuBank. In Chile, the market for online banking will grow rapidly in the next few years. In 2017, 70.3% of bank clients used the web interface, and almost 35% use their telephone for banking services. There are an estimated 100 fintech companies in Chile, specializing in banking services, transfers, payments, trading, risk management, Insurtech, financial management, savings. The fintech entrepreneurial ecosystem is young (65% of the early movers started between 2014 and 2018), and so are the players (most of them are 26-30 years-old). Yet, obstacles remain: there is limited collaboration with the traditional finance industry, financing is scarce, and Chile lacks the professional/expert workforce required.
FoodtechWith 40% of the Chilean adult population considered obese, startups have taken on the nutrition problem. Chilean Foodtech startups are disrupting a very traditional industry with cutting-edge molecular science technology to create healthy and eco-friendly products. Although most of them work hand in hand with food corporations, they are characterized by their entrepreneurial spirit. The market is gaining momentum as small and big players are developing sophisticated Foodtech algorithms to create new consumer offerings and exporting worldwide.
MiningDue to shrinking copper prices, mining companies are looking to reduce operational and logistics costs, while increasing safety and productivity following recent mining accidents (Copiapo mining accident, 2010). Big data sensors for exploration, 3-D printed robots, and autonomous cargo vehicles are examples of the new technologies subsidized by the Chilean government. Today, Santiago is the city with most mining startups, surpassing other cities such as Brisbane, Perth, and Toronto.

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.

DART’s mission is to dramatically reduce rates of vision loss and blindness in adults solving its most common cause: diabetic retinopathy. It offers screening coverage by means of a platform that detects the disease automatically in digital images and allows its early diagnosis via telemedicine. (DART = Diagnosis of Automated Retinographies through Telematics). The founders include a team of expert ophthalmologists: Dr. Rodrigo Donoso (H. del Salvador ophthalmologist, U. de Chile academic, Sochiof past-president, fellow at Moorfields Eye Hospital), Mariano Pola (engineer with 30+ years developing technology-based business, Endeavor Chile '99) and José Tomás Arenas (electrical and industrial engineer, MIT TR35 Chile).

Talent

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

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

Culture and History

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

With the subprime crisis looming in 2009, and the fluctuations of copper prices in 2000-2010 due to decreasing demand from developing economies, economic diversification became a major challenge for Chile’s productivity, which is one of the government’s key pillars of economic growth along with innovation. 

In 2010, Sebastian Piñera (President of Chile) began “inserting pro-business policies including several acceleration programs aimed at improving the rate of entrepreneurship in the country. Some of the programs introduced by the government in this period include a radical redefinition about public seed-capital for startups now managed by private public agencies and institutions like business accelerators, new lines of low-cost credit for early stage entrepreneurs, programs for women entrepreneurs, the introduction of an online portal enabling company formation within 24 hours at zero cost, establishing 2012 as the year of entrepreneurship and 2013 as the year of innovation, passing legislation to make the bankruptcy process less bureaucratic, and the introduction of the innovative program, Start-Up Chile.” (Source)

Chile intended to create an innovation and tech entrepreneurial hub to position the country as the Latin American hub for startups. Giving legitimacy to the culture of risk-taking and innovation was a governmental priority, and as such, these policies served to enhance the cultural legitimacy of entrepreneurship.

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$46 million (2018)
Standard of living
Standard of living
Global rank: 74
Innovation
Innovation
Global rank: 51
Entrepreneurship
Entrepreneurship
Global rank: 19
Annual GDP growth
Annual GDP growth
4.0% (Global avg. 3.0%)
Ease of doing business
Ease of doing business
Global rank: 59
Ease of starting a business
Ease of starting a business
Global rank: 57
Research and development
Research and development
0.4% of GDP (Global avg. 2.3%)
Contract enforcement
Contract enforcement
Global rank: 54

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
19.1 million
Government
Government
Presidential Republic
Stability
Stability
Global rank: 35
Internet usage
Internet usage
82.3%
Smartphone usage
Smartphone usage
44.2%
Literacy
Literacy
97%
Population under 15
Population under 15
20%
Median age
Median age
34.4

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

Aurus VC (Santiago): Invests in growth stage companies in Latin America with a focus on healthcare, technology, and industrial tech. (Source: Aurus VC)

Austral Capital Partners (Santiago): Invests in growth stage technology-based B2B initiatives that are shaping how business is done in different industries, including retail, banking, and healthcare. (Source: Austral Capital Partners)

Chile Global Angels (Santiago): Early stage firm that helps traditional investors transition to becoming angel investors through comprehensive training. (Source: Chile Global Angels)

DadNeo (Santiago): Professional investment manager in dynamic early stage ventures. (Source: DadNeo)

Equitas Capital (Santiago): Invests in growth stage companies with a focus on environmental services, natural resources and related industries. (Source: Equitas Capital)

Fen Ventures (Santiago): Invests in early stage companies in Latin America with a focus on growth – bridging funding valleys and filling gaps in the Latin American ecosystem via comprehensive mentoring. (Source: Fen Ventures)

Magma Partners (Santiago): An early stage firm investing in startups in Latin America and global startups with Latin American tech teams that target the US market. It focuses on fintech, insurance tech, and blockchain startups. (Source: Magma Partners)

Scale Capital (Santiago): A stage agnostic private investment and management firm focused on the telecom/media sector. (Source: Scale Capital)

incubators

3ie (Valparaíso): Promotes the creation, development and acceleration of technology-based companies. (Source: 3ie)

Incubatec Chile (Temuco): Supports business initiatives with differentiation and innovation factors, and provides support and advice for R&D projects, in order to accelerate business growth in Chile. (Source: Incubatec)

IncubaUC (Santiago): Provides personalized support for advanced-level enterprises, which contributes to sales growth, private capital raising and international scaling. (Source: IncubaUC)

IncubaUdec (Concepcion): Promote technological ventures with high growth potential, through a service platform that adds value to business ideas. (Source: IncubaUdec)

accelerators

Chile Global Ventures (Santiago): Promotes the creation of innovative companies to promote new and better markets in Chile. (Source: Chile Global Ventures)

Chrysalis (Valparaíso): Finances and supports high-impact dynamic enterprises in early stages. (Source: Chrysalis)

ImagineLab (Santiago): Incubator and business accelerator supported by Microsoft Chile. Responsible for developing, transforming and enhancing innovative technology-based ventures. (Source: ImagineLab)

Innovo (Santiago): Promotes university-business engagement with a focus on science and technology based businesses. (Source: Innovo)

Magical Startups (Santiago): Digital business accelerator that provides strategic, financial advice, network of experts on key issues, and connection with large companies with a focus on artificial intelligence. (Source: Magical Startups)

Start-Up Chile (Santiago): Public startup accelerator created by the Chilean Government for high-potential entrepreneurs to bootstrap their startups and use Chile as a foundation. It does not take equity. (Source: Start-Up Chile)

UDD Ventures (Santiago, Concepcion): Trains professionals and generates knowledge that is useful and helps the country in its needs and challenges of the 21st century with a focus on promoting the values ​​of freedom, diversity and encouraging concern for public issues. (Source: UDD Ventures)

Startups Raising Capital

There’s more to be discovered! Help us showcase this startup community by adding information.

Startups Hiring

There’s more to be discovered! Help us showcase this startup community by adding information.

Coworking Spaces/Hubs

CasaCo (Santiago)

Co-Work Latam (Country-wide)

Cowo (Puerto Montt)

Housenovo (Reñaca)

IF Chile (Country-wide)

WeWork Chile (Country-wide)

conferences

Digital Summit (Santiago): Organized by Magical Startups.

Female Circle (Santiago): A meeting organized by Start-Up Chile for women leaders, startups led by people who identify with the female gender, entrepreneurs and all those passionate about innovation. (Source: Female Circle)

InnovaSummit (Las Condes): The meeting that seeks to take our country to another level in terms of innovation, with a great emphasis on the development of Venture Corporate Capital. (Source: InnovaSummit)

Startup Vertex, Start-Up Chile (Santiago): Seeks the meeting point between innovation, technology, startups, companies and all the variables of the entrepreneurial ecosystem. (Source: Startup Vertex, Start-Up Chile)

Startup Weekend Santiago (Santiago): A 54 hour event that brings together Santiago designers, developers, entrepreneurs, and experts from all domains to do amazing things. (Source: Startup Weekend Santiago)

meetups

Santiago Startup Founder 101 (Santiago): Brings together aspiring and experienced tech entrepreneurs to discuss, meet, and collaborate to build great new startups, and to push the local startup ecosystem forward. (Source: Meetup)

Startup Grind Santiago (Santiago): The largest independent startup community, actively educating, inspiring, and connecting entrepreneurs globally in partnership with Google for Startups. (Source: Meetup)

Government Programs

CORFO (Corporación de Fomento de la Producción de Chile): Chilean government’s development agency in charge of supporting entrepreneurship, innovation and competitiveness in the country along with strengthening human capital and technological capabilities. (Source: CORFO)

Sercotec: A private law corporation, under the Ministry of Economy, Development and Tourism, dedicated to supporting micro and small businesses and entrepreneurs in the country. (Source: Sercotec)

Non-Government Organizations

Endeavor Chile: Provides strategic support for entrepreneurs to grow, impact and boost the economic and social development of the country. (Source: Endeavor Chile)

Girls in Tech Chile: Identifies, connects and gives visibility to technology creators in Chile, making them sources of inspiration and specific knowledge for other women. (Source: Girls in Tech Chile)

Universities

Empretec Chile - Universidad Mayor (Providencia): Provides funds for students who wish to develop an idea and transform it into an entrepreneurial activity with honesty, respectability and adjusted to personal, social and ethical values ​​within the Universidad Mayor. (Source: Empretec Chile - Universidad Mayor)

Pontificia Universidad Católica de Chile (Santiago): University has an innovation center that promotes a culture and an environment for innovation and entrepreneurship in the university and in the country, through meetings, networking and the promotion of joint projects between the University, the private sector and the public sector. (Source: Pontificia Universidad Católica de Chile)

Universidad de la Frontera (Temuco): Promotes a culture of innovation with a focus on economic and social impact. (Source: Universidad de la Frontera)

Universidad del Desarrollo (Concepcion, Santiago): Creates an interactive and dynamic environment on campus where innovation and new ideas are constant, with a focus on ethics and public responsibility. (Source: Universidad del Desarrollo)

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