Best Cities to Create a Startup in Latin America
Best Cities to Create a Startup in Latin America
Latin America annually grows as an ecosystem where new startups can be developed. It is important to highlight that several cities in the region are being globally described as competing spaces, sharing level with such traditionally technological and enterprising cities as New York, London, Singapore and, of course, Silicon Valley.
Over the past years, outstanding ecosystems have been boosted in cities like Mexico City, Santiago, Medellin, Buenos Aires or Sao Paulo, with global scope, and buttressed by a business-friendly environment, immense wealth of talent, access to funds and close relations with universities. A growing number of foreign companies and investors have focused their eyes on Latin America, willing to explore and conquer new scenarios.
Brazil was the first access point for investors from Silicon Valley and it still stands out as the region’s epicenter. Argentina, Colombia, Mexico and Peru are also hubs for technological startups. Chile is already known as “Chilecon Valley” and, according to some estimates, the emerging technology-related companies in the region have been given over two billion dollars in terms of funding over the past five years. According to the Global Startup Ecosystem Report, 21 percent of local startups are created by foreigners.
In Silicon Valley, the biggest innovation hub of the world, 46 percent startup founders have come from abroad and that is the highest rate around the world. It is closely followed by Berlin y London, two of the leaders in this field. In Latin America, Mexico City has reported 22 percent of immigrants linked to this ecosystem, while Santiago is also high on the leaderboard – 20th position –, with 21 percent of startup founders coming from other countries. The level of foreign attraction and investment shown by the main cities in the Latin American startup ecosystem puts on the table the interest in fostering its business development. These are the best cities in the region to launch a startup.
According to Startup Genome, the strength of the travel industry and service sector in Mexico City have allowed people to develop a dynamic startup ecosystem that stands out for its talent, diversity and creativeness. Over 600 startups have been registered, as well as a solid network of events and communities designed to support entrepreneurs, such as Techstars Startup Weekend, Hackers and Founders and Startup Grind, which have helped the ecosystem grow in an organic and sustainable way.
Mexico represents 14 percent of the startup ecosystem in the entire region. The city features another key asset: its proximity to the Unites States, which provides significant market and funds potential. Such giants as Amazon, Google, Twitter, Facebook and other technological companies, as well as WeWork en Latinoamérica, have stepped in Mexico City with an intense growth plan. We cannot forget Guadalajara, which has become the “Mexican Silicon Valley” due to the innovations implemented by the government in terms of infrastructures and the fact that investors are making the most of the growing numbers of science and technology graduates.
São Paulo (Brazil)
São Paulo is the most important South American city to develop a startup, also fostered by the extraordinary development of the technological sector in the country. São Paulo is the most powerful economy in the south hemisphere and its State’s GDP is bigger than the combination of those reported by Argentina, Chile, Uruguay, Bolivia and Paraguay. It houses several international companies and a dynamic ecosystem for emerging companies. The city has great access to funding, as well as significant local market and talent reserve made up of over 10 million people.
Santiago de Chile
The Chilean government developed a pioneering program aimed at an attracting and developing startups, named “Start-Up Chile”, which has been later applied by other countries in the region. The positive outcome of this experience has caught the eyes of investors at international level. Moreover, it is benefited by a highly-stable legal and political framework. Chile has a muscle economy, minimum investment risk and strong tax system, which have had a direct impact on the labeling of its capital as one of the main hubs to develop the Latin American startup ecosystem.
The reinvention of Medellin is a case to be studied by universities. It was one of the main crime dens of the world and has presently become an example of urban, technological and cultural development. The Colombian government has favored the growth of startups by applying tax incentives and creating incubators like Creame. An investment of over 389 million dollars was announced in 2013 and said to be used through 2023 in a bid to develop the technological industry, attract talent, foreign capital and strengthen its startup ecosystem.
Argentina represents 19 percent of the emerging entrepreneurial ecosystem and its capital has strengthened its position as a perfect city for young entrepreneurs. The municipal government has promoted an array of initiatives over the past years in an effort to boost this ecosystem, such as the creation of a program funded with 5 million dollars to support startup accelerators focused on facilitating its market inclusion... This idea has given birth to a wide range of projects, with great global, like travelers’ platform Despegar or Pixowl mobile videogame developer.