The Start-Up Chile accelerator was arguably the spark that ignited Chile’s entrepreneurial ecosystem. The Chilean government, through the development agency CORFO, founded Start-Up Chile in 2010 as a way to bring in foreign entrepreneurs who would galvanize Chile’s transition into an economy built on technology and innovation. Since then, Start-Up Chile has accelerated over 1,500 startups, of which 51.1% were still operating in 2016.
When it was first founded, the program was meant to “change the nation’s culture towards entrepreneurship and to position Chile as the hub of innovation for Latin America,” but its impact has significantly surpassed that goal. While economic growth was not one of the goals CORFO originally planted in 2010, Start-Up Chile companies have collectively raised US$30.5M in Chile and over US$420M abroad. Meanwhile, these startups have created at least a total of 5,162 jobs in Chile and across the globe as of 2016.
Start-Up Chile set out to enact social and cultural change and to place Chile at the center of the Latin American startup ecosystem. However, measuring its success requires going beyond the economic value of the accelerator. After all, Start-Up Chile emphasizes that they want startups to get more out of the program than just the money (US$40K equity free in the Seed program). These companies receive mentorship, entrepreneurship training, and opportunities to raise capital, while also becoming part of a global network of more than 3,000 entrepreneurs worldwide.
So what impact has Start-Up Chile had on a global scale? From Cabify to CargoX, the accelerator has supported some of the most successful companies that are operating in Latin America today. Many of these startups have expanded globally, raising hundreds of millions of dollars, and have dominated in their industries. One of the best ways to analyze the impact of Start-Up Chile is through their eyes, which allows us to understand how the accelerator boosted them to reach international success.
Here are some of the ways Start-Up Chile has prepared tech startups to tackle the global market.
Teaching founders to ignore the startup hype and create a valid MVP
Statistics show that between 70%-90% of startups fail. Raising capital doesn’t seem to help, as 75% of startups that do also fail. Experts and entrepreneurs tend to attribute failure to a lack of focus on building a product that solves an actual problem and Start-Up Chile is meant to provide entrepreneurs with the time and space they need to find product market fit.
Thomas Allier, the CEO and Co-Founder of Viajala, noticed that his most successful peers in Start-Up Chile in 2013 were those that were “working silently with a strong focus and without making much noise.” Few of the companies that had won unofficial ‘awards’ such as “Most-likely-to-IPO” are still operating today, said Allier. He is adamant that Start-Up Chile’s focus on building a viable MVP was the secret to their success.
Beyond giving him time to focus on developing his product, Start-Up Chile taught Allier to launch early, and with the right people on board from the start. The program also made it possible for him to do so. “Start-Up Chile gave Viajala early recognition that enabled me to get the right people on our bus. We are still out there and growing five years after starting the program because we had the discipline to launch extremely early on which gave us enough time for a few iterations and a growing line of revenue.”
Today, Viajala is the single largest travel metasearch company in Latin America. They process over 3.5 million travel searches each month and have already reached yearly revenues of over US$3M, all with having raised relatively little capital. Beyond the grant from Start-Up Chile, Viajala raised less than half a million dollars to date. They currently employ more than 20 people across four countries in Latin America, running Viajala out of their headquarters in Medellin, Colombia.
The value of building a global network
The Start-Up Chile network includes over 3,000 entrepreneurs from 1,500 startups across the globe. Ranked by some as fourth best startup accelerator in the world, and the best in Latin America, Start-Up Chile carries with it a sense of community that follows startups throughout their lifetimes. The Intern Group, a company that helps students access international internships, has maintained an office in Santiago since they participated in Start-Up Chile because the network and ecosystem are so strong and supportive.
While The Intern Group has headquarters in London, UK, CEO and Co-Founder, David Lloyd, considers the contacts he made during the program among his closest friends and mentors. “Meeting with as many other Start-Up Chile companies in my generation as possible was key. Some of these people turned into lifelong contacts,” he comments. The network provided by Start-Up Chile has helped The Intern Group maintain a strong presence in Latin America, where they have offices in Santiago and Medellin.
Since participating in the accelerator, The Intern Group has grown from a yearly revenue of less than US$10K to almost US$15M in just six years. While their first program had only ten students, The Intern Group now hosts over 2,000 students per year. Lloyd emphasizes that the money, while helpful to an early-stage startup, was the least important part of the experience. “The US$40K was great but small fry in comparison to the environment, learnings, and the network we made.”
Putting Chile on the global map as an entrepreneurship hub
When Start-Up Chile debuted in 2010, the small country gained significant publicity. Since then, the accelerator has been one of the leading factors in putting Chile at the center of the global conversation about Latin American entrepreneurship. Over 9,700 articles have been written about Start-Up Chile across 141 countries, and the program has inspired 50 government-funded accelerators worldwide, from Jamaica and Puerto Rico to Peru and South Korea. Numerous growing companies like Cabify, CargoX, Doist (creator of Todoist), Datacampfire, Slidebean, and Keyword Tool owe at least part of their success to the network, funding, and training they received from Start-Up Chile.
Most importantly, many of these companies continue to operate in Chile, or at least in Latin America. Some of Start-Up Chile’s critics often point to the fact that some companies take advantage of CORFO’s generosity and leave immediately after the program. However, more than one-third of the companies that have gone through Start-Up Chile maintain an office in Chile, and a more substantial proportion continue to operate and provide services in Chile and Latin America. Chile now ranks 7th in the world for total entrepreneurial activity and accounts for 50% of the entrepreneurial activity in Latin America.
Start-Up Chile has undeniably placed Chile on the map as a hub of innovation in Latin America and around the globe and has enabled the growth of many of the startups that are dominating the Latin American market today.