Start-Up Chile, the Chilean government’s program created in 2010 to attract innovative startups from all over the world, has put the country under the spotlight. It offers a most attractive package consisting of a USD 40,000 equity-free grant, plus a one-year visa, plus a 6 months-long mentoring. Start-Up Chile is now the largest and most heterogenous startup community in the World: as of november 2014, more than 2,000 startups had been through the program. Lately, postulations to Start-up Chile skyrocketed to 2,448 applications, for the 12th generation that will count a hundred startups only.
And Start-Up Chile is only the visible part of the iceberg. Successive Chilean governments have undertaken to diversify the economy, still largely dominated by the mining and banking industries, by implementing numerous policies to create an attractive innovation hub. The Chilean Economic Development Agency (CORFO) has about 50 programs to support entrepreneurs, including foreign ones.
Chile is also long known for being the most stable and open country to do business in Latin America, ranking 13th in The Economist’s Business Environment Index and 21st in Transparency International’s Corruption Index. It ranks even better than countries like France, Germany or Austria! Add to this that the market is quite attractive, with an amazingly steady economic growth since the late 1990’s (5.38% on average).
The internet and mobile penetration rates are among the best of the continent. Funny fact, Chile registered about 21 millions phones in 2011, for 16 millions inhabitants only! Social Media are widely and actively used among the population, which has definitely adopted the Smart Phone (smartphone penetration rate is above 25%).
As a conclusion, Chile is one of the very best place to base a South America wide business. Last but not least, Chile recently negotiated a trade agreement with Mexico, Colombia and Peru (The Pacific Alliance), which in the mid-run should reinforce the integration with the most promising tech market in Spanish-speaking Latin America: Colombia and Mexico.
PROS
- Emerging start-up culture open to strangers (about 80% of Start-Up Chile companies are from another country)
- Very few administrative burdens to start or shut-down a business
- Plenty of public subsidies and support programs for early stage start-ups (over 50 government programs)
- Incentive Tax Law to invest in R&D (35% of the investment financed through tax credit)
- Most stable country to do business in the region (Ranks 13th worldwide in The Economist’s Business Environment Index)
- Steady economic growth (5.38% averaged growth over the last 17 years)
- Increasing economic integration with the two largest Spanish-speaking tech market: Mexico and Colombia
CONS
- Small market
- Market dominated by big companies that have a tendency to increase the volume of sales in existing activities instead of investing in innovative businesses
- Success stories are mostly copycats
- Low level of private investment in R&D (0.35% in 2012)
- Difficulty to find local investors, especially VCs
- Developers are missing
- Santiago is becoming quite expensive
TOP STARTUPS IN CHILE
Mobile app that allows users to book the closest cab to their current position. It’s one of Start-Up Chile’s first success story.
Real Estate search engine bought in last april for USD 40 millions by the Argentinian giant Mercado Libre, so far the highest acquisition amount ever in Chile.
Rising star of the financial service comparison solutions, it has raised USD 19 millions since its beginnings.
Innovative Real Estate platform that sends real-time alerts about properties in an area delimited on a map.
TOP PEOPLE TO KNOW IN CHILE
Marcelo Díaz Bowen
CEO
Invesur Capital
Investor, former CEO of IncubaUC, Latin America’s best incubator. He’s the connection point between the tech markets of Chile and Palestine.
Sebastián Vidal
Executive Officer
Start-Up Chile
Sebastián has worked in Start-Up Chile since its very beginning. As such, he has mentored thousands of start-ups.
Leo Prieto
Founder
FayerWayer
Serial entrepreneur well known for founding FayerWayer, the most important tech blog in spanish language in the world.
Tadashi Takaoka
CEO
Magical Start-Up
Entrepreneur and manager of Magical Start-Up, a recognized private accelerators in Chile.
Claude Puech
Executive Manager
Inria Chile
French computer science professor in charge of managing Inria Chile, a French-Chilean center for technological transfer.
Felipe Heusser
Founder
Ciudadano Inteligente
Social entrepreneur, known for founding Ciudadano Inteligente, which promotes transparency and citizen participation through online means.
CHILE
| GDP (in billions USD): | 277 |
| GDP per capita (in USD): | 19,414 |
| Population: | 17,620,000 |
| Population in 2050 (est.): | 20,839,000 |
| Internet Penetration: | 66.5 % |
| Mobile Penetration: | 142 % |
| Banking Penetration: | 42.2 % |
| Credit Card Penetration: | 22.8 % |