Alan Colmenares is the Facilitator for the Founder Institute program in Colombia, South America, a contributor to VentureBeat and writes about Latin American start-ups at TropicalGringo.
When I worked for Intel Capital, Intel’s corporate venture capital (VC) arm, in Mexico and a bit in Brazil ten years back, the big issue in Latin America was finding enough deals from which to select investment opportunities. Today, that is less of an issue in a country such as Brazil that has an incredibly vibrant start-up environment, but it’s still a concern in my current home country, Colombia.
Latin America’s been my home for the last 15 years, and I’ve frequently heard people talking about creating something like Silicon Valley here. But I think it makes more sense for Latin America to tap directly into the Valley’s expertise, culture and established networks. That’s a major reason I decided to become the facilitator for the new Bogota, Colombia chapter of startup incubator Founder Institute.
The Founder Institute currently operates in 16 cities worldwide, including Silicon Valley, San Francisco, Los Angeles, Seattle, San Diego, Denver, Houston, Boston,Washington DC, New York, Paris, Berlin, Brussels, Bogota, Santiago, and Singapore and has helped to launch over 230 companies with a stated goal of launching 1000 “meaningful and enduring” technology companies per year.
During the last two years, I’ve met and spoken with talented and impressive founders in the region. Some of these are focusing their efforts on the underserved regional market while others are tackling global opportunities. Notable successes focused on the regional market include comparison shopping site Buscapé, with a recent $342 million investment led by Naspers, and ecommerce company Mercado Libre, worth around $3B and listed on the NASDAQ.
Colombia’s new president, Juan Manuel Santos, announced plans to invest more than $2B in information and communications technologies and has allocated $30M for investment funds focused on technology companies. Yet, thus far, compared to Brazil, only a small number of Colombian web or technology start-ups have received VC or angel investment (one indicator of excellent growth prospects).
There are some bright spots in Colombia’s tech startup scene, though. The country has a strong entrepreneurial culture and some relative successes such as an Internet real estate company called VivaReal, which competes throughout Latin America and has closed two rounds of angel funding from Silicon Valley as well as local online payments company, Pagosonline, which was recently acquired by the aforementioned Buscapé. Additionally, a company called Koombea serves as the main development shop for a number of Silicon Valley start-ups.
Unfortunately, the founders and co-founders of these companies had to build their networks (sometimes tapping into the valley) from afar and on their own. From my experience as a mentor for Endeavor, a non-profit that supports companies in emerging markets, I’ve seen first-hand the value that mentorship and connection to high value networks can provide within a region such as Latin America.
As Fred Wilson, partner at Union Square Ventures, posted in his company’s blog a week ago, “We believe the irresistible economics of Internet networks will ultimately transform the entire global economy.” If that is true, then countries such as Colombia need to look for ways to accelerate their start-up support ecosystem and incubator programs such as those offered by the likes of the Founder Institute can only help.
For those wising to apply to the Founder Institute’s 12-week program in any of the cities where they operate, you can apply here.