Latin America's startup scene is heating up and Chile was the spark that ignited it all

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Trés Commas
Last week, Softbank announced the Softbank Innovation Fund, a $5 billion (yep, with a 'b') fund dedicated to investing in technology companies in Latin America -- the largest fund ever committed to making investments in the region.

Then on Tuesday, PayPal announced a $750 million investment in MercadoLibre, one of the largest e-commerce companies in Latin America.

That’s nearly $6 billion in just about as many days. Clearly there’s something going on down south -- let’s study abroad for a sec.

First things first, a quick geography lesson -- Latin America makes up the 20 countries under the US, from Mexico all the way down to the tip of South America, including the Caribbean.

The people living in Latin America make up about 10% of the world’s population, including 375 million internet users and 250 million smartphone users (that’s more than the US). Those internet and smartphone users are busy buying things online, as retail e-commerce nearly doubled between 2015 and 2018 (from $29.8 billion to $54 billion).

Now we’re starting to see why the money is pouring in, and when we say pouring, we mean it.

Venture investment in Latin America doubled(!) between 2016 and 2017 alone. 
 

Latin America’s startup ecosystem

As you might expect, the majority of startup funding in Latin America went to the largest markets -- Brazil took home the lion’s share, followed by Mexico. But when you take population into account, Chile was actually the hottest startup spot -- scoring over 11% of the investment with less than 4% of the group’s population.
Chile's secret ingredient? Chile was one of the first Latin American countries to invest public funds in startup infrastructure, launching their Start-Up Chile accelerator program in 2010. Today the accelerator’s portfolio of companies is valued at over $1.4B in total. 

Since Chile got the pelota rolling, startup accelerator programs have sprung up all over Latin America (Startup Peru, IncuBate, and RutaN to name a few) and investors are clearly taking notice. 

Crystal ball 
Increased investment in local tech innovators is going to slow the American tech quest for global domination, especially if Latin American countries adopt the protectionism policies we're starting to see in India.
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Yours truly,
Zac Cherin
Brendan Uyeshiro
Brendan Uyeshiro