South America Rising
A recap of Draper Venture Network’s 2019 General Partner Spring Forum in Chile, Argentina, and Brazil
Latin America is ripe with innovation, and the rest of the world wants a piece of the action. Some of the big signals in the recent news are: SoftBank’s launch of a $5 billion fund to invest in Latin America. PayPal invested $750 million into MercadoLibre, the region’s largest e-commerce marketplace and financial services player. And Walmart acquired Cornershop, a Mexico and Chile-based grocery delivery service, for $225M.
Last month, Draper Venture Network (DVN) and 30+ of our member funds’ general partners (GPs) traveled to South America to get a feel for the region’s emerging wave of entrepreneurship and innovation. During our 2019 DVN GP Spring Forum, we visited and met with the many players in the technology ecosystems in Santiago (Chile), Buenos Aires (Argentina) and São Paulo (Brazil). The multi-country trip was made possible thanks to our local member fund hosts: Manutara Ventures (Chile), Draper Cygnus (Argentina), and ACE (Brazil). These Funds differ in size and stage of investment, but all provided a rich view of their ecosystem and enabled impressive access to their government and industry leaders.
Chile
Our first stop was Santiago, Chile, home of DVN Member fund, Manutara Ventures. Our group was impressed to learn about the country’s entrepreneurial and startup-friendly ecosystem. In particular, the key role that the Chilean Government has been playing in creating the right conditions for entrepreneurship to thrive. One initiative of the Chilean government was creating Fundación Chile, a government-sponsored business program — a successor to the highly successful Startup Chile. Fundación Chile is widely credited with turning Chile (a country with no native salmon population) into the world’s second largest salmon producer through creating business ventures and enabling local entrepreneurs to easily do business.
We met with President Sebastián Piñera who emphasized that Chile, with a reasonably small population of 18 million people and a geographic disadvantage of being at the southern part of the world, understands it must be a global player in the world’s economy and attract talented entrepreneurs in order to progress. As such, they are focused on creating many entrepreneurial-friendly initiatives.
Argentina
We then flew across the Andes Mountains to Buenos Aires, Argentina — home of passionate, resilient entrepreneurs and DVN member fund, Draper Cygnus. Draper Cygnus hosted us for a VC Summit attended by numerous local VCs and private DVN-only GP meeting. During the private GP meeting, member funds shared latest investments, innovation trends, best practices, as well as to strengthen the ties amongst Draper Network funds.
We spent time with the team at Mercado Libre (NASDAQ: MELI) Latin America’s largest e-commerce marketplace and financial services player. CFO Pedro Arnt, gave us an inside look into the Argentine unicorn, a beacon of what’s possible for LATAM. Mercado Libre is traded on the NASDAQ with a market cap of $23.22 billion. Arnt delved into the founding story of Mercado Libre before the 2001 market bubble. From day one they were hell-bent on covering the entire region, rather than focusing purely on Argentina. They recognized that being in Brazil (the biggest economy in the region) was key to success and aggressively pursued this strategy. The 2001 market crash brought many constraints, which ultimately helped them focus on operational excellence and led them to build a more dynamic company that is today rightfully considered the “Amazon of Latin America.”
We also visited Globant, another publicly-listed company started around the same time as Mercado Libre, who have also focused on being global from day-one. They serve some of the largest global corporations with engineering, innovation and design needs. CTO Guibert Englebienne echoed the global theme as well as the need to be resilient to external shocks, especially since the Argentina economy has had such high volatility.
Both entrepreneurs pointed to the strong culture of entrepreneurship in Argentina business builders keep creating organizations thrive in spite of very real challenges, — like Mercado Libre and Globant.
You can watch a recap of our Argentina leg of the trip here.
Brazil
The final stop on our whirlwind South American tour was São Paulo, Brazil. Hosts ACE Ventures (DVN<>Beta member fund) showcased their impressive Corporate program, where they work with the largest Latin American Corporations to give them access to tools and technology solutions for improving their innovation programs. This Corporate program is now an online platform Myinnovation launched on April 1st, after trials with telecom, pharmaceutical, banking and retail companies in Brazil.
We visited CUBO Itaú — Brazil’s most prominent co-working space where Flavio Pripas, former Managing Director of CUBO, walked us through the reason for Cubo: Sao Paulo accounts for 30% of Brazilian high-growth businesses and ranks in the top 15 metropolitan areas for technology companies globally. As such, Cubo serves the important role of bringing together entrepreneurs, investors, large corporations and other players in the ecosystem into one physical hive of activity — 50,000 square feet, four floors of space, and over 2,000 visitors daily.
The trip wasn’t all work, of course. We enjoyed some of the great things that South America has to offer: like Chilean wine in the foothills of the Andes, Argentine tango dancing and polo playing, and a gorgeous Brazilian beach.
