VENTURE CAPITAL

A scaling sector

Chile’s venture capital industry has trebled in the past decade, reaching over US$1.300 million, and has financed more than 280 companies. Chile serves as an excellent laboratory for companies to test their business model before expanding to other countries in the region.

Chile’s attributes

Platform. Chile is an excellent gateway to Latin America, standing out for its model of openness to global markets and its broad network of double taxation treaties. This is borne out by the over 1,000 exporters of global services that have chosen Chile as a business platform.

Chile led the region in the Digital Readiness Index 2019 and is the country best prepared for the development of a digital economy, which is conducive to its aim of consolidating its position as a financial and global business hub.

Outlook. Chile’s investment fund industry has a dynamic outlook. In 2019, it comprised 462 funds, up by 20% on the previous year. Out of these, 66% focus on alternative assets (ACAFI 2019).

Chile leads the region on its environment for private equity and venture capital (LAVCA Scorecard 2018), with strengths that include its legal and regulatory framework, protection of intellectual property and transparency.

The country also stands as an example of digitization and financial inclusion: 97% of the adult population has access to some financial product (CMF 2019) and there are 84 Internet users per 100 inhabitants, out of whom 85% are mobile users (SUBTEL 2019).

The industry’s growth has been boosted by the Funds Law (LUF 2014) and the 2016 Productivity Law, under which alterative assets can account for up to 15% of the assets under management of pension funds, which total some US$200,000 million.

Entrepreneurship ecosystem and talent.  Chile’s entrepreneurship environment sets trends. Public support began in 2001 with nine start-ups; by 2019, there were over 2,000. Today, the country has over ten networks of mentors, 15 incubation programs and 25 co-working spaces around the country (CORFO 2019). Key initiatives include Start-Up Chile, a world-class state incubator (Forbes 2018).

The country has a workforce imbued with a culture of entrepreneurship and innovation, representing a pool of talent not only for the development of innovative companies but also for the installation of overseas companies, the recruitment of country managers, proffessionals for company builders or regional scouting.