Start-Up Chile, the number one accelerator in Latin America and fourth in the world is reporting positive results. After the program’s launch 6 years ago, 40 million USD has been invested by the Chilean Government (CORFO) into 1,309 startups. Most notably, 76% of entrepreneurs that have entered the program are foreign and 24% are Chilean.
The Chilean accelerator conducted a survey to measure the impact of the program. The main focus was to better understand how the program aids the development of new global businesses. The data showed that the portfolio of startups was worth at least 1,350 million USD. Only 21% of the data-set were interviewed and reported having a formal valuation which amounted to this figure. Therefore the actual amount is expected to be much larger. The accumulated valuation is 34 times larger than the amount invested in the program by CORFO (39.7 million USD).
Start-Up Chile has a proven high survival rate in comparison to other startup hubs. 51.1% of startups that have participated are still active today, whereas in Silicon Valley this percentage is no more than 10%. There are limited studies measuring industry specific survival rates, however Start-Up Chile consistently proves to be on par with other prominent accelerators.
Of the 51.1% of surviving startups, 55.4% of them are Chilean. It could be argued that cultural proximity is a reason for their success. Chilean startups tend to have broader networks, better connections and more opportunities to access public follow-on funds to avoid death valley. Of the participants that decide to remain in Chile, those that are most represented hail from Argentina, the United States, Colombia and India.
The initial objective of the program was to position the country as the most important innovation hub in Latin America. To lead the way by attracting international entrepreneurs and transform local entrepreneurial culture to become more global. Over the years, Start-Up Chile retained 32% of its startups, meaning that after participation in the program they remained in-country to run their operations.
Sales results measured by the survey found that to date companies reported having sold more than 276 million USD, 143 million of which were produced in the last year. In-country sales reached a total of 42.6 million USD, 26 million of which were generated in the year prior. The latter figure represents nearly three times the annual investment into the program by CORFO.
Generations ‘G0 – G6’ which were supported by Start-Up Chile during the first three years of the program reported sales revenue to be 3 to 4 times higher than more recent generations, G7 – G15 which spanned from mid 2013 – February 2016. Executive Director Rocio Fonseca explained that the results ‘show that the dynamic companies need a maturation period, after that they grow in shorter periods of time’
During the development of a new business, it is crucial to have access to a pool of capital in which to raise funds. In Chile, Start-Up Chile startups have collectively raised 30.5 million USD, 29% of which came from public funds and 71% from private capital. The total amount is 3.5 times the investment made by CORFO into the program.
Globally, the money raised by startups was 421 million USD, 10 times the investment of CORFO into the program. Similar to the reported sales findings, G0 to G6 comprising of startups supported during the first 3 years raised an average of two to three times more than recent generations G7 to G15.
Job creation was also measured in the survey. 599 startups which make up 46% of the total portfolio declared to have generated jobs. They created a total of 5,162 positions worldwide, 30% of which were in Chile. Average salaries ranged between $1,216 to $2,280 USD monthly, approximately 800,000 to 1,500,000 Chilean pesos.
The results of the survey demonstrate the mark of quality for the startups and the program they progress through. Fonseca explains, ‘Every year there are more startups that want to come to Chile because our program validates them in other programs, in other markets, with investors and opens doors in Latin America’ .