LatinFinance - November/December 2016 - 19

VENTURE
CAPITAL
CHILE

An incubator for entrepreneurial ventures is part of a Chilean
government drive to make it easier to do business. Already it's finding
success. By Charles Newbery

Fueling growth
hen Clemens Raemy was
backpacking through South America, a few
sketchy cab rides gave him an idea. He got
to work on what is now SaferTaxi, a mobile
app for booking, paying for and tracking
rides in real time with licensed taxi drivers.
Raemy and a Harvard Business School
classmate set out to raise capital to launch
the company, but no venture capital funds
would back them. So they looked at business accelerator programs and found, to
their surprise, a new one called Start-Up
Chile.
In 2011, Raemy returned to the region he
had come to love during a six-month backpacking trip two years prior. But this time,
he rubbed shoulders in Start-Up Chile's airy
office with other entrepreneurs, several
of them locals with what he also sought:
insight on Latin America, the first target
market for SaferTaxi.
Start-Up Chile handed them $40,000 in
an equity-free grant, and, with the money,
the partners built and launched the service
in Chile. A month later, they returned to the
same venture capitalists from before and
snared their first $1 million to expand to
Argentina and Brazil. "We could show them
that we had a big success case in Chile,"
Raemy says.
SaferTaxi has gone on to raise $11.5 million to roll out the service, most recently
in Mexico. It is now generating enough
revenue to fund expansion, helped by the
proceeds of a recent sale of operations in
Argentina, where regulations have made it
hard to do business, including for competitors like Uber.

Source: Reuters

DEVELOPING TALENT: Participants in the Start-Up Chile program, designed to foster entrepreneurial initiatives and attract larger investors, work in its Santiago headquarters

The company is a success story for Raemy, 33, from Switzerland, and his founding
partner, Jonathan Lo, from Hong Kong. But
Raemy's experience also shows how StartUp Chile is encouraging entrepreneurship
in a country long known for mostly copper,
salmon and wine.
Building an ecosystem
Nicolás Shea came up with the idea for
Start-Up Chile after getting an MBA from
Stanford University. He wanted to build a
community of entrepreneurs in Santiago,
much like what he saw in the US. He got the
government to fund the program and provide visas to foreigners, bringing in talent
to share their experiences and knowledge
with the hope of inspiring Chileans to start
their own ventures. Shea enlisted Stanford
classmate Cristóbal Undurraga, who returned to his native Chile from a startup in
Silicon Valley, to put the idea in motion.

Start-Up Chile has grown fast. Some
1,500 companies from 40 countries have
taken part since it began in 2010. It is the
fourth-largest accelerator in the world
with $7 million in capital investments in
2015, according to the Global Accelerator
Report 2015. It is also the world's biggest
government-owned accelerator, trailing
three private funds, led by US-based 500
Startups at $18.8 million. By the number of
startups accelerated, Start-Up Chile comes
in third with 250.
The exchange between local and foreign
entrepreneurs has created "a more robust
critical mass of entrepreneurs," says Undurraga, who now works as the growth manager at Ekonométrica, an asset management
firm.
When Chilean entrepreneurs travel to
Silicon Valley, they no longer look out of
place, he says. "Five years ago, the words
Chile and startups were never used in the
November/December 2016 - L ATINFINA NCE.COM 19

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