The report, which considers the period 2010-2019, shows how the local VC industry has been maturing and acquiring an increasingly relevant role in the development of Chilean startups.
To systematize the industry data, the Chilean Venture Capital Association (ACVC) made its first report on the activity of investment funds, startups, and associated companies.
The work analyzed 90 startups, 18 investment funds, and 243 deals, between 2010 and 2019. One of the main conclusions obtained was that although until 2017 there was no clear trend towards an increase in Venture Capital (VC) deals, they began to grow explosively after that.
Between 2017 and 2018, 29 transactions closed, while only one year later, between 2018 and 2019, the total of deals was 59. The average of transactions for the 2016-2019 period showed a growth of 82.7%.
“The panorama is changing notoriously. It is not just a few companies that achieve success and internationalization. It has been also possible to develop a true investment ecosystem that promotes the sustained growth of this type of companies,” says Francisco Guzmán, president of the ACVC. Cornershop and The NotCo are the most prominent examples, but no the only ones. Several startups less mentioned contribute to the technological development of Chile and the world as well, he adds.
One explanation for this phenomenon is the creation, during the period considered, of new Venture Capital funds supported by the newly established Corfo lines. That made it possible to accelerate the financing of young companies and laid the foundations for the growth of the VC industry.
The analysis also revealed a significant difference in the amounts of the financing tickets. 90% was under $ 500,000, while only the remaining 10% was above this amount. Of this last percentage, only 1% was over 5 million dollars.
That difference is explained by the unmatured development of the ecosystem, but this tendency should change in the future. The natural ticket’s evolution is an inverse distribution, where 90% of the total invested should go to tickets for over a million dollars and only 10% to early-stage deals.
Regarding the type of startups, e-commerce startups received the most VC financing (35% of the total). Meanwhile, companies in the scientific-technological area have begun to gain strength. Only the Healthtech / Biotech and Agtech / Foodtech industries accounted for almost 25% of the investment.
Regarding sales, even though fintech companies ranked fifth in investments, in 2019 their sales at the local level exceeded more than 12 times what was invested in them that same year. That difference can be explained by the increasing number of companies, the investment growth between 2018 and 2019, and the sales abroad that reached 65% of their total turnover.
Meanwhile, the sales of the startups studied correspond to almost double the aggregate investment (with a ratio of 1.87 times) their global sales have had a considerable increase, reaching almost double that of the turnover in 2019 local with 570 million dollars.
Download the report here Primer-Estudio-de-la-Evolución-del-Venture-Capital-en-Chile.pdf (456 downloads)