What do Venture Capital invest in and what kind of companies in Latin American are they looking for?
The figures that move the venture capital market oriented to start-up financing are promising for the world of proptech in Latinamerica, agreed prominent industry players who analyzed the issue in Chile recently, on the first edition of the PropTech Latam Summit. However, there is still much to be done.
"Venture capital has been growing in Latin America and there is a great tendency of large corporations to invest in startups because they add value to their line and can offer better things to their customers and also to their internal technology", said the panel David Alvo, president of Latam Ventures Club.
In the same line, Eduardo Román, Director of Research at LAVCA, assured that "2017 was a stellar year for the industry at the regional level". In terms of numbers, he said that last year "The amount invested in Venture Capital in Latin America doubled in relation to 2016.
There were a total of 429 transactions that were made for an amount of 1140 million dollars, which is quite compared with the 500 million dollars that had been invested through 197 transactions in 2016, "Román detailed with concrete data generated by the entity he represents, the Latin American Venture Capital Association based in the USA.
In this area of VC, Brazil is the most mature market, followed by Mexico and in third place Chile. In the latter case, Claudio Barahona, Country Manager Telefónica Open Future and WAYRA related the experience of this company: "We have 100 startups working with Telefónica today, leveraging our business. With this we bring efficiency and savings, but we also give a new value proposition to our corporate and mass clients. Today we are on a crusade to join more large companies to invest in ventures, in startups ".
But the world of proptech is still a segment not yet sufficiently exploited. In fact, Wayra has invested only in 2 proptech: Ipsum (a management platform for construction) and Happy Community (a real estate management software that also works like Fintech).
To exemplify it in a more practical way, Barahona himself made an exercise with the summit assistants and asked the representatives of the real estate and construction companies present if they had invested in startups. The answer? Only two had done so, which reveals that the commitment to entrepreneurs remains timid.
TIPS FOR STARTUPS
In this context, one of the potential investors is Manutara VC. In fact, the partner of this company, Pablo Traub, explained that the focus of this firm is "investing in startups that have the potential to compete globally. We pay great attention to startups that are working with current technological trends and hopefully they can connect with successful markets in many markets more developed than ours."
In his presentation, we contacted other funds, especially in the United States where I Traub gave a tip to entrepreneurs who are looking for financing. "When I learned about this topic, I asked them the same question: how do you define or identify where you are going to invest? And all the large funds with which I spoke told me that the order is as follows: First is market, then entrepreneur, and third, probably, strategic alliances. And it's logical, because you can have the best team in the world, but if you're in the wrong market you're not going to get anywhere. "
CO-WORKING IN LATAM
The co-working market was also present in this panel with Florencia Clavijo's exhibition of Sinergia Incubadora, a company that controls 90 percent of that market in Uruguay and is betting on expansion in the region with a model that includes a incubator. "In Uruguay, there are no big local Ventures Capital, no big players. We are from Sinergia building an angel investor network, but we are training the risk investor because in Uruguay the investor still invests in an apartment for rent or in very conservative areas basically, "he explained.
In turn, Ary Krivopisk, Head of Real Estate at WeWork Latam, the world's largest coworking platform, announced that in 2018 two new buildings in Santiago, with a mind always on in connecting entrepreneurs. "One of the things that we focus on We-Work is to create that ecosystem and that space for these companies to meet, meet, collaborate and empower each other," said Krivopisk on the philosophy of this company that is already in 30 countries and has about 260 thousand members.