Startup in LATAM ③ : Startup Chile, a government-led program that supports startups from Chile, both locally and internationally
In my last blog, I wrote about Argentina's startups.
From Argentina, Buenos Aires, I flew to Santiago, the capital of Chile.
I want to introduce Chile and its unique startup support program here.
Summary of this article
The main points of this article can be roughly summarized in three parts.
Chile has been chosen as an export base
Despite the massive riots in 2019, the country actually has a history of relative stability in Latin America. Rather, that has been its strength, and it has signed free trade agreements (FTA) and economic partnership agreements (EPA) with 64 countries and regions and is often chosen as an export hub in South America.
Besides, the legal rules are relatively well-developed, making it easy for foreign companies to enter the country. When a Japanese company comes here, it takes two months to set up a corporation. (In other countries, it takes a little longer time.)
With that background, Facebook is testing and marketing its products in Chile, including emojis.
Startup Chile supports startups from Chile, both locally and internationally
Startup Chile is an acceleration program run by the Chilean government, which will issue a visa and a bank account in 10 days for those who participate in the program as a startup company after passing the screening. The program is run by a government-led agency called CORFO(Corporación de Fomento de la Producción de Chile). That's why it is prepared through a unique process.
When I visited Santiago, Chile, I visited a facility run by Startup Chile. The text above was printed on the wall, which shows that the government is serious about creating a program to generate global startups from Chile.
This may be one of the reasons why they have received applications from not only Latin America but also from Asia, the other side of the world.
I met an accelerated entrepreneur from South Korea who is going through the program and receiving acceleration.
Benefits of joining Startup Chile
Acceleration programs provide training, interaction with participants and alumni (community), and mentoring. The most apparent benefit is EQUITY-FREE FUNDING. This means that you can receive money without dilution.
In addition, the aforementioned speedy visas and bank accounts are one of the major advantages for businesses targeting Latin America. Especially if you are producing and exporting in Latin America, you can take advantage of Chile's strengths in free trade agreements (FTA) and economic partnership agreements (EPA) with many countries to lower your tariff costs.
Aside note: I've seen MINISO in many parts of the world
The above is a billboard I found when I was in Chile. I saw this advertisement with the words "TO CHILE" changed to countries' names in the world. It includes Asia, Eastern Europe, Latin America.
As a Japanese, I felt odd by the words "FROM JAPAN" because MINISO is not a company from Japan. It's a Chinese company. However, it is expanding its stores around the world while using the Japanese image of "high quality".
MINISO was listed on the New York Stock Exchange on October 15, 2020, bringing its market capitalization to over ＄6 billion. The company's total distribution is about ＄3 billion, and its total number of stores around the world exceeds 4,000.
The company's franchise system has supported this rapid growth. MINISO does not need to have the equipment cost of store and collects a portion of the sales in exchange for the rights to use the MINISO brand.
The company was able to minimize the impact of the Corona disaster because of its business model.
At the time of writing, the company was looking for franchise owners, mainly in Africa, and its policy of global expansion is unlikely to change even as the COVID-19 situation continues.
The area in green in the figure is the area where the franchise is being offered.
I'm going to touch on Colombia, which produced Rappi, and Mexico, which expected to surpass Japan's GDP in 2050.
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What did you think of Chile and its unique startup support program?
What would like to know about LATAM startups?
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