Feeding startup innovation

Many South American countries have thriving startup ecosystems

Venture investment in Latin America has more than doubled in dollars every year from 2016, reaching US$1.08bn through partial and final fund closes in 2019. Brazil takes the lion’s share of venture capital deals, accounting for just over half of the amount invested, but 2019 was also a record year for seed or incubator transactions in Argentina, Colombia, and Mexico 41

While this steady growth trajectory will likely be disrupted by coronavirus, some industry sources suggest the situation is not all doom and gloom An August 2020 survey by LAVCA found that 58% of startups surveyed said the crisis has had a neutral (25%), good (26%), and even very good (7%) impact on their existing business while 49% said it had a good impact on new business opportunities 42

Accelerator programs such as Startup Farm in Brazil and Startup Chile are aiming to create South American Silicon Valleys and government efforts to stimulate investment and encourage innovation are taking shape Brazil’s Legal Framework for Startups was sent to Congress for approval in October 2020 and is seen as a positive development for the sector, although it has been criticised for not addressing tax or labour issues Executive director of the Brazilian Association of Startups (ABStartups), José Muritiba, told Latin American Business Stories that:

“It is a great step forward for the entrepreneurial ecosystem, as it better defines some important points for the sector and brings recognition to the relationship between startups and the governmen.” 43

Some notable food industry start-ups include the food delivery unicorns, Colombian Rappi and Brazilian iFood, while in the plant-based space, Chile’s NotCo and Brazil’s Fazenda Futuro stand out from the crowd. NotCo recently closed a $30 million finance round with investment from the Jeff Bezos-owned Bezos Expeditions (among other investors) In the agri-food space, Colombia’s Frubana has developed a B2B e-commerce platform that allows producers to sell directly to retailers, restaurants, and other large consumers It recently raised $10 million in a seed round