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10 Latin America Hubs To Launch Your Startup

When considering a place to launch a startup, immediately Silicon Valley comes to mind. But with the market saturation and incredibly high cost-of-living, San Francisco is not an option for all companies. While Boulder, Austin, and Chicago are becoming burgeoning startup hubs, there are a few cities further south that should be put on the short-list of places to launch. The following Latin American cities are becoming big startup hubs for a wide variety of industries. Here are 10 cities that you should consider when finding a place to launch.

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10. Lima (Peru)

The Economist recently reported on Peru’s exception growth rate of 7% a year over the past 9 years. This is the second fastest of all Latin American countries, behind Panama. However, the government is not resting on its laurels, especially when it comes to the tech startup ecosystem. Startup Peru, created by the Peruvian State’s Production Ministry, promotes innovative startups in building successful businesses. It has also witnessed very interesting changes with the launch of Wayra’s local academy in Lima. Wayra’s impact goes well beyond the few Peruvian teams it is accelerating. According to the Peru-based American entrepreneur Kate Mulder, it also helped a lot of people make their way out of the woodwork – not only the thousands of entrepreneurs who have applied, but also mentors and investors. Other interesting initiatives that have emerged over the last few years include the entrepreneurship community Lima Valley and the networking event Lima Tech Meetup.

9. Recife (Brazil)

Recife has long established itself as a talent pool for the global tech industry, due to its universities’ world-class computer science departments. Over the last decade, the city has also been working on ways to retain this talent and stop the brain drain, while attracting foreign professionals. The key to accomplish this goal is called C.E.S.A.R, which is the Brazilian acronym for “Recife Center for Advanced Studies and Systems”. Created 20 years ago by university professors, it has turned into one of Brazil’s most innovative tech institutions. C.E.S.A.R has also led Recife to larger initiative, the tech cluster Porto Digital, which hosts more than 200 companies, generates 10 percent of the state’s GDP and has been churning out successful businesses since 2000 from a downtown location that breathed new life into a decommissioned port.

8. Monterrey (Mexico)

Despite the wave of violence that has badly hit the city over the last couple of years, Monterrey fully deserves its place on this list. The tech scene’s movers and shakers are determined to fight against negative forces. As a matter of fact, Monterrey has valuable assets when it comes to building a strong tech ecosystem, starting with talent. It’s headquarters to the respected ITESM university, also known as Monterrey Tech. ITESM is only one of Monterrey’s educational institutions, which also include CEDIM, the design and innovation university. This tech ecosystem can obviously be leveraged to create startups; unsurprisingly, it has already given birth to young companies such as the website builder Sidengo and the food ordering platform Atumesa. In addition, it also boasts a high-profile VC fund, Alta Ventures.

7. Medellin (Colombia)

Tucked in the Aburra Valley of the Andes Mountains of Colombia, Medellin is becoming one of Latin America's hottest new places for start-ups. At the center of the growth is the government-sponsored organization Ruta N, which is an innovation and business center for new companies. Among other things, the corporation offers young companies support in key areas of business including finance, recruitment and public relations. But besides its strong public sector involvement, Medellin also has a lot to offer new businesses because of its location. It runs on a similar time zone to the east coast of the US, which has its own benefits in terms of ease of communication and, much like San Francisco, it boasts a mild climate. Colombia’s second largest city, but relatively small in size, Medellin was named 2013’s Innovative City of the Year by the Wall Street Journal magazine and Citibank.

6. Santa Rita do Sapucai (Brazil)

Santa Rita do Sapucai undoubtedly has one of the most underrated tech scenes in Brazil. While it may not compare with Sao Paulo’s or Santiago’s hub, the small town of just 40 000 residents is home to 160 companies related directly to technology, from startups to factories. Also known as the Electronics Valley, the local tech scene is an interconnected network, where entrepreneurs know each other, share ideas with mentors and meet up on a regular basis at networking events. In addition, the city is home to the most innovative tech university in Latin America, INATEL. The institution supports its own startup projects and is also a unique platform for innovative business executives, such as the current CEO for AirBnB Brazil and many Facebook, Google and Qualcomm key-players in the country. All of these factors, plus a lower cost of living, as well as the possibility of spending less time waging war with traffic for hours each day, are great reasons to launch your startup there.

5. Mexico City (Mexico)

While Monterrey is an interesting hub, there’s no doubt that Mexico City is a much larger one, thanks to its huge metropolitan population of over 21 million. This is obviously a very attractive market for local B2C and B2B startups. As a matter of fact, the country and its capital are increasingly attracting attention from US startups. Over the last couple of years, the city has also consolidated its ecosystem, with the opening of co-working spaces such as El 3er Espacio and the launch networking events such as Lean Startup DF, promoted by the new early stage fund Investomex. The city also plays host dev meetups such as the local version of SuperHappyDevHouse, brought to Mexico by the same key people behind Silicon Valley’s first seed fund and accelerator for Mexico, Mexican.VC.

4. Buenos Aires (Argentina)

Buenos Aires is one of the most cosmopolitan cities in Latin America and subsequently the region’s most dynamic startup hotspot. The city has a strong pool of tech workers that is gaining the attention of major companies around the globe. Many startups are either going to Buenos Aires in order to start subsidiaries and open up operations or outsourcing their tech teams to Argentina. There's a high quality of tech talent there at a very low cost. In addition, the locally well-known seed fund and accelerator NXTP Labs provides upcoming startups with a seed investment and local government has announced an initiative to support local startup accelerators. The city is also home to Mercadolibre, one of Latin America's most successful tech companies. The e-commerce outfit is now traded on the Nasdaq, and its founder Hernan Kazah launched Kaszek Ventures, which is the biggest fund in Argentina.

3. Belo Horizonte (Brazil)

Belo Horizonte is one of Brazil’s and Latin America’s most interesting tech hubs, which earned it the nickname of San Pedro Valley. Not only is it home to Google’s R&D center for Latin America, but it also gave birth to a flurry of successful startups, such as Sympla, HotMart, Rock Content and Méliuz – not to mention Samba Tech, which is one of the most innovative companies in the world. In addition, SEED, a very effective startup acceleration program, has been running in town for two years in order to boost the local startup scene. It aims to strengthen the local entrepreneurial culture, accelerate ecosystem development and foster innovation close to home. Belo Horizonte also boasts a world-class VC fund, FIR Capital, and is home to a technological park called BHTec, which holds several tech companies.

2. Santiago (Chile)

Santiago is mostly known for accelerator program Startup Chile, but there is much more to the city than the government grant. The ease of doing business can truly be seen in Santiago, where it takes an average of 5.5 days to register a business (compared to the 30.1 days average for the rest of South America). The city’s big pull can also be attributed to the strong, stable economy and low amount of bureaucracy. It should also be a key place for female founders to look, since women make up 20% of the startup workforce. Many Latin American headquarters are located in Santiago, so if your startup needs to get in touch with big businesses, this is a place to be. The city is efficient, so startups find they can work quickly in Santiago instead of going through frustrating red tape.

1. Sao Paulo (Brazil)

The GDP of the state of São Paulo is bigger than Argentina’s, Chile’s, Uruguay’s, Bolivia’s and Paraguay’s combined, despite the fact that it is less than 5% the size of those countries. In this context, São Paulo is arguably the place to be for startups keen to tap its huge local market or use it as a base to target Brazil in its entirety, while partnering with the vast number of local and foreign companies which have offices in this huge city. It's also the best location to raise money from its many investors and banks, as well as from foreign VC funds, which tend to choose the city as their point of entry into Latin America. In addition, the city also hosts a vast number of networking events and hackathons, as well as several co-working spaces. As a result, São Paulo has one of the busiest startup ecosystems of Latin America, and there are way too many promising startups to name them all.

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