Within the context of Latin America, Chile actually has a pretty successful economy, ranking fifth in terms of size in all of Latin America and among the highest per capita too.
The country’s economic health is largely due to the government’s very intentional economic management, open-market policies and private-sector-led economic model.
However, having said that, Chile has experienced a period of economic downturn in the last decade or so, contributing to relative instability and uncertainty across the board. Indeed, in addition to social issues that lead to economic instability, there are a few other challenges that the country is facing, especially with regard to providing a conducive environment for startups and hopefully unicorns too.
What is the State of the Chilean Economy?
Chile’s economy is in a fairly good state relative to the rest of Latin America, and while circumstances are constantly changing, the country normally ranks between 40 and 50th in the world in terms of GDP.
Here are some of the most important factors contributing to the state of Chile’s economy.
Supportive Government Initiatives
The Chilean government has made a concerted effort to implement initiatives to support businesses and startups.
One such initiative is the country’s flagship programme, Startup Chile, which focuses on attracting innovative entrepreneurs and providing accelerator programmes.
Another big one is CORFO Grants, Chile’s Economic Development Agency, which offers companies seed capital, grants and other resources that can help businesses at various different stages of their journies (especially businesses focused on innovation and tech).
Great Talent Pool
Chile is home to a talent pool that is constantly growing, boasting an increasing number of skilled professionals in engineering and tech. Indeed, the country’s educational system produces highly skilled graduates which makes it fairly easy and affordable to hire engineers, developers and other specialists too.
Contributing to this is universities’ emphasis on innovation and partnerships with international institutions.
Access to Funding and VC
Chile may not be the top location in the world for attracting investment and venture capital, but it’s definitely getting better. Indeed, over recent years, the country has seen an increase in availability in venture capital as a result of both local and international investors.
Strategic Location
Chile’s location makes it a useful and unique gateway to the rest of Latin America. With trade agreements and a strong legal framework for foreign investment, startups that are based in Chile are able to expand more easily into other surrounding Latin American markets.
Strong Legal Protections
Chile may not have the largest or strongest economy in the world, but it ranks high in terms of ease of doing business in Latin America. With a solid legal framework for things like intellectual property and contracts, Chile is a solid location choice for tech startups and innovators in other sectors.
Unicorns in Chile
Chile is currently home to two companies that are unicorns – that is, valued at $1 billion (or more) and still privately owned.
NotCo.: $1.5 Billion
NotCo. is the operator of a food technology company that uses AI algorithms to produce dairy alternatives and plant-based meat.
To replicate animal-based products, the company uses ingredients like coconut, pineapple, peas, cabbage, bamboo, beetroot, chickpeas and seeds. With these things, it’s able to mimic everything from taste and texture to colour and aroma.
Founded in 2015, NotCo. is based in Santiago and with 400 employees and 32 investors, the company was most recently valued at $1.5 billion.
Betterfly: $1 Billion
Founded in 2018 by Eduardo Della Maggiora and Cristóbal Della Maggiora, current CEO and President respectively, Betterfly is the developer of a benefits and well-being platform that helps people transform healthy habits into social donations.
Essentially, the company rewards people with good lifestyle habits with things like growing life insurance coverage, and converting healthy activities into company-sponsored charitable donations.
With just under 500 employees and 24 different investors, Betterfly was most recently valued at $1 billion.
