Wayra Seeks New Wave of Latin Tech Startups

The Telefonica-owned accelerator is pushing hard to help Latin American entrepreneurs

At the football World Cup in Brazil, Latin America is once again showing its global leadership but in technology it has tended to be overpowered by the muscle of North America and Europe. Wayra, an accelerator largely focused on Latin America and with its roots in the Spanish telecoms giant Telefonica, is attempting to change that.

Today, technology business accelerators are fairly common: wherever there are startups there are organisations that will provide finance, mentoring and guidance to make great oaks from acorns. But Wayra’s challenge is perhaps as much cultural, since fear of failure in the region still looms large. The emergence of the US as global leader in IT led to a buccaneering spirit and a culture of acceptance that seeing your company fail is no cause for shame but rather a learning experience. Entrepreneurs who see their first company go down pick themselves up, dust themselves off and go again. Three-and-a-half years after launching its first ‘academy’ in Bogota, Colombia, Mariano Amartino, an Argentine entrepreneur and Latin America director for Wayra, is trying to instil something of that spirit in local startups.

“Recently I was giving a talk for almost 2,000 young people trying to become entrepreneurs and the interesting thing was that after this talk 80% of the questions were around ‘What do I have to do if I fail?’ And the answer I had is always to keep trying and to try to learn something from your mistakes.”

Now in Argentina, Chile, Brazil, Colombia, Peru, Venezuela and Mexico as well as Europe, Wayra has invested in 180 startups and Amatino thinks that, slowly, the fear factor might be diminishing.

“In Mexico, they’re more conservative. In Chile it’s not bad to fail. In Argentina,” he says, partly joking, “you are used to things failing every couple of years so you’re forced to be an entrepreneur. I can say that because I’m Argentine…”

Today, Amartino says the Wayra model hasn’t changed much but there have been tweaks. There is more focus on key areas such as Big Data and cloud computing, for example, and Wayra now tends to take convertible notes rather than equity in the companies it invests in.

“We’re learning along the way,” he says. “Switching from investing for equity changes all the dynamics of the way we invest. It brings more flexibility. We are forced to be more transparent than anybody else because, at the end of the day, when you see a company with 200,000 employees investing in you, you’re allowed to have some issues or fears that the huge company will steal your ideas.”

He also notes a change in the composition of founding teams.

“They’re not as old as I am because I am 42 but they are coming with some corporate experience,” he says.

Looking across the huge continent, Amartino says there are clearly some major differences in stages of maturity, culture, currency and so on.

“In Peru or Colombia we helped start the startup culture, in others we’re getting into startup ecosystems that were already mature. They’re can’t be a single model for all our academies.”

There’s an ongoing debate as to how Latin American startups should focus but Amartino firmly believes that local expansion in native country and then the broader region is a smart model.

“Part of my job is to help these companies have a regional scope. The ideal is to have a global company born in Latin America but realistically you need to build the company locally. It might be different doing business in Brazil or Chile but we share some cultural background.”

Although some suggest that Latin American firms might more profitably pursue ancestral homelands like Spain and Portugal, Amartino disagrees.

“One company tried Portugal and we discovered the differences between doing business in Brazil and Portugal were really, really huge,” he says. “It was really weird to discover that.”

Of course, governments the world over have attempted to mimic the success of Silicon Valley with their own programmes to encourage technology entrepreneurship. In Latin America, Startup Chile, which offers startups direct financial incentives, has become renowned but there are other approaches too.

“With Startup Chile the objective was to put Chile on the map and get entrepreneurs from all over the world to go there. It was something they really excelled at and if I travel to, say, South Africa, everyone talks about Startup Chile. For me it was a really good programme. With Startup Brasil they select a batch of accelerators and give them money to give to startups. They aren’t doing the work directly because they believe the best way to foster a startup is without all the government intervention. [So far] the most successful has been Startup Chile. However, Startup Brasil is doing an excellent job and Startup Peru is building on all these initiatives.”

Although there is competition on and off the football pitch among countries in the region, Mariano says that national differences tend to be set aside in business.

“Something interesting is that the rivalries you have among countries, you don’t see them in the startup ecosystem. [Online retailer] MercadoLibre is from Argentina but a lot of people in Brazil think it’s a local company.”

In Silicon Valley, tight links between universities, the state and private companies help foster an ecosystem. In Latin America, this is still emerging.

“In some countries it’s already set up, like in Buenos Aires. When you see where the engineers and entrepreneurs came from, they came from these universities that have entrepreneurship programmes and mentorships and that kind of stuff. Trying to bring public and private sectors together [across the region]will happen but it will take five years or 10 years.”

Having iconic Latin American successes will help create a template for success, he adds.

“Everyone knows [Brazilian IT services giant] Stefanini and [Argentine IT solutions group] Globant but then there are [Brazilian fashion web retailer] Dafiti and [online sporting goods seller] NetShoes doing an excellent job. [Online trading platform] DeRamate was bought by MercadoLibre… You look at [language course provider] OpenEnglish, [real estate portal] Properati… the new generation of twentysomething entrepreneurs are looking at these companies as new icons within their reach.”

Such is the interest in Latin America that some groups are forging links between the US and LatAm. The Technology Foundation For The Americas, for example, is promoting Miami and South Florida as a hub and Amartino sees this as a positive development.

“You might say San Francisco and the Bay Area is the logical point but the reality is we have a lot of bonds and ties with Miami and Florida. They are trying to capitalise on accessibility with all the flights every day. I think it’s a good strategy for Latin American entrepreneurs to get into the US market.”

There remain some frustrations and Amartino laments that technology is not always seen as the source of disruption and automation that it is elsewhere.

“It’s not as technology intensive as in Europe. People here try to refine business models and solve problems instead of looking at the new technologies.”

Still, he is delighted by the many innovations he sees.

“Mexico has really good hardware startups. Brazil is a hugely different monster and what you have there is the emergence of Big Data interpretation and analytics.  Argentina has good mix of companies. There are really, really good security startups across the region and social commerce is big.”

We break off the call and wish our respective teams well for the World Cup. England, sadly, are out very shortly afterwards, defeated by Uruguay, but Argentina and several other Latin teams are set fair. By the time of the next World Cup, it’s possible that there will be several more brand names starring from an emerging technology scene.


Martin Veitch is Editorial Director at IDG Connect