The Colombian startup ecosystem is one of the fastest-growing in Latin America thanks to multiple government initiatives that have fostered a thriving market that attracts significant international investment. Despite a turbulent past that slowed early development, Colombia is now one of the most exciting regional markets for Latin American startups, especially those with a technology focus.
Colombia has a population of 50 million people and an annual GDP of $330.2B in 2018 growing at 2.6% annually, making it the fourth-largest country in the region. Compared to Brazil and Mexico, Colombia is still a relatively new market, attracting 12% of Latin American investments in 2018. Colombia has 346 startups, the majority of which are found in Bogotá, Cali, and Medellín.
The Colombian ecosystem has seen significant development in its technology with internet penetration reaching 65% in 2018 and mobile phone penetration at 64% currently. Colombia also has the 4th highest number of internet users in Latin America, which has encouraged the growth of digital startups such as Rappi and MUY, which users can operate from their phones.
Startup growth in Colombian has also been supported by government programs such as INNPulsa, which aims to promote business development and investment and Invest Pacific, an organization that focuses on attracting business to Cali and Colombia’s Pacific Coast. Similar initiatives such as Apps.co and the creation of the Ministry of Science, Technology, and Innovation in 2016 are specifically targeting science and technology startups. The government accelerator RutaN, based in Medellin, is also supporting startups through funding and mentorship.
Colombia now has around 38 seed, VC, and private equity funds available to startups as well as multiple accelerator programs such as HubBog in Bogotá, which offer innovation and business programs to Colombian startups and SMEs. Other accelerator programs include Creatic, ParqueSoft, Macondolab, and Corporacion Ventures. The main Colombian startup investors include Polymath Ventures, Capitalia Colombia, Condor, Impulsum Ventures, and InQlab, as well as international investors Magma Partners, Monashees, GE32 Capital, and SoftBank.
Colombia’s biggest startup hub by far is Bogotá, the capital city and the center of tech innovation for the country. Only a five-hour flight from the US, Bogotá is strategically located to promote cross-border relationships and has been attracting increased attention from the US market. Medellín, Cali, and Barranquilla are also proving to be innovative startup hubs in the country, each producing local startups that have a regional impact.
Here are the top 10 startups that are at the forefront of the Colombian ecosystem.
10 Colombian Startups to watch
Rappi is Colombia’s online food delivery platform and also its first unicorn startup after a $220M Series D round led by DST Global. The company was accepted into the prestigious YCombinator accelerator program in 2016 and has since continued to attract the attention of foreign investors; SoftBank invested $1B in the company in 2019 as part of its $5B Innovation Fund. Now valued at an estimated $3.6B, the startup recently announced a 6% reduction of its workforce as it turns its attention toward productivity and affordability instead of growth and market share.
Viajala is Latin America’s top air travel metasearch platform is the largest discount flight search engine in Latin America. The company was founded by Thomas Allier and graduated from StartUp Chile in 2013. Viajala received investment from the Colombian government initiative RutaN as well as Wayra and Altabix but has grown with very little capital invested since the outset.
Platzi is an online ed-tech platform that provides business and marketing courses for tech startups taught by the top experts in the field. The company was accepted into YCombinator in 2015 and now includes a YCombinator startup boot camp, taught by Sam Altman, on their platform. Platzi offers classes in both Spanish and English. In 2018, the ASU+GSV Summit recognized Platzi as the most prestigious education event in the world out of over 600 other companies.
4. Ayenda Rooms
Ayenda is the largest budget hotel chain in Colombia with a network of over 50 hotels in Bogotá, Medellín, Barranquilla, and Pereira, amounting to around 500 rooms. The company made over $1M in its first year in business and has attracted investment from SoftBank and 500 Startups in a $1.2M Seed round. Ayenda recently launched into Mexico where it will be competing with its Indian counterpart, OYO, one of Softbank’s biggest bets to date.
OmniBnk is the first neobank for small businesses in Latin America. Omnibank analyses SMEs’ electronic invoices using big data and machine learning to calculate risk and provide loans online in under one hour. The company was founded by Colombian Diego Caicedo and Chilean Andres Abumohor, with headquarters in Bogotá, and now manages a network of over 150 lenders and 10,000 companies. In 2018, OmniBnk also signed a partnership with BTG Pactual to lend over $200M to small businesses across Latin America through the OmniBnk platform.
MUY is a food tech that uses artificial intelligence to predict the volume of demand and reduce food waste in its cloud kitchens. The startup has a network of cloud kitchens and physical dining locations throughout Colombia and Mexico serving more than 200,000 dishes per month. The company was founded by Jose Calderon, the previous owner of the Colombian food delivery network Domicilios, which was acquired by DeliveryHero. MUY raised a $15M Series B funding round led by ALLVP in October 2019.
Ubits is a corporate learning platform that offers online courses to businesses across Latin America. The platform offers e-courses in various business disciplines such as marketing, sales, client communications, and customer services. The startup was accepted into YCombinator in 2018 and has since raised capital from Venture Catalysts, Z Nation Lab, Magma Partners, and GE32 Capital. UBits currently has over 10,000 enrolled students and more than 200 e-courses available online and is the biggest platform for business training in Latin America.
Vozy is a voice assistant powered by artificial intelligence that is reinventing business-customer communications across 15 different countries, including Chile, Mexico, Puerto Rico, and Colombia. Vozy’s virtual assistant, Lili, is capable of understanding and speaking in 8 different regional accents, helping companies communicate with their clients more efficiently. The startup participated in the accelerator program Parallel18 in 2018 and has received investment from Magma Partners, Troopa, Impulsum Ventures, and Condor.
Frubana is a B2B agrotech platform that connects restaurants and small retailers directly with producers in Latin America. The startup is a graduate of the 2018 Summer YCombinator cohort and has raised a total of $12M in two funding rounds with investment from Monashees, GE32 Capital, and Kairos. Frubana created 100 jobs in less than a year and is growing at 50% per month. The startup currently provides services to over 1000 clients across Colombia, Mexico, and Brazil.
HABI is a technology-driven real estate platform helping to simplify the homeownership lifecycle in Latin America. The platform uses a proprietary-pricing algorithm and scalable processes to make buying and selling homes quicker and more efficient for its customers. Tiger Global Management led a $5.5M pre-seed round in HABI in November 2019 with other US-based firms FJ Labs and Supernode Ventures. The startup’s technology works to reduce property sales time from approximately 14 months to two weeks.
Colombia is just beginning to develop its tech ecosystem, but it is off to a strong start having already registered a unicorn before its larger counterpart, Mexico. The ecosystem shows promise for growth through the blossoming cross-border relations with the US market. Colombia will definitely be a top market to watch in Latin America in 2020.