Entrepreneurship created 4,171 jobs in four years

Ventures supported by incubators created 4,171 jobs in four years, with accumulated sales nearing $475 billion.

Startups backed by these organizations saw a 23% increase in sales in 2020 compared to the previous year, while exports grew by over 400% in the same period, according to data gathered by Corfo from incubators supported by the state. Additionally, the recent study highlighted Magical, 3IE, Imagine Lab, IncubaUdeC, and ChileGlobal Ventures as the top performers in terms of their overall performance.

Source: El Mercurio

Incubators have become key players in increasing the success odds of startups, by energizing regional ecosystems through coordination actions and promoting entrepreneurship while fostering local innovative environments.

This is highlighted in the latest “Evaluation of entrepreneurship support platforms of business incubators and accelerators supported by Corfo”, conducted by the state entity with the aim of gathering information regarding the functioning of these platforms and their impacts, considering aspects such as business model, services provided to entrepreneurs, financing schemes, and territorial deployment.

In Chile, currently, there are 13 incubators supported by Corfo, with 9 in the Metropolitan Region, two in Valparaíso, one in the Biobío Region, and one in La Araucanía. Through their programs, these entities support startups in various sectors in the creation, development, and growth of their businesses.

According to the recent report’s data, the startups supported by the incubators showed a 23% increase in sales in 2020 compared to the previous year, reaching $33.004 billion. Meanwhile, over the past four years, they reported accumulated sales of over $474.868 billion, representing a return of approximately 13 times the investment made by the State in the incubators during the same period from 2017 to 2020.

Moreover, there was a 402% increase in exports, reaching a total value of $4.461 billion in 2020. However, Corfo notes that this explosive leap is due to one of the portfolio’s ventures being in the scaling stage, so isolating it from the analysis shows a 5% increase.

Pandemic Effect

On the other hand, capital raising and job creation experienced a 15% and 25% decrease, respectively. These declines are explained by an increase in startups in early stages of the incubation process (i.e., projects from business idea to commercial pilots), as well as by the negative effects of the COVID-19 pandemic.

However, considering the past four years, these variables reach significant figures, reaching $61.194 billion in capital raising and 4,171 new jobs.

Furthermore, Pablo Terrazas, executive vice president of Corfo, warns that according to data collected by the state, by the third year of incubation, startups manage to increase their sales by 80%, and their survival rate exceeds 60%. “This shows that this policy of promotion and support for the ecosystem is achieving more and better startups, consolidating successful firms that are emerging from the country to impact the world.”

And he adds: “Despite in 2020, due to the pandemic, thousands of entrepreneurs were affected, the incubators managed to adjust their operating models and thus support them, even reaching new territories. (…) In recent years, Chile has made considerable progress in consolidating the local entrepreneurship and investment ecosystem, becoming one of the best countries for entrepreneurship, and from Corfo, we have promoted its development and flourishing.”

“We are proud of unicorn cases, which maintain the ecosystem’s sense and ENCOURAGE THE NEXT GENERATIONS TO UNDERTAKE.” Pablo Terrazas Executive Vice President of Corfo.

Imagine Lab: Driving the development of technological businesses with a focus from the Information Technology industry and the private sector is the focus of Imagine Lab, founded in 2013 by six entrepreneurs alongside Microsoft.

CEO Javier Cueto explains that they focus on both high-potential technological ventures in very early stages and startups that are beginning to scale. In 2021, they supported over 50 firms, and in the last five years, they have supported over 500, with 85% coming from Chile and the rest from abroad, mainly from Latin America but also from Singapore and Germany. Among their successful firms are AgendaPro, Mudango, and AltumLab.

Regarding their results, he details: “At the portfolio level, active startups have billed over US$100 million in the last five years and raised nearly US$30 million in private capital, which we believe will grow exponentially in 2022, where we have a series of startups in Series A and even the first one entering a Series B.”

Regarding the role of incubators, Cueto maintains that these have played a fundamental role in generating a flow of quality operations in the national ecosystem, as “it is not enough to aim only for quantity, but to generate ventures that have a clear strategy, a validated model, and are in a position to scale and raise investment. However, recent public policies have aimed to see incubators and accelerators only as a service provider rather than a key partner, aiming more for quantity than quality, which we believe does not allow us to reach the potential we really can have and generate a greater impact.”