The Uruguayan startup ecosystem: a close view from an insider.
Sergio Delgado, Fundación DaVinci co-founder and Managing Director, recently finished Fundadores.uy, a book about the stories of twelve successful young Uruguayan entrepreneurs. In an exclusive interview with Global Delivery Report, he discussed Uruguay’s startup investment sector and Fundación DaVinci’s activities.
Delgado is a member of the CoWork Latam Montevideo managing team. He has been promoting several startup related events since 2008, such as MontevideoValley, MIT TR35, Hackers & Founders Montevideo chapter and OpenCoffee Club Montevideo). More recently, he has been involved in promoting a startup incubator program through DaVinci Labs, a subsidiary of Fundación DaVinci. Fundación DaVinci is a partnership organization which promotes the entrepreneurial culture in Uruguay.
GDR: You have a privileged view into understanding Uruguay’s entrepreneurial capabilities. In your opinion, what are the core strengths of the Uruguayan startup ecosystem?
Delgado: I think it is related to our immigrant past. Our ancestors were persons who came from different countries, mostly from Europe, looking for a better future, escaping from wars or from economic crisis. I think as society, we have in our DNA an entrepreneurial avocation to get ahead of difficulties, to generate value. Also, we look forward to globalization.
We have improved our infrastructure. As an example, nowadays we have one of the most important communication networks in Latin America. Also, Internet availability through a pioneer education program like Plan Ceibal (Uruguay’s OLPC implementation), is making a positive impact on every Uruguayan child.
It doesn’t matter if you have the money, if you have the technical skills, an MBA, a PHD, or access to resources. There is something more important, and that is the will to work together.
Since 1990 the government, the private sector and civil society had worked to stimulate the entrepreneur culture in Uruguay. I cannot forget to mention what Fundación Desem is doing, part of Junior Achievement International. When I was 16 years old, I participated in an educational program called young entrepreneurs, where you need to make your own company in conjunction with other teenagers; this kind of experience reinforces the entrepreneurship culture in Uruguay.
I think Uruguay is doing well; its ecosystem is getting traction. It has the challenge to collaborate more, a challenge I believe every society has. The limits of innovation are related to people’s will to collaborate with others. It doesn’t matter if you have the money, if you have the technical skills, an MBA, a PHD, or access to resources. There is something more important, and that is the will to work together.
GDR: In the recent years Uruguay’s direct foreigner investment has grown significantly, especially in energy and the pulp industry. This kind of mega investment captures most of the press attention, eclipsing the Uruguayan government’s efforts to enhance the development of the technology sector. In your opinion, how do you find the high-tech investment climate in the country?
Delgado: I find it healthy. I can relate to the Prosperitas Capital Partners experience. When it started operations in Uruguay, the founders were convinced the bottleneck in the startup ecosystem was the funding availability. In time, when funding was available, they found the new bottleneck is the availability of projects in which to invest. In Uruguay, the seed funding average for a startup is around $200,000 (US). For an international investor, this amount of money is not very motivating. Our challenge is to generate projects looking for $10,000,000 of funding. But, without doubts, there is a healthy local funding system, which is connected to the global funding system.
GDR: In your opinion, what are the main structural impediments in Uruguay to develop high-tech ventures?
Delgado: The biggest issue, the key issue, is the Uruguayan culture. As we discussed before, the challenge is the willingness to collaborate, the will to go further and create together, to not see others as competitors. This is the key issue we have today. At the structural level, we have everything we need. There are smaller countries with wars, bombings, terrorist attacks, territory disputes with neighborhoods and in spite of that, they succeed developing high-tech ventures. Here in Uruguay we have plenty of natural resources. We have a state with concrete warranties, we are a democracy. We have a healthy economy, a developed private sector, and also a developed civil society sector. In my opinion, the key issue or the Achilles heel is cultural, a lack of a co-creation culture.
GDR: Let’s suppose a foreign company is looking to analyze investment options in LATAM. What are the organizations you recommend that it contact in Uruguay?
Delgado: Depends on the sector in which the investor is interested, but generally speaking, I recommend the contact UruguayXXI. Its mission is to stimulate exports and attract investment.
Another option I recommend is to contact us, Fundación DaVinci, through our website contact form.
GDR: Fundación DaVinci recently launched its startup incubator program through DaVinci Labs. Also, it published your most recent book, Fundadores.UY. In the near term, what are Fundación DaVinci plans, and what is the strategy it follows?
Delgado: As a publisher, Fundadores.uy is the first book we published. Nowadays we are working on another two, from different authors. One is related to fundraising, which details real life situations, and has advice to startups and early stage entrepreneurs. The other one is related to the process of creating a company.
On the other hand, with DaVinci Labs and the incubator program, we are receiving candidate applications up to November 16th. Foreign candidates are allowed, but there is a requisite to have at least one Uruguayan member. We are receiving the applications through FundaCity. You can find the list of requisites and details of the incubator program in our website. Fundación DaVinci is committed to promote and expand the startup culture in Uruguay. This is our core value, our horizon, what motivates us every day. This is our inspiration.