Why the city of eternal spring is attracting the attention of some of the most interesting new startups in Colombia.
San Francisco, London, Austin, Tallinn and Helsinki might be way off in the distance but ambitious Medellin has its sights set on breaking into the world’s most exclusive club of startup cities. In the world of startups getting traction is crucial and Medellin’s success in attracting some big names to the city is evidence that the hard work being put in by the local administration is starting to pay off.
With former software developer, Daniel Quintero, at the helm as mayor, the city has been cranking up the dial to put the infrastructure in place and develop the talent needed to make the city a hub for tech and AI startups.
He’s following on from some stellar work from previous administrations and the tireless work done by the Investment and Cooperation Agency of Medellin (ACI), a part private and part public organization, whose role is to attract new companies to the city.
The city’s financial system is one big allure, the quality of life from the weather and attractive cost of living another. As is the Ruta N incubator program managed by ACI.
According to CrunchBase, Colombia grew faster than any other country in the world in terms of venture capital fundraising in 2019. Much of that was due to the country’s first unicorn, Rappi raising $1bn. The Bogota-based superapp is the pride of Colombia’s burgeoning startup culture as is David Velez, the CEO of the region’s most successful startup, Nubank. Velez is from Medellin. Important active investors in Medellin include Kaszek Ventures and nonprofit venture fund Acumen.
As one of Medellin’s most vocal founders in Medellin, Rodrigo Sánchez-Ríos, founding partner of Jaguar Capital and the online real estate hack, La Haus, is one of the city’s biggest cheerleaders.
“A successful startup rises from the right ingredient combination: talented team, compelling vision, executing on limited resources against tall odds. The right environment can make or break this combination,” he says. Sánchez-Ríos believes there are 5 factors that make Medellin a winning destination for startups.
Connected to the US by direct flights to Miami (3 hours), New York (5 hours), Mexico City, Lima and Sao Paulo as well as direct flights to Spain.
“The combination of pleasant, San Diego–caliber weather with intense greenery all around you, generates a year-round sense of wellbeing that drives creativity and productivity.”
Medellin Work Ethic
“When building a startup, that’s what you want: people with a do-anything mentality, go-anywhere capability. The only other place I’ve experienced that combination of work ethic, meritocracy, and humility at scale is at MIT. Strong comp.”
Bang for your Buck
“Medellin feels like cheating in life because you get the geographical access, the beautiful weather, the can-do attitude, and the cost of living is a fraction of that of other tech hubs.”
The combination of these five magical ingredients plus the forward thinking attitude in city hall all convinced Andrew Ng to set up his Latin American HQ for AI fund in Medellin to nurture a burgeoning AI ecosystem. The decision could have a profound impact on the city’s fortunes as the AI Fund startup studio which builds new AI companies from scratch has raised $175m to accelerate these types of startups. In Colombia, the company is piloting an AI education initiative to develop and connect that talent with international companies and is training its first cohort of engineers, after choosing from over 400 regional applicants. AI Fund’s Colombia office also includes team members of four early-stage AI startups exploring sectors ranging from healthcare to education to customer support.
Prior to the coronavirus crisis, the city’s co-working spaces were brimming with overseas talent seeking to set up shop in Medellin for all of the reasons showcased by Sánchez-Ríos.
As remote working becomes an even more permanent fixture in the new normal, digital nomad workshops and off-sites are set to soar post-pandemic.
Medellin has been chomping at the bit during the pandemic to get back on with the business of attracting new investors and is now ready to leverage its natural charms and human capital to catapult itself higher up the league table of startup cities.
Maybe the next silicon valley will be a little greener, more tropical than the first one.
If you’re looking to set up a startup or plug into the startup ecosystem in Medellin and need help getting settled, contact one of the Casacol team to talk about long-term stay or strategic investment in the city’s real estate market.
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