Eleven Latin American startups have been chosen by Silicon Valley-based venture fund 500Startups for its latest accelerator program, the company’s 10th, and which offers funding and mentoring to increase fledgling companies’ chances of success.
Six of the startups are in Mexico, one in Argentina, with two each in Colombia and Chile.
“Being selected by 500Startups gives you a seal of quality that helps when approaching other investment funds, and gives you credibility, and access to their network, which is important for us as a B2B, and to their mentors, who are experts in growing startups and help you to focus on the main metrics for building the business,” Argentine startup Slik’s co-founder Ezequiel Linares told Nearshore Americas.
An employee engagement platform, Slik allows companies to measure and improve their employees’ experience and, as a result, performance and profits.
“Being selected increases your probabilities of success,” he said, pointing out that only 1% of startups that apply for the accelerator program are accepted.
500Startups’ accelerator program was ranked second worldwide for number of successful exits, with 162, in a 2018 list compiled by Forbes, behind fellow Silicon Valley-based venture fund Y Combinator.
‘How to avoid mistakes’
Linares said one specific area in which the accelerator program has helped Slik is in price definition, in order to enable the startup to offer a product in line with the market.
The other factors of the accelerator program he cites as essential are 500Startups’ network of mentors, “who tell you how to avoid mistakes”, and their business network.
After launching its Beta version in 2018, Slik unveiled its paid-for version in January, and aims to chalk up its first 100 clients by the end of this year.
“There is a lack of tools for companies to measure performance and the climate of satisfaction among employees, and define strategies to improve the resulting indices,” Linares said.
“There’s a big opportunity because companies are now learning the value of these tools,” Linares said.
He said Slik’s target companies are those with more than 200 employees that are looking to improve their internal processes, and across multiple sectors of the economy.
“Initially, Slik’s investment focus is Mexico and Spain, followed by the US, Europe and Asia, but first we will see how the growth takes place organically in order to see where we focus our efforts,” he said.
With staff in Argentina, Mexico, Spain and Australia, the company pursues a remote-working practice, and while “nobody wants to go to an office to work every day”, Linares acknowledges that it is also a challenge to work remotely with staff in different countries and time zones.
He attributed the company’s presence in Mexico to it being “the world’s largest Spanish-speaking country, and where we hired a marketing company for all of Latin America, and being here gives us access to a lot of companies as a B2B business”.
‘A huge help’
For Mexico’s AppHive, which provides tools allowing users to create their own apps, being selected for the accelerator program “is a huge help”, the startup’s co-founder Jonatan Vázquez Piña told Nearshore Americas.
“The support allows us to better develop the product and add value to it,” he said.
“Apart from the US$60,000 funds, the program offers us mentoring and the recognition that being selected by 500Startups brings, out of the 1,400 companies that applied, and which opens a lot of doors, even just for approaching other investors.”
“500Startups guides you and offers advice, but there is a lot of freedom in terms of how you use the funds, there is no control over how you move forward, only the need to report back on progress.”
Vázquez Piña also acknowledges that Mexico is a fertile land for app and software development.
“There is a lot of motivation in Mexico, people looking to grow, and who are influenced by trends in the US, and there is entrepreneurship here, there is a lot of talent and it is being fought over among startups and larger companies,” he said.
He said it is often a case of “convincing” talent to join a startup, as they are unable to compete with the higher salaries offered at larger, more established companies.
“But that there is a willingness among young people to get onboard fledgling projects,” he said.
And there is a niche for startups, as some specific, specialist needs are not always attended to by larger companies, he added.
Since launching a Beta version of the service in May, AppHive now has more than 800 registered users in 50 countries, with the largest number of users in the US, Mexico and India.
“Over time it will get easier as we procure more resources to recruit talent, but at the start it’s a little like the chicken and the egg, you need talent to grow, but you need to get bigger in order to attract talent,” he said.
He said AppHive is looking to have 50,000 users on the platform by the end of this year, and which will be boosted by marketing, in which they can now invest with the help of the injection of funds.
“We are working with universities and incubators, as there are a lot of people, from students to entrepreneurs, who want to build apps, but it’s expensive to hire a developer, and those are the people we are targeting,” he said.
He said that the most common type of apps developed by users are for the internal management of companies, human resources management, for education, and mobility and delivery services.
The other startups selected for the accelerator program are Mexican financial services portal Baubap, corporate catering company Come Bien, debt solutions provider DB Menos, children’s books subscription service Little Bookmates, financial advisory Net Worth Consulting, and, from Colombia, Tourbitz, which offers management software for tour operators, and Vico, a shared housing app.