When Wayra stepped onto the scene in 2011, the startup world sat up and listened. The launch of the accelerator marked a major move by Spanish telecom giant Telefónica to position itself on the forefront of innovation and tech, simultaneously representing for developers and entrepreneurs an unprecedented opportunity to access the resources and networks of one of the biggest technology companies in the world.
And three years later, Wayra has come a long way. Its reach stretches across Europe and the Americas, encompassing 12 countries and 14 academies. Last November, Wayra CEO Gonzalo Martin Villasaid the entity had backed over 300 companies spanning 20 different digital industries, its portfolio reaching a total investment of $45 million – $31.3 million of which was secured externally. “We are here to stay,” he declared. “And the best is yet to come.” Today, Wayra’s portfolio includes a total 334 startups, which have raised $68.2 million in funding
A Latin American Giant
Wayra’s footprint is perhaps most notable in Latin America, where it has set up shop in Argentina, Colombia, Chile, Mexico, Peru, Brazil and Venezuela. It has backed 190 of the region’s startups, including 28 in Argentina, 30 in each Mexico and Brazil, 31 in Peru, 20 in Chile and 24 in Venezuela. Its companies have received $20.6 million in investments from third parties alone. And regionally, the accelerator has refined its approach.
“In this market, the stage of maturity is quite important for us,” explained Mariano Amartino, Director of Wayra Latin America. “Experience shows that the more mature a team is, the more it can profit from the acceleration stage inside Wayra, and therefore, the possibilities of working or doing business with Telefónica. Mature teams (I mean companies actually selling their products, having revenue flows or dealing with customers) are priority choices for us.”
That doesn’t mean that the earliest stage companies are ruled out. “We can bring companies working on previous stages if we see a clear business opportunity or if the team is balanced and high skilled,” he clarified.
Amartino is a sort of tech superstar in Latin America, having worked with big names Grupo Clarin and FON and boasting a successful entrepreneurial career with endeavors like Hipertextual and Überbin I/A. (He’s also a fun follow on Twitter.)
Now having shifted into the world of startup acceleration, Amartino has a keen view of the investment scene. Within Wayra, he and the team seek out well-structured business models –“not a definitive one, but at least one where you can see how you are planning to earn money,” he clarified. A balanced team and a clear vision of the problem being solved are also essential.
Acceleration falls somewhere between venture capital and angels as an investment option in the region. VCs, while still lacking in the market, seek more established and proven companies. Angels are perceived as another, different investment alternative.
Internationalization is a key element of Wayra’s Latin America strategy, whether regional or in more developed markets, like Europe and the United States. Amartino gave us his take on companies looking to export software and technologies beyond LatAm.
“It’s a goal that can show us the ambition that lies within the team and the company,” he remarked. “Selling cloud or business services to the U.S. is not easy and requires a lot of commitment to quality and performance, but mostly to customer service. You need to be very good, following and listening to your customers at every moment. Add it to the fact that as a software firm, you will be competing with companies from all around the globe, so in order to scale and to take advantage of Telefónica footprint, we clearly scout for companies with this kind of ambition, wanting to sell their products for big markets like the U.S.”
Expanding internationally, of course, is no easy task. Amartino pointed to legal frameworks and tax structures as major obstacles as well as one issue not often considered – distance. Even regionally, flying from São Paulo to Mexico City or Bogotá can require a lot of time and money. “However, I think these kinds of obstacles are the ones that make Latin American software companies really lean and agile, because they are used to dealing with a lot of regulations and frameworks instead of with just only one,” he reflected.
That being said, looking at the bigger picture – whether overseas or regionally – is an issue that plagues the Latin America’s startups on the whole. But some markets are better prepped for producing global solutions and technologies than others.
Mexico, Brazil and Argentina largely lead the pack. “The business services sector is well established and the relationship between universities (engineering, software) and companies are very close,” Amartino said. He made special note of Argentina, which “has a long tradition of building software companies for global or regional solutions.” Case in Point: Globant and MercadoLibre.
Overall, Amartino’s view of the Latin American tech ecosystem through the startup lens is realistic. Finding the mature businesses with the ambition and commitment to solve big problems and expand internationally, however, is easier said than done. And Wayra’s big success story is still to come.