Since the tech boom looked beyond Silicon Valley and began to crop up in other parts of the globe — “rest of world,” some corporate types called it — Colombia has been a major point of interest. Not only did Latin America’s third most-populous country promise a lot as it emerged from decades of turbulence and moved into fast-paced economic expansion, but I’d argue that Colombia also represents a microcosm of what the region has been, is, and could potentially become. This especially applies to tech.
The country gave birth to Rappi, one of the region’s fastest-growing and most ambitious startup unicorns. Medellín, a city previously associated with the typical Latin American issues of organized crime and violence, has rebranded itself as a bustling tech hub. Many issues remain, including social and geographical fragmentation and a controversial but seemingly unstoppable political transition.
This Sunday, Colombians went to the polls, and over half of them voted for the left-wing option on the ballot. If these results hold in Colombia’s upcoming presidential elections, it could be the first time in modern history that Colombia has been ruled by the left. There has consequently been a lot of handwringing from investors and bondholders, and many worry that financial uncertainty could upset the growing, but still incipient startup ecosystem. In this case, Colombia’s neighbors may be helpful in determining what the future may look like.
Take Mexico or Brazil, both of which elected anti-establishment presidents a few years ago. In the former, private investment has generally stalled. In the latter, inflation is rampant. Both struggled to stay out of a recession even before the pandemic. Yet, the impact has not been felt as much in both countries’ booming tech sectors, where investments in startups are at all-time highs.
James Bosworth, a tech and security analyst based in Bogotá, thinks the same will happen in Colombia. “The tech startup scene in Colombia will be great, under almost all scenarios,” he said. “The concerns are broader. Bonds, banking sector, energy sector, security, general support for the poor, promotion of peace. Some of those overlap with the tech sector and have an impact on it — particularly banking to fintech stuff — but nothing direct.”
Boz, as Bosworth is known in the business, did think there was space for an administration that affects tech for the better. Here is where Chile is illustrative. In Chile, there has been a concerted effort by the state (rather than any particular government) to promote tech entrepreneurship. As a result, Chile punches well above its weight when it comes to producing high-performing startups per capita compared to the rest of the region. It will be very interesting to see what the country’s freshly-inaugurated president Gabriel Boric’s approach will be on that front. But that’s a story for another day!