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Bolivia’s start-up ecosystem begins to take off, dive in or wait and watch?

Bolivia’s start-up scene is beginning to take off, following in the footsteps of its larger neighbours: Brazil, Argentina and Chile, and the growth potential on offer is starting to attract the interest of international investors. According to Mapeo TIC Bolivia, the country counts some 155 active start-ups, half of which operate in the transport, retail, e-commerce and corporate software sectors. 

Investors and entrepreneurs are not alone in their support for Bolivia’s start-up ecosystem, at both national and regional levels the Bolivian government is starting to show support for local entrepreneurial ventures, primarily through the organisation of events to attract international investment. As an example, Santa Cruz Innova, the innovation agency of the chamber of commerce of Santa Cruz, and the United Nations Development Programme (“UNDP”) organised the “Mapping the Entrepreneurial Ecosystem” event to identify entities assisting local start-ups and regional financing networks. 

There are also private initiatives supporting the sector with Pista 8 being widely recognised as the leading start-up accelerator in Bolivia. It was founded in 2019, by Viviana Angulo, the former Latin America director of Valhalla Capital Partners, a Canadian angel investment firm. She collaborated with the founders of eight companies to kick start an entrepreneurial ecosystem in Bolivia based upon an international and collaborative accelerator model.  

Viviana Coloma, Manager at Solydes Accelerator said, “The growth of the Bolivian start-up ecosystem is attracting a lot of attention which is surprising considering that the country is amongst the poorest in Latin America. Bolivia has a growing number of high-quality entrepreneurs and has close ties to its neighbours, such as Paraguay, to start the process of international expansion.” 

“Bolivia has a growing number of high-quality entrepreneurs and has close ties to its neighbours, such as Paraguay, to start the process of international expansion.”

Viviana Coloma, Manager, Solydes Accelerator, Bolivia

Start-ups like tuGerente, an administrative solutions programme; EnviosPet, an e-commerce petshop, and Minkedu, an e-learning platform, are some of the companies that obtained international financing and expertise from the Bolivian accelerator. Pista 8 assisted these start-ups by validating and strengthening their business models, providing advice to create a strategy and actively supporting a greater level of market-specific knowledge. Viviana Coloma observed, “It is interesting that most of the companies are involved with logistics, last mile solutions and fintech. Due to the pandemic, several health techs also emerged. One unknown is that despite the fact that half of the country is agricultural, there are still not many digital solutions for agriculture.” 

At least 43% of Bolivian start-ups managed to obtain some sort of financial support from the administration, private investors or international financing organisations. These businesses are being driven by a new generation of entrepreneur, according to Viviana Coloma, “The founders are young people, who have studied and have experience, in Bolivia and abroad, with a lot of expertise in digital solutions. On average, they’re 32 years old and are attracted to start-ups because they did not find the opportunities they were looking for in the labour market and they realised that, with current technology, they can start a business themselves with a very clear vision of what they want to grow.” 

Attracting local investment under the current regulatory framework is difficult […]. So, as an obvious response, young people started turning to foreign funds.”

Viviana Angulo, Managing Director, Pista 8 Accelerator, Bolivia

Unfortunately, the venture capital industry in Bolivia is not keeping pace with the opportunity and despite the support provided by government, start-ups are increasingly looking to foreign investors for capital. Viviana Angulo, the Managing Director of Pista 8 Accelerator explained, “Attracting local investment under the current regulatory framework is difficult because financial entities could not legally invest and Bolivian investors have an old-fashioned banking-style mentality. So, as an obvious response, young people started turning to foreign funds. As a result, many Bolivian start-ups were established abroad, through online platforms. Many of them in Delaware, US. And the only thing they need in Bolivia is to set up a limited liability company to be able to invoice.” 

Will foreign investors have the confidence to move in and accelerate the growth of Bolivian start-ups at scale or will the local financing ecosystem get its act together? We’ll be watching for you! 

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