Colombia is home to one of the largest economies in Latin America, ranking 42nd in the world. It’s driven by a variety of sectors, including agriculture, oil, mining and manufacturing.
Indeed, oil exports have long been a major contributor to Colombia’s economy, but there have also been plenty of agricultural contributions, including things like coffee, bananas and flowers. In an attempt to keep up with global trends, however, the government has made an effort to invest in technology and infrastructure, reducing Colombia’s dependence on oil and diversifying the economy.
Unsurprisingly, due to the country’s many interesting cultural and natural attractions, tourism has also received a fair bit of investment over the years, bringing in not only more visitors from abroad but contributing quite significantly to the economy too.
However, while there’s been a fair amount of effort put into growing and developing the economy, Colombia has been and is facing many challenges, including inflation and significant fluctuations in currency, both of which are largely affected by global oil prices.
Startup Ecosystem
Colombia not only has a large and fairly successful economy relative to the rest of Latin America, it’s also emerged as a good startup environment, with the country seeing a 30% increase in the emergence of new startups between 2022 and 2023. By the end of 2023, the country was home to a total of 1,720 startups who had managed to secure a total of $786 million in investment.
A pretty good measure of a country’s economic success and potential growth is the existence and emergence of unicorns – that is, privately owned companies that are worth a minimum of $1 billion.
Of course, just because a country has produced a few unicorns doesn’t necessarily mean that it’s absolutely thriving, but it does tend to indicate that the conditions are conducive to easily starting a company, attracting investment and keeping it afloat.
Some of the most important factors that have influenced Colombia’s positive startup ecosystem include:
- Government Support: The Colombian government has made a concerted effort to support startups and growing businesses by providing them with mentorship programmes, funding and other relevant resources.
- Strategic Location: It may not be located in the centre of Europe, but with access to both North and South American markets, Colombia is ideal for conducting international business.
- Innovation Hub: Cities like Medellín have managed to establish successful tech hubs along with incubators and co-working space that have helped nurture emerging businesses.
- Creative, Young Population: The youth of the Colombian population, along with their ambition and technological insights, have been very helpful in supporting and contributing to tech-based startups.
- An Effort to Improve Infrastructure: Colombia has been intentionally growing tech and internet infrastructure which has been a major contributor to facilitating the digital business expansion.
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Unicorns in Colombia
As of October 2024, Colombia is currently home to three businesses that have achieved unicorn status, and with any luck, there should be a few more to join the list in the next few years.
Rappi: $5.25 Billion
Founded in 2015, Rappi is the operator of an on-demand delivery platform that connects consumers with merchants located locally, as well as couriers.
The purpose of the platform is to help consumers place orders for things like groceries, food, liquor and even pharmaceuticals by means of its advanced logistical and technological capabilities. Operating all over Latin America, users are able to make use of the platform to order whatever they need and have it delivered to their homes quickly and conveniently.
With nearly 4,000 employees, Rappi was most recently valued at $5.25 billion making it Colombia’s highest-valued unicorn.
Life Miles: $1.15 Billion
Life Miles is the operator of loyalty programmes that are designed to reward frequent flyers. Having progressed through eight funding rounds, the company provides flyers with loyalty points based on miles travelled.
These points that are earned offer flexible functionalities – they can be used on things like rental cars, hotels, online shopping and even for downloading music.
As of 2024, Life Miles was valued at $1.15 billion.
Habi: $1 Billion
Founded in Bogota in 2019, Habi is a $1 billion company that has developed a tech-driven real-estate platform. The platform is intended to simplify the process of buying and selling residential properties for middle-class consumers.
To do this, it reduces sales time which ultimately mitigates risks that sellers face and gets rid of the need to involve plenty of intermediaries. It does this by providing users with both analytical tools and human insight so that they can buy, sell and even improve their homes easily and with easy access to important information.