Olga Patricia Rendón Marulanda

Although they have difficulties getting investors, Bogota and Antioquia are the main ones responsible for the entrepreneurial spirit in the country.

In Colombia, there are already 1,321 technology-based startups in 31 sectors, an increase of 19% compared to those that existed in February last year. This was revealed by the ColombiaTech Report 2022-2023.

And this is good news, considering that the market is going through what experts have called “an investor winter” for this type of companies, since before and during the pandemic startups attracted a lot of resources, but with the change in market conditions – which occurred in the adjustment of the economy after the confinements and the war in Ukraine – they do not find resources to leverage so easily.

“The current situation reflects the change of perspectives that investment funds are having when deciding to which business they are going to inject their capital,” assured María Paula Peñaranda, from KPMG Colombia, who detailed that the region had a decrease of -47% of raising compared to 2021; however, there was an increase in rounds going from 582 to 784, only achieving negotiations of lower amount.

“Colombia is being resilient to this,” said Peñaranda, as the country accounted for 15% of the capital raised by the region, reaching $8.1 billion in venture capital, according to Endeavor venture capital data.

“This leaves a clear message for Colombian entrepreneurs and that is that investments will be much more selective, and funds will go for those businesses that have sustainable growth over time, healthy economic units, good margins, and above all that demonstrate profitability in the medium term,” added Peñaranda.

In this regard, Guillermo Jaramillo, president of KPMG, noted that the report showed that startups in the country have successfully raised capital. “During the last 10 years they managed to raise more than 4,621 million dollars, a figure that puts us third in the region, only behind Brazil and Mexico,” he said.

The map of Colombia

Fintechs, dedicated to financial services, have the highest volume with 15.3%; followed by retail tech, and retail trade, with 8.1%; health techs, which have to do with the health sector, represent 7.0%, among others.

And the results of the report show that Cundinamarca is the department with the highest concentration of startups (60%), followed by Antioquia (21%). While only four additional departments have more than 1% of the total number of mapped companies: Valle del Cauca (7.8%), Santander (2.6%), Atlántico (2.4%) and Caldas (1.4%).

This is the second time that KPMG Colombia, in partnership with Eafit, CESA, the Chambers of Commerce of Bogota, Cartagena and Cali, and INNpulsa, present the ColombiaTech Report, which seeks to highlight the importance of startups for the economic development of Colombia.

The study also shows that these companies are fundamental in the generation of employment, as almost 16% have between 21 and 50 employees, and only 4% of the startups mapped have more than 100 employees on the payroll.

According to Jaramillo, in Colombia “We have startups that have shown a way to be regional and we have already achieved as an ecosystem that 25 companies from four cities enter the Y Combinator program. Colombia is the 13th country with the most accepted companies, which is evidence of our national talent”.

He recommends that the government and the private sector strengthen the support network for technology-based ventures and begin to look beyond the regional market, focusing on global solutions.

Opportunity in times of crisis

According to Guillermo Jaramillo, president of KPMG, “In every economic cycle, when there is a slowdown and getting more investment becomes difficult, the most important thing is to make decisions that allow to operate and grow at a slower pace, but that guarantees survival while the economy reactivates. “Clearly, companies that want to raise future rounds must focus on profitability in the short and medium term, as well as sustainability strategies in the environments where they operate and demonstrate a great capacity for execution and global vision that allows them to enter markets where they can increase their company value by more than 5X,” said Jaramillo.