Latin American innovation firms team up to catch market boom

When Laura Chicurel set up Innova 360 in 2017 to help corporates innovate, the startup ecosystem in Chile was very nascent. Capital was not that widely available and what there was came by way of government grants and other help.

There weren’t many local examples of large corporates tapping into startup innovation. Innova 360 was often starting from a blank sheet of paper and a zero knowledge base.

“We took this very active approach in educating and creating an ecosystem for corporates, to connect and to learn – particularly learning about international experiences because they didn’t have that many local cases that they can learn from,” says Chicurel on the CVC Unplugged podcast.

Today, seven years on, the ecosystem is starting to boom and firms specialised in helping companies innovate want to capitalise on the growing wave of interest in startup-style disruption.

To that end, Innova 360 merged with Bluebox, a CVC-as-a-Service provider based in Mexico, earlier this year to create a larger third-party innovation player in the LatAm ecosystem.

Bluebox brought an added capability — not just helping companies build innovation strategies but also directly managing CVC funds on their behalf. The two services were complementary, with Innova 360 more of a holistic consultant and Bluebox a hands-on fund manager.

“Even though we had some overlap in our services – so maybe people perceive us as competitors – we opened up the conversation saying, ‘hey, maybe we should unite forces and create a much larger impact if we are together,’” says Chicurel.  

“Mexico is a very attractive market because of the size. Chile, not that much – it’s attractive for other reasons, but not because of the size,” says Chicurel.

The combined company, called Innova 360 powered by Bluebox, currently manages some $15m across eight funds for corporate clients.

Double-edged sword

Latin America has the advantage of having a large number of countries, in relatively close geographical proximity, all speaking the same language – with the exception of Brazil, which is its own beast – and with quite a lot of cultural overlap despite having different cultures. Together, this forms an incredibly strong market.

But the region has historically been focused on mainly on M&A, and it’s been difficult to convince corporate management of the advantages of taking minority positions in startups rather than acquiring them outright. Aversion to risk has also been widespread, and a large chunk of big private sector companies in the region have been family-owned for generations and often resistant to change, used to the old ways.

“It’s a work in progress,” says Chicurel.

That’s all been changing more recently, especially as new generations are taking control of the family companies, she says, with younger executives being more open to innovation and less risk averse. There’s more of a recognition that innovation is a crucial part of remaining relevant.  

Savvier corporate investors

Another emerging development is that corporates are increasingly investing outside of their core business, something Chicurel sees as a sign of a maturing investment environment.

They are not only going for technologies that are further from their existing operations, but also investing in new markets and industries where they’re not quite involved today. Fund sizes are also increasing – not quite to the level you would see in the US, Europe, or Asia, but still moving in the right direction.

Additionally, there are signs of corporates becoming less hermitic. Only a few year ago businesses would refuse to even be on a panel discussion – like the ones Innova 360 hosts – with competitors lest they give competitors insight into their strategies.

“‘I’m not sitting next to this company. No way will I go and talk openly about what I’m doing,’” Chicurel recalls them saying when offered speaking spots at their events.  “There was a lot of resistance in that sense.”

Today seeing multiple competitors sitting on the same panel at a LatAm event is commonplace.

The pie is growing

It’s no longer just the biggest corporates who want to invest in innovation, there new appetite from less-established and smaller corporates. This is part of the reason why Innova 360 and Bluebox wanted to merge, looking to take advantage of a growing opportunity, according to Chicurel.

“Before they were like, ‘oh, I would like to learn why I should do it, so I will hear about all these cases and I will try to understand why,’” she says

“Today is like, ‘okay, I understand I need to do it, show me how, can you help me to do it, how do we start?”