As I’m sitting on a plane leaving Chile the proud and impressive Andes mountain range is presenting itself to my left and I say goodbye to its capital Santiago which is covered in a large grey smoggy cloud. “Electrification of mobility will make a huge difference to our quality of life in Santiago!” I remember Daniel Stern saying, who is the Innovation and Mobility Manager of the Kaufmann Mercedes Group in Chile and setting up the Blue Mobility Venture fund.
My thoughts skip past my last days here, during which I encountered some of the most impressive vineyards and hiking trips I have ever experienced and instead cast my mind back to last Monday. I had the pleasure of meeting some key sustainability personalities, introduced to me by Daniel in the months prior to my arrival in Chile: Maria Angeles Romos from SQM Lithium (a global player in Lithium mining), Arsenio Ovalle, Sebastián Muzio, Rodrigo Salcedo Campino from EMASA, a strong player in the LATAM after sales and servicing market for automotives and of course, José Tomás Comparini from Güil mobility ventures Kaufmann group.
Capture: Jose Tomas from Guil Mobility Ventures with Woon Hui and Chris
Having seen them all in just a day it felt to Woon Hui Oh and myself a bit more like speed dating. Thankfully our jet lag allowed us to hold on until the end of the night – And I have to say that I thoroughly enjoyed sharing insights with these professional innovators. Chile offers a lot of opportunities and here are a few key take-aways worth sharing with you – regardless if you are an early-stage Startup, Corporate and/or investor in the mobility or electrification sector:
- Chile is the launchpad for mobility innovation across Latin America: the country is a fantastic starting point for innovators (big and small) to launch their mobility solutions: Did you know that the famous navigation app Waze was first tested in Chile? Within one of the stablest LATAM economies and a growing middle class, the Chilean population is open to try out new products and services willingly. Brands don’t seem to matter. Never have I seen so many car brands like in the streets of Santiago: VW, Chery, Geely, Chevrolet, Mahindra, Foton, Chevrolet…etc. every OEM seems to find this market to be of great interest for trials.
- Making it easy makes it fast: Obviously Chile being an open and unbureaucratic economy allows a company to launch new products and services quickly. Combined with a lower cost on labour, low import taxes etc we can find perfect conditions to apply lean Startup methodologies to test assumptions quickly and fail fast at low regret costs!
- Combined with low competition around mobility innovators the Chilean market can be a perfect entry point for mobility Startups wanting to enter the LATAM market. My personal gut feeling is that, in many areas of innovation around not only mobility but energy, Chile is perhaps 5 years behind what we are seeing in Europe. Only 1500 EVs have been sold so far in the whole of Chile. It wouldn’t take an optimist to see this as a tremendous market opportunity for everything around electrification, especially considering Chile is committing itself to challenging decarbonization goals.
- A perfect climate for early investors in Startups: Less cost for startups and a higher chance to become successful can mean a better deal around initial lower capital requirements and better future valuations as startups grow quickly in a de-risked environment. More and more CVCs feel that the time to invest (and get a great deal) is now. The good news for startups: CVCs want to get involved in helping the Startup strategically. Smart money is on the menu.
- Forward looking innovators creating strong ecosystems: As mentioned in a previous article, Chile is the second biggest Lithium producer globally. As long as the world has a growing demand in particular for safer and longer living batteries with Lithium Iron Phosphate cell chemistries – Chile will be a huge enabler for the electrification of mobility and allowing the rapid growth of renewables. However, forward looking companies such as SQM Lithium recognise the increasing speed of innovation can be disruptive. That’s why the company pushes on investments into the electrification of mobility and innovations along the battery chain.
Capture: Woon Hui, Angeles Romos from SQM Lithium and Chris
- Other mobility players such as EMASA have understood the same message and position themselves as key enablers for Chilean mobility innovators. That’s why the company has decided to be a pioneer by bringing a mobility ecosystem together – Amongst other things, they have created a physical presence by setting up an impressive mobility hub which can also partially serve as a future lab. We were thoroughly impressed (and jealous)!
Capture: Rodrigo Salcedo Campino, Woon Hui, Chris, Arsenio Ovalle, Sebastián Muzio
Capture: Rodrigo showing us a Tesla motor in the lab area of EMASA’s mobility hub
Capture: A new rising star across the Mobility Innovation scene: Emasa Mobility Hub
In summary: from an innovation point of view this impressive country has the right conditions to become a strong player in the mobility and energy transformation.
Chile has begun its own decarbonisation journey and due to similar market conditions to Europe, it can be considered a strong opportunity for European scale ups and investors, including corporates, to apply initial learnings from regions such as Europe or the US, implement and improve them further for a growing market in LATAM.
Capture: Muchas gracias to Daniel Stern from Woon Hui and Chris
A big “muchas gracias” to everyone – and in particular to Daniel Stern (aka the matchmaker) for sharing your time and exchanging your opinions on mobility so openly. We are looking forward to joining up networks and working together to accelerate innovation around sustainable mobility.
Do you want to discuss these insights further? Are you a Scale up, a VC or CVC eager to understand where the opportunity can be for you in LATAM? Then reach out and get in touch with us under: c.gruen@novazure.com
If you missed the first Chile article we posted click here to read.
Something tells me that I haven’t been in Chile for the last time…
