In 2011, the word “startup” wasn’t well-known in Latin America, and only a few people who worked within startups were known as entrepreneurs. In that year, the amount of money raised by these types of companies was less than $100 million, and there was only one unicorn in Latin America: Mercadolibre.
Today, LatAm’s startup ecosystem has shifted dramatically. The term entrepreneur is incredibly popular, even aspirational, and most countries within the region have come to understand the importance that startups have in their social and economic development. The region now boasts more than 42 unicorns that, along with hundreds of smaller startups, attracted upwards of $15.7 billion in investment in 2021, 100 times greater than the amount raised just 10 years prior, without signs of decreasing in the interim. LatAm is living an extraordinary panorama for its startup ecosystem.
One organization in particular has not only lived to witness this evolution, but has been a fundamental player of it: Wayra, Telefónica’s open innovation arm, which recently celebrated its 10-year anniversary of developing and investing in Hispanic founders and startups.
The Org spoke with Agustin Rotondo, Regional Manager at Wayra Hispam, about his career and the role Wayra has played in the region.
Rotondo is an early Millennial, and despite a generational tenure trend of Millennial employees spending no more than an average of 2.9 years in a company, he has worked at Telefónica since he graduated from college in 2008. “Telefónica is my home. Most of what I am today as a professional is thanks to the organization and the people I have worked with,” Rotondo told The Org.
Since Rotondo started at Telefónica, he always had clarity on two things: his fascination for startups that are disrupting the status quo, and his desire to be part of Wayra, to work directly with the startups he was so intrigued by.
“I remember when Wayra’s Country Manager position opened up. Those who were in charge of the process wanted to bring in an outside person. I sent emails to all the people who had some kind of decision-making authority on the role and after much insistence, I was able to enter the process. Now you know how the story ends,” Rotondo recalled.
His determination took him to lead Wayra Argentina’s operation in 2018, which ultimately took him to lead the whole LatAm operation, from Monterrey to Buenos Aires, in 2020.
Wayra was founded in 2011 as an open innovation project to boost innovation inside Telefónica by working with the best global external talent. “The company understood that it was not enough to innovate internally, but that it was crucial to partner with startups and those who were accelerating innovation in their industries and markets. That’s how Wayra began,” Rotondo said.
According to Rotondo, by that time the organization couldn’t understand the potential that the project had. It was an experiment to see if they could close gaps or accelerate processes in terms of innovation and service development.
Wayra started as an early-stage startup accelerator that consisted of a 12-week mentoring program and the opportunity for startups to secure an investment of up to $50,000. By that time, as Rotondo described it, “it was a ‘spray and pray’ approach in which the selection thesis was practically open to anyone doing something interesting.”
“We were pioneers, especially in building a relationship between corporations and startups in Latin America. When we started, practically no company had an open innovation or corporate investment strategy. This is still a reality in the region where not even 15% of companies have any type of Corporate Venture initiative,” Rotondo said.
“As the startup ecosystem became more mature, Wayra realized that its role as an accelerator fell short for Telefónica’s core and purpose,” Rotondo said.
In 2018, Wayra’s strategy pivoted. Wayra dropped the accelerator part of the business, and focused resources to become a connector and a business developer between Telefónica and startups around the world. The company prioritized finding technological disruptors that already had product-market fit, with sales of more than $100,000 per year, and the potential to provide disruptive solutions to Telefónica and its customers.
Two specific factors pushed a change in Wayra’s mission: One, the region saw the creation or arrival of more accelerators, like Startup Chile or 500 Startups, that began helping early stage startups across Latin America. And two, there was no required connection between the startups being accelerated by Wayra and Telefónica’s business.
“Wayra offers investment and a unique and smooth interface between entrepreneurs and our network of corporates, governments and other partners, adding value to the ecosystems where we are present,” Rotondo said. “We no longer accelerate startups, but look to invest in companies that can help scale within Telefónica’s ecosystem. The investment ticket is now up to $300k with follow on possibilities.”
Worldwide, Wayra has invested in more than 400 startups. Latin American startups account for 27.5% of its portfolio (110 startups), with more than $20 million in regional funding allocation, 22 successful exits and more than 3,500 direct jobs generated by Wayra’s startups.
Within the portfolio, they have renowned startups such as 1DOC3, ADDI, Acámica (exit), Alfred, Chazki, Crehana, Cinepapaya (exit), ePayco, Fluvip, Hogaru, Increase, Pulpomatic, Webcentrix and Vozy. Wayra Hispam’s startups have raised more than $150 million from third parties.
Like any professional fund, Wayra measures typical metrics such as “Total Value to Paid In”(TVPI), the ratio of the current value of remaining investments within a fund, plus the total value of all distributions to date, as well as Distribution to Paid-In” (DPI), the cumulative investment returned to the investor relative to invested capital.
But its most important metric is total revenue generated between Telefónica’s ecosystem and its startups, or total gross merchandise value (GMV). In 2021, Wayra LatAm’s startups accounted for $15 million GMV within Telefonica.
“We consider that we are a top performer fund in Latin America. Over 100 startups from our portfolio are already working with Telefonica to provide disruptive solutions to the Group and its customers,” Rotondo said.
What’s next for Wayra
“There is a great opportunity for corporations to bet on, work on and develop startups, especially now that the ecosystem is thriving. The best is yet to come,” Rotondo said.
Wayra works with third-party organizations like Interamerican Development Bank (IDB) or Peruvian Seed Capital and Entrepreneurship Association (PECAP) to promote corporate venture initiatives in Latin America, from building awareness, sharing best practices and co-investing in startups with other companies.
Wayra Hispam’s main goals for 2022 are to invest in 10 new startups in the region, secure more than $20 million from Wayra’s startups in GMV with Telefónica, launch its 5G laboratory around the region and get traction with its new initiative Open2metaverse, a worldwide search for disruptive metaverse technologies to create strong partnerships for the future.
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