In late 2020, the first year of the pandemic, Delian Asparouhov, one of the founders of Founders Fund—one of Florida’s leading venture capital firms— posted a tweet proposing to “move Silicon Valley to Miami.” “How can I help?” was the response from Francis Suarez, mayor of the city famous for its beaches, parties, and shopping.

Since then, the city has “attracted companies with $2 trillion in AUM to Miami; 81 new companies have added $1 trillion to the city’s economy in wages, and we’re ranked number one in tech-related job growth,” as Suarez himself told DFMÁS.

"Venture Capital " translates to "Capital de Riesgo": these are investments in small companies with innovative business models, which are often based on extensive use of technology and have great potential for growth and expansion into other markets. 

These are what are known as startups, where the most important thing—according to most investors—is the founding team. Venture capital is essentially a “bet” on entrepreneurs, where the return is often zero, but on some occasions—and hopefully most of the time—the return can be as high as 300x if you “hit the jackpot” by investing in the next Uber, Cornershop, Netflix, or Spotify. These are companies that initially had valuations of no more than a couple of million dollars but were later sold for hundreds or thousands of millions.

Global venture capital investments have grown exponentially, especially in 2021. This is the case in Miami, where investments exceeded USD 3.8 billion in 2021, while in the first half of 2022 alone they have surpassed USD 2.5 billion, according to PitchBook. These figures only underscore the fact that major funds focused on this type of asset have ramped up their efforts in this new epicenter of North American and Latin American entrepreneurship: SoftBank, Citadel, Andreessen Horowitz, and even Microsoft are opening offices in the city.

But that's not all—the founders of the leading unicorns (startups valued at over $1 billion) worldwide are choosing Miami as their new home. In fact, the founders of two of the three Chilean unicorns have already moved to Florida: Daniel Undurraga (Cornershop) and Eduardo della Maggiora (Betterfly) are part of this trend.

Added to this is the impact of the pandemic: remote work accelerated, and Americans themselves took the initiative to move to Miami after seeing that Florida was one of the first states to reopen while others remained closed. Low taxes (there is no personal income tax) and the pleasant climate further fueled this trend. 

In fact, according to the Financial Times, between July 2020 and July 2021, more than 220,000 Americans moved to Florida—more than to any other state in the country. Now, Latin American entrepreneurs are also arriving, driving a trend so strong that it has even led to a nearly 50% increase in rental prices in Miami.

As a result, this city has established itself as a new hub for Latin American venture capital, where investment expectations remain high and are directed toward regional funds that focus on local entrepreneurs and take advantage of synergies and exposure to major markets and investors who are increasingly setting up shop in Miami—a development that, far from affecting investment in Chile, could provide a major boost to it. 

By: Tomás Latorre