InDrive, the global mobility and urban services platform, has announced the launch of its new Corporate Venture Capital division. This initiative, led by the experienced entrepreneur and investment professional Andries Smit, aims to revolutionize the startup landscape, especially in emerging markets such as Latin America, thanks to an investment budget reaching USD $100 million, in a move that could be vital for the developing startup ecosystem in the southern region of the American continent.
InDrive’s New Ventures division will focus on investing in promising startups, paying special attention to those in the post-seed and pre-Series A stages. InDrive’s vision is clear: they are looking for companies that not only have a proven product in the market but also challenge injustices, improve the lives of people and communities, and show rapid organic growth along with a healthy economy and cash flow.
This decision aligns with InDrive’s accelerated growth, transitioning from a small company to a global corporation. Andries Smit, now at the helm of New Ventures, brings his experience in leading transformations and acquisitions in large corporations and startups. His career includes strategic roles at Morgan Stanley, Aviva, and as a partner at Stryber, where he developed businesses in Europe, the Middle East, and Asia-Pacific.
Moreover, InDrive’s venture capital decision comes at an optimum time for the startup ecosystem in Latin America. Data published by Crunchbase indicates that the third quarter of 2023 saw an 8% increase in investments compared to the second quarter within the region, reaching close to USD $699 million in total. However, this represents a 46% drop compared to the same period in 2022, reflecting fluctuations in the investment sphere.
For a broader context, it is essential to look back at the year 2021, which marked a milestone in startup investment in Latin America, with a record figure of USD $13 trillion. In contrast, the first three quarters of 2023 saw only USD $2 trillion in investment, making venture capital proposals like InDrive’s vital to recover the investment levels reached by developing companies in LatAm.
Since its recent launch, InDrive has reported that over 300 contacts, including venture capital firms and startups, primarily from Latin America, have shown interest in collaborating. This demonstrates the readiness and willingness of the Latin American market to innovate and expand globally.
Startup Ecosystem in LatAm
Mark Loughran, president of InDrive, emphasizes that the mission of New Ventures is to identify high-growth startups operating outside of the traditional innovation regions, driving their development and maximizing their positive impact. Smit’s unique combination of corporate and entrepreneurial experience makes him the ideal leader for this new division.
The launch of this division reflects the growing importance of Latin America in the global startup ecosystem. The region has shown significant potential in innovation and entrepreneurship, attracting increasing attention from international investors.
Indeed, the report “The Global Startup Ecosystem Report” published by Startup Genome, highlights five Latin American cities for their potential in the startup ecosystem. Mexico City leads in human talent in the region, scoring 9 out of 10, where the quality and availability of qualified professionals in programming, science, and technology are valued.
In the market reach area, compared to other emerging startup ecosystems, Latin America generally scores low, with the exception of Bogotá, which achieves 9 points. This suggests that startups in Bogotá have extensive access to customers, facilitating rapid market conquest and enabling internationalization. On the other hand, Curitiba, not being a national capital but included in the study, stands out for the best overall performance in the startup ecosystem, with a score of 7 out of 10.
InDrive’s initiative is not only a growth opportunity for selected startups but also an indicator of the dynamism and resilience of the startup economy in Latin America. These investments will contribute to the rapid scaling of the selected companies, leveraging InDrive’s global customer base and market knowledge.
