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We are Latin America's premier Seed Fund and Venture Studio, built by serial entrepreneurs

Polymath is the pioneer of the Venture Studio model in Latin America, bridging the talent and capital gap of the region to solve the most complex challenges for the middle-class.

<h3>We are investing in and building human-centered technology companies to empower the middle-class of Latin America.</h3>

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<h3>We empower breakout entrepreneurs</h3>

We surface large unmet needs within the middle class, and develop (through testing and iterating) new venture concepts customers love, backed by powerful business models. We call this 13-week human-centered design process Ideation.

Design the company

A company is only as strong as its team. We recruit exceptional regional and international talent and assemble powerful founding teams who make the venture concept their own - and with our support bring it to life.

Convene the team

We work full-time alongside the founding team for the first crucial years, utilizing lean experimentation and a methodical, learning mindset to build, launch and grow the concept into an operating and scalable business. 

Accelerate the business

We provide the initial startup funding to get the business launched and operating, and we work to bring together the right networks of local and international investors to continuously raise capital for growth.

Assemble the capital

Once the venture finds product-market fit, we continue to advise and support at the strategic level. Our support focuses on business strategy, talent acquisition, growth, and fundraising. 

Support the Venture

<h3>We take a methodology-driven approach to building &amp; scaling companies from scratch</h3>

Elenas

Aflore

Autolab

Tani

Pacto

Our Ventures

We wanted to explore how VCs in Latin America invest in different countries, so we examined 34 of LatAm’s most active VCs that have made 1,524 investments in startups from 25 countries for $20B since 2018.&nbsp; As you can see, the trends are quite different from country to country.<div class="raw-html-embed"><iframe id="articleChart" src="https://polymathv.com/chart.html" style="width:100%;aspect-ratio:1.3" title="My pretty litle chart"></iframe></div> We compared the percentage of investments in foreign startups with the population and GDP of a VC’s home country.&nbsp; Naturally, VCs located in large countries invest more in local startups, while VCs in smaller countries need to look outward to foreign startups for sufficient deal flow, but there are a few interesting outliers.<figure class="image image_resized" style="width:91.48%;"><img src="/uploads/data_investment_LATAM_Mesa_de_trabajo_1_copia_6ec9ab5b49.jpg"><figcaption>% of deals in foreign startups VS population</figcaption></figure><figure class="image image_resized" style="width:92.35%;"><img src="/uploads/data_investment_LATAM_04_123793a161.jpg"><figcaption>% of capital invested in foreign startups VS population</figcaption></figure>Peruvian VCs invest more heavily in foreign startups than would be expected from its population and GDP.&nbsp; Peruvian VCs aren’t necessarily neglecting local startups in favor of foreign alternatives (37% of the investments in Peruvian startups were made by local VCs, which is roughly in line with the rest of the region).&nbsp; Rather, this is largely due to the fact that Peru produces relatively few startups.&nbsp; Since 2018, Peru has had 0.7 VC-backed startups per 1M people, which is only ahead of Ecuador (0.5 startups per 1M people) and Central America (0.2 startups per 1M people).&nbsp;&nbsp;Other indicators such as human capital indices, education attainment, GDP per capita, and inequality can’t explain this phenomenon as Peru is generally on pace with LatAm’s startup leaders Brazil, Mexico, and Colombia.&nbsp;&nbsp;The concentration of population in Lima should also help facilitate innovation and presents a massive first market for would-be startups.&nbsp; This warrants further investigation into factors such as tax and labor laws, cultural factors that affect the attractiveness of entrepreneurship and working for startups, technical training opportunities, and capital controls.&nbsp; It could also indicate that Peru is due for a startup boom in the near future.&nbsp; In the meantime, Peruvian VCs are finding deal flow by investing heavily in startups from the US and Colombia (Peruvian VCs made 44% of all investments in US startups and 21% in Colombian startups).Colombia is an interesting case that suggests there is a significant lack of local investors relative to the amount of Colombian startups.&nbsp;&nbsp;There is a strong trend showing VCs throughout the region invest a higher percentage of capital in startups from other countries compared to the percentage of the number of investments in startups from other countries.&nbsp; In other words, VCs are more likely to do relatively larger deals in foreign startups and relatively smaller deals in local startups.&nbsp;&nbsp;This makes sense as both sourcing and evaluation of early-stage startups tend to rely on personal networks more than later-stage deals.&nbsp; It’s much easier for a later-stage startup with multiple years of track record to catch the attention of investors, while companies just getting started have to rely much more on warm intros from their own networks.&nbsp; Naturally, these networks tend to be stronger within a startup’s local market.&nbsp;<figure class="image image_resized" style="width:89.46%;"><img src="/uploads/data_investment_LATAM_Mesa_de_trabajo_1_copia_2_ca7739cc3a.jpg"><figcaption>% of investment in local startups by local VCs</figcaption></figure> The only exception is Colombia, where VCs invest a higher percentage of capital in Colombian startups than the percentage of the number of investments they make in local startups.We next examined how many startups from specific countries raised capital from foreign VCs:<figure class="image image_resized" style="width:85.39%;"><img src="/uploads/data_investment_LATAM_06_33493832f2.jpg"><figcaption>% of investment in local Startups by foreign VCs</figcaption></figure>Again, Colombia is an outlier with 84% of investments in Colombian startups coming from VCs outside of the country.&nbsp; So while Colombian VCs are heavily focused on local deals (and even more focused on large local deals), there is still plenty of “room” for foreign investors.&nbsp;&nbsp;The difference is especially stark when compared to Brazil: Brazilian VCs make 73% of their investments in local startups, while only 3% of investments in Brazilian startups come from foreign VCs.&nbsp; This means that Brazilian VCs cover almost all local startups while still making a quarter of their investments in foreign startups.&nbsp; Colombian VCs are similarly focused on local startups, but it’s not near enough to meet local demand, so foreign investors fill the gap.The dominance of Brazilian VCs of their local market can at least partially be explained by the country's massive size (no need to look outside when there are plenty of local deals to be had) and the more pronounced differences between Brazil and other countries (language, culture, etc.) that make it more difficult for foreign VCs to enter the market.Colombia’s seeming lack of VCs is more difficult to explain.&nbsp; VC activity usually goes hand-in-hand with startup activity, and Colombia ranks 3rd in LatAm in the number of startups and amount of VC investment, 2nd in VC investment per GDP, and 5th in VC investment per population.&nbsp; Similar to Peru’s seeming lack of startups, Colombia’s seeming lack of VCs warrants further investigation into factors such as tax law, capital controls, a culture of risk aversion, etc.&nbsp; But based on Polymath’s decade of experience, none of these factors offers a satisfactory explanation, and Colombia appears ripe for more investors.&nbsp;There were also some interesting trends related to how startups from certain sectors are more or less appealing to foreign investors. &nbsp;<figure class="image image_resized" style="width:93.17%;"><img src="/uploads/data_investment_LATAM_Mesa_de_trabajo_1_copia_3_72348d382a.jpg"></figure> VCs are less likely to invest in startups from other countries that operate in heavily regulated sectors such as energy, insurance, healthcare.&nbsp; The lack of foreign investment for sectors such as proptech and eCommerce is less obvious.<h3> &nbsp;Conclusion</h3>Despite the proliferation of VC investment in LatAm over the past several years, the deployment of capital is far from uniform throughout the region.&nbsp; This highlights opportunities for investors to fill gaps in potentially overlooked markets.&nbsp; It also highlights the increased role local VCs can play in attracting foreign capital and getting foreign investors familiar with the nuances and opportunities in their home markets. &nbsp;

Cross border LatAm VC investment analysis

A Venture Studio is basically a company that builds other companies repeatedly following a specific step-by-step methodology to create and scale successful businesses.&nbsp;The main idea of the business model is that comprehensive, diverse, and expert teams can achieve amazing results when building over and over again, rather than just dedicating themselves to one single company.&nbsp;Venture Studios have become increasingly popular over the last 10 to 15 years, but we are only now starting to see their success in different parts of the world, where they have been able to create transformative businesses in different sectors and industries.&nbsp;In the meantime, we want to dedicate this blog to better understanding why some Venture Studios go on to become funds that invest in companies outside of the Studio, but that align with the studio’s thesis and are able to leverage some of the studio’s capabilities.&nbsp; As we stated before, <a href="https://polymathv.com/library/articles/6-reasons-venture-studio-mode" target="_blank" rel="noopener noreferrer">Venture Studios</a> are able to create and scale companies at a high success rate by employing a repeatable, relatively standardized methodology. However, there’s always a limit to how many companies you can build from scratch, even with a robust and talented team.<figure class="image"><img src="/uploads/blog_Why_Venture_Studios_make_great_funds_4047b21904.jpg"><figcaption>Venture Studios are able to create and scale companies</figcaption></figure>&nbsp;An increasingly common way for Studios to leverage their company-building expertise in a more scalable way is to look out for other like-minded entrepreneurs and fund them, while also giving them access to the expertise of the Studio’s team.&nbsp;According to research by Enhance Ventures, at least 21% of Studios in the world are now also investing in external companies, while 45% of them are considering starting a fund parallel to their building activities.<figure class="image"><img src="/uploads/blog_Why_Venture_Studios_make_great_funds2_80c6768c08.jpg"><figcaption>Do you have a Studio Fund?</figcaption></figure>&nbsp;As you can see in the graph, 80% of studios are now transitioning to a <a href="https://nextbigthing.ag/blog/venture-studio-business-model-explained" target="_blank" rel="noopener noreferrer">hybrid</a> business model, which helps them expand their reach and create even more impact as they work together with other entrepreneurs.&nbsp;With that in mind, here are 4 benefits of a combined Studio + Fund business model. &nbsp;<h3>4 reasons why Venture Studios make great funds.</h3><figure class="image"><img src="/uploads/blog_Why_Venture_Studios_make_great_funds3_3e6ae55f94.jpg"><figcaption>4 Reasons Venture Studios make great funds</figcaption></figure>&nbsp;<ol style="list-style-type:decimal;"><li>Robust operating platforms:</li></ol>&nbsp;Studios have large, multifunctional <a href="https://polymathv.com/team" target="_blank" rel="noopener noreferrer">teams</a> specialized in working with early-stage startups.&nbsp; Studios pay for these large teams with a variety of mechanisms, but in general, they are significantly larger than fund teams that are supported only with management fees (typically 2% of the fund size).&nbsp; When a studio launches a fund, it can make some of the studio team available to help the companies the fund invests in.&nbsp; This help isn’t free - it must be paid for through a combination of service fees and/or sweat equity - but it usually comes at a good value and can be a game-changer for early-stage startups.Startups face plenty of challenges, but three stand out when it comes to sourcing talent:<ul><li>Knowing how to find and attract top talent usually isn’t something entrepreneurs have a ton of experience in, and it always takes a lot of time and effort.&nbsp; Additionally, it’s tough for a small company to afford top talent in an increasingly competitive job market.&nbsp; The studio team can provide a roster of top talent ready to step in, and studio + fund combos are usually a lot more flexible when it comes to taking equity or other performance-based compensation.</li><li>Working for a startup is…kind of crazy. Priorities change quickly and often, resources are limited, the product is constantly in a state of flux, new ideas can get implemented over lunch meetings, and operating procedures need to be created from scratch.&nbsp; Some people love this sort of fast-paced, high-impact environment and it’s exactly what they need to thrive.&nbsp; For other people…not so much.&nbsp; Incredibly talented, top performers that leave large corporations to work for startups can struggle to adjust.&nbsp; Studio teams have extensive experience with the craziness of early-stage startups and have learned best practices from having been there and done that (several times).</li><li>Small companies often don’t need and/or can’t afford full-time help.&nbsp; When companies are growing so quickly, their talent needs change just as fast, and the labor market isn’t built to offer such agility.&nbsp; <a href="https://polymathv.com/library/articles/finding-common-ground-between-tech-and-product-teams" target="_blank" rel="noopener noreferrer">Tech development</a> needs could change from front-end to full-stack, to data expertise in a matter of months.&nbsp; Closing a single large deal could mean customer success needs to double in 4 weeks.&nbsp; The CEO could become too busy to lead sales efforts and finding a VP of business development becomes crucial.&nbsp; Studio teams are used to working on multiple priorities simultaneously and can be deployed for quick, high-impact projects.</li></ul> The challenges around talent can be especially acute in emerging markets, so the advantages provided by studios should be even more impactful.&nbsp;2. Entrepreneurial experienceA lot of investors come from financial backgrounds like private equity or investment banking and have no entrepreneurial experience.&nbsp;This is especially common in emerging markets (where the successful entrepreneur → VC route isn’t nearly as established as it is in places like Silicon Valley). While this background is great for later-stage investments in companies with multiple years of operating history and clear trends visible in their financial statements, it can be challenging with early-stage investments.&nbsp; Pre-seed and seed-stage companies have limited financial history, are typically changing rapidly, and often haven’t fully reached product-market-fit.&nbsp; Evaluating these types of companies can be extremely difficult for people that haven’t led or worked for an early-stage startup.&nbsp; Appreciating the challenges of rapid iterations, building the right team, balancing the need for standardization with the need for flexibility, etc., and then making accurate judgments of an entrepreneur’s ability to execute is hard.&nbsp; The studio’s intimate knowledge of the successes and failures of multiple early-stage companies can be a huge advantage.&nbsp;3. Funding Availability&nbsp;Despite venture studios’ rapid growth and demonstrated results, they are still a relatively unknown business model, especially in emerging markets.&nbsp; Raising funds for a <a href="https://polymathv.com/library/articles/what-is-the-role-of-venture-studios" target="_blank" rel="noopener noreferrer">Studio model</a> can be hard, very hard.&nbsp;When you raise through a more traditional fund structure, you are offering investors a vehicle that they already know and can handle more easily. This allows the Studio + Fund combination to raise and deploy more capital.&nbsp; Not only does this help the Studio + Fund scale, but it also helps portfolio companies by having better access to capital for potential follow-on investments.&nbsp;4. Access to more talent &amp; bigger networksWhen studio + fund combinations simultaneously create companies from scratch and invest in external companies, it creates a larger and more diverse pool of entrepreneurs, co-investors, customers, and talent in general. &nbsp;This creates exponentially more opportunities to transfer knowledge from one company to another. Also, the larger portfolio should create more (and more predictable) demand for the studio’s services, which will allow the Studio + Fund to afford more team members and continue <a href="https://polymathv.com/library/articles/how-cultural-fit-can-change-the-game-of-company-building" target="_blank" rel="noopener noreferrer">concentrating talent</a> within the firm to support portfolio companies.&nbsp;An individual’s skills, growth, network, etc. tend to increase as she works with more team members with diverse perspectives and skill sets (so the output from 5 smart people working together should be greater than the sum of the outputs of 5 smart people working individually). This, along with economies of scale and a better ability to predict demand and staffing needs, should make the Studio + Fund team more efficient, creative, and productive overall.&nbsp;

Why Venture Studios make great funds

Looking at the future of LatAm digital payments through the lessons of China

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The Working Women Seed deployed in 2013, learned about the lives and experiences of working women through the mothers, daughters, sisters, professionals, caregivers, and retirees that lived with them. They learned about the expectations put on “guerreras” (female warriors!), as they referred to themselves, as they worked to balance family, relationships, and career.

Insights from Research:

The first iteration of this seed led us to build around a strong sense of guilt from Moms (and dads) when they have to be away from their children, yet there was no willingness to pay. During the second one, we switched to providing online psychological services that resulted in great engagement but no WTP. Constant interaction with users resulted in the realization that Beauty had a big spend of pocket and that it was the way that society and working mothers had allowed them to take care of themselves.

Our approach

Elenas is modernizing and automating the direct sales model, taking the good parts of the traditional system–part-time work and trust-based purchases–and combining them with e-commerce. Now, women, or "embajadoras" can sell a wide variety of products from their own homes, they decide what to sell and how much they want to mark the price up, and Facebook, while Elenas manages the back-end support for product sourcing, delivery, and payment collection.

Business Model: 

As we learned the significance of beauty products/services for working mothers and the best mechanisms to activate sellers into the platform, we first experimented with content and a limited portfolio of products, yet this result in poor results.

Initial Challenges:

Elenas's first two years have been key to achieve Product-Market-Fit, the frequency and speed of iterations and learnings increased our success chances. The company has unlocked major milestones and is headed to achieve incredible results:<ul><li>Launched at the <a href="https://www.crunchbase.com/event/techcrunch-startup-battlefield-latin-america-2018">TechCrunch Startup Battlefield</a></li><li>Founders Zach Oschin and Thomas Harsch recognized in the top 30 founders of the country in 2020</li><li>Forbes Top 100 digital startups in Colombia</li><li>+250 distributors and brands</li><li>Closed a Series A round for US$6M in March of 2021</li><li>+90 team members in Colombia and Mexico</li></ul>

The Venture Today:

Elenas will continue its growth path in Colombia while growing its product portfolio and improving the income opportunities for thousands of women that are now opening their own endeavors thanks to the platform. After the most recent fundraising news, the team is now planning its international expansion, starting with the launch of its platform in Mexico by May of 2021.

What the future holds:

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During the Financial Services Ideation, our team discovered a striking cultural trend. They observed that while over 65% of the Colombian population does not engage with commercial banks, almost all interview participants received informal financial advice and services through trusted people or role models within their social circles.

Insights from Research

After understanding the role and motivations of informal financial advisors, the team established a business concept anchored on this recurring personality within middle-class communities in Colombia: the community advisor. It became clear that human relationships built upon trust were key to offer tailored financial services for our demographic.

Aflore is a direct sales network for financial services for those neglected the formal banking sector. It recruits trusted advisors within middle-income communities, and mobilizes them with training, digital tools, and the appropriate financial products, loans and insurance, to serve the financial needs of their trusted network.

Business Model:

Aflore has achieved important milestones and recognition for its business<ul><li>Over 23,000 disbursed loans</li><li>Tech platform with 95% of loan applications through digital channels</li><li>Secured US$10m of debt from Accial Capital in September 2020</li><li>Closed a pre-series B round of US$6.6m in February 2021</li><li>Forbes Top 100 digital startups in Colombia</li><li>Expanded their portfolio to include non-lending products with nationwide partners such as Sura, HDI, and R5.</li><li>Their core team has grown to +100 members</li></ul>

The Venture Today: 

Aflore aims to become the main financial platform for the emerging middle-class in Latin America. With a growing pool of active financial advisors, an increasingly diversified product portfolio, and rapid adoption of its digital journey, Aflore will scale its model of providing the unbanked and underbanked of the region with financial solutions designed for them.

What the future holds: 

Want to know more about Aflore?

The research started on the labor market in Latin America to understand the real status of informality and unemployment. Informality was present in a variety of sectors, including the auto repair market, in which today is concentrated the majority of transactions, however, they do not have the tools or knowledge to grow, impacting its service, quality, and overall supply chain.

Considering the relevance of this industry in the region and the impact it has on the emerging-middle-class, we took on the challenge to create a chain of car centers providing quality, growth opportunities for the shop owners and operators that are aiming to secure social and economic development for them and their families.

Our Approach

Autolab is redefining a traditional industry by providing the best value proposition in the market. Now, shop owners are empowered thanks to the professionalization of their independent businesses and car owners are having a transparent, interactive, and fully digital experience.

Autolab has achieved product-market-fit in Colombia, securing outstanding metrics of satisfaction and retention:<ul><li>94% of retention from Repair Shops</li><li>5-star rating from 90% of our client base</li><li>700% Increase in profit for shops in our network</li><li>7x growth of their shop network since July of 2020</li><li>Strong leadership team with combined expertise in product, tech, and operations</li></ul>

The Venture Today

Autolabs’ adoption in the Colombian market plus the expertise of the founding team building and evolving this solution, unlock expansion opportunities for Latinamerican markets experiencing similar challenges. The company has already started its expansion to <a href="https://autolab.mx/?utm_source=referral_seo&amp;utm_medium=referral&amp;utm_campaign=polymathv_1" target="_blank" rel="noopener noreferrer">Mexico where they initiated operations in 2021</a>. &nbsp;In the upcoming 2 years, the company will continue to expand to Peru, and Brazil, increasing its presence to over 20 cities and its network to 450 shops.

What the future holds

When it comes to healthcare for the middle class in Latam, our team discovered there are clear gaps in what both the formal and informal systems offer to patients when they need a medical procedure: the public system is slow and painful to navigate, while the private one can be costly and not always transparent.

We identified nine core insights that determined the path of concepting and prototyping. The common pattern between these nine insights was around access. Patients were concerned about their limitations in the current healthcare system; lack of coverage, massive delays to secure appointments, and payment limitations. &nbsp;

Our approach:

Tani is a managed marketplace of medical procedures that provides patients in the middle class with quality surgeons, price transparency, financial accessibility and most importantly continuous support in their health journey. On the other hand, Tani helps surgeons, especially emerging ones, reduce their administrative load, optimize their work and build a strong reputation.

Want to know more about Tani?&nbsp;

Pacto seeks to achieve the digitization of merchants and business owners in Mexico and Latin America and improve shop profitability by up to 5x. Integrating digital commerce with technology-based solutions with a financial inclusion platform for small and medium-sized businesses in the food and beverage industry.&nbsp;

The Pacto Operating System operates on a Software as a Service (SaaS) model, offering an all-in-one solution for restaurants. With integrated payment options, intelligent management features, and a dynamic menu accessible from any mobile device, it aims to enhance efficiency and customer satisfaction. By replacing manual processes and optimizing restaurant performance, the Pacto Operating System provides a comprehensive solution for restaurants seeking to streamline their operations.

Want to know more about Pacto?&nbsp;

We are Latin America's premier Seed Fund and Venture Studio, built by serial entrepreneurs

11

Years of experience

50K+

New income sources created

US$60M+

Capital raised

We are investing in and building human-centered technology companies to empower the middle-class of Latin America.

We empower breakout entrepreneurs

We take a methodology-driven approach to building & scaling companies from scratch

Design
the company

Convene
the team

Accelerate
the business

Assemble
the capital

Support
the Venture

Our Ventures

Elenas

Aflore

Autolab

Tani

Pacto

Looking at the future of LatAm digital payments through the lessons of China

Why Venture Studios make great funds

Cross border LatAm VC investment analysis

Engage with Us
If you would like to

11

Years of experience

50K+

New income sources created

US$60M+

Capital raised

We are investing in and building human-centered technology companies to empower the middle-class of Latin America.

We empower breakout entrepreneurs

We take a methodology-driven approach to building & scaling companies from scratch

Designthe company

Convenethe team

Acceleratethe business

Assemblethe capital

Supportthe Venture

Our Ventures

Elenas

Aflore

Autolab

Tani

Pacto

Looking at the future of LatAm digital payments through the lessons of China

Why Venture Studios make great funds

Cross border LatAm VC investment analysis

Engage with UsIf you would like to

Design
the company

Convene
the team

Accelerate
the business

Assemble
the capital

Support
the Venture

Engage with Us
If you would like to