Three Years of Magma Partners

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Francisco, Diego and I first started working on Magma Partners in December 2013, which means we’re just passing our 3rd birthday. We originally planned to invest in 4-6 Chile based companies per year, but quickly found that demand for private capital, high quality mentorship and a bridge to the US market outstripped our modest goal.

We like to be the first check into a startup and invest an average of $50k initially, with the capacity to follow on with $250k more in two niches:

  • B2B companies that serve the Latin American market
  • Startups whose tech team is based in Latin America but whose primary market is the US.

In 2016, we invested in 7 new companies, moved to new offices in Santiago and expanded our presence in Colombia and in the US. We’ve honed our expertise in helping Latin American startups derisk the jump to the US market and have had our first successes helping B2B companies in Latin America negotiate significant deals with legacy companies.

We also focused on building out our networks in Colombia, Mexico and the US. As more of our companies started to expand outside of Chile, it was the logical next step to live up to our promise of helping entrepreneurs with more than just money.

As we turn 3, here’s some of our 2016 stats:

  • ~200 new applications from 8 countries
  • 7  new investments, 28 total
    • 20 operating. 8 failed.
      • 2014 – 13 new investments. 7 operating. 6 failed.
      • 2015 – 8 new investments. 6 operating. 2 failed.
      • 2016 – 7 new investments. 7 operating. 0 failed.
        • First investment in Colombia
  • 10 companies with US clients, 6 with US operations
  • Helped 6 companies secure outside follow on funding
    • 4 companies raised follow on funding in the US
  • 10 profitable companies
  • 49 entrepreneurs from 9 countries with 163 employees from 17 countries

The Latin America startup ecosystem is getting stronger every year. Entrepreneurs have a better understanding of how they need to compete in order to be successful. More entrepreneurs are blogging, doing events and sharing knowledge. More investors are starting to understand that they can’t treat startups like private equity. And there were more acquisitions and funding of Latin American startups than ever before.

I’m excited for 2017!

Photo credits: Founderlist