Adapting to change and globalisation: a snapshot of the entrepreneurial ecosystem in Argentina

In 1895, Argentina became the first country in the world to establish identification by means of dactyloscopy, the system of fingerprint recognition. That ground-breaking development is a testament to the country’s innovative spirit and is reflected through ventures in fields ranging from software engineering to e-commerce and fintech.

With a population of 46 million, Argentina is the fifth largest entrepreneurial ecosystem in Latin America, trailing Brazil, Chile, Mexico and Colombia, and ranks 47th in the world, according to data from StartupBlink. Its value is estimated at $12 billion, a 164% jump from 2020 to 2022 compared to 2018 to 2020. There were also 14 ‘exits’ (a phase in which investors sell their shares in a company to make a profit on their investment) in Argentina in 2022, the highest number in the last five years.

“Argentina has one of the highest rates of unicorns per capita in Latin America and this makes us a benchmark in terms of entrepreneurial and ecosystem development. We’re in a particular and interesting position”, says María Julia Bearzi, executive director of Endeavor Argentina, who attended the sixth BBVA Open Summit.

However, just like in other countries in the region, this image has been tarnished by the challenging international economic situation, which has also hit the country’s entrepreneurial reality hard. While the country’s Gross Domestic Product bounced back after the pandemic with an increase of 10.4% of GDP in 2021 and 5.2% in 2022, inflation rose to over 100% per year in February 2023, according to the World Bank. It is a reality that shapes the Argentine entrepreneur, as Julián Gurfinkiel, founder of flight comparison website TurismoCity, points out. “A distinctive feature of entrepreneurs in Argentina is adapting to change”, he says. “The country’s rules and economic climate train entrepreneurs to act more quickly in the face of adversity”.

Stimulus packages are already in place to turn this type of negative situation around. In July 2022, the World Bank approved a $200 million loan to promote the country’s growth and support the creation of tech-based companies. Thanks to this funding, the Argentine government launched the Argentine entrepreneurship programme in December 2022. Endowed with $50 million, it focuses on consolidating initiatives that boost the green economy, digitalisation and the health sector.

Argentina, home of major ventures with a global spirit

Internationalisation is the key for innovative projects looking to scale up and make an impact. However, for Argentine entrepreneurs, a global spirit is a trait that runs deep. As Guibert Englebienne, co-founder of the software engineering and technology company Globant, said during his speech at BBVA Open Summit 2023, “when an entrepreneur starts out, the first thing they do is test themselves in the local market, but we were counter-intuitive and decided to sell in the United States and the United Kingdom. This made us learn something that many people, particularly in Argentina, fail to understand: we need to be ultra-competitive if we want to sell”.

Julián Gurfinkiel, from TurismoCity, agrees with Englebienne that this international perspective is already a part of Argentina’s entrepreneurial DNA. “Now I’m hearing that more Argentinean entrepreneurs are launching their products in another country without launching it first in Argentina”, he says.

This international footprint is also featured in the Argentina’s startup ecosystem report, produced by the Spanish public business entity ICEX. In it, it says that “Argentina has resources, talent and a unique track record of creating successful ventures at a global level. This makes Argentina a country with great potential for entrepreneurial development in the digital technology sectors”.

An example of the entrepreneurial momentum currently sweeping the country is the fintech company Ualá, the only unicorn in the region according to CB Insights, which operates in Mexico and Colombia. You can also catch a glimpse of the region’s potential through other companies that are close to achieving this status, such as the e-commerce logistics company Clicoh, or the edtech platform Coderhouse. “Unicorns exist and generate employment, innovation and wealth for the countries in which they operate”, says Bearzi, from Endeavor Argentina.

Buenos Aires, Argentina’s entrepreneurial hub

The Argentine capital is the country’s major entrepreneurial hub and the fifth largest in Latin America behind São Paulo, Mexico City, Bogota and Santiago de Chile. Buenos Aires has become one of the most important ‘fintech’ ecosystems in the region where unicorns like Ualá have emerged and where other companies like TurismoCity aspire to keep climbing in an environment with certain challenges to overcome. “The most urgent challenge is normalising the economy. The country’s situation needs to return to normal. Normal again so that someone can attract an investment within the country, so that a fund wants to invest and so that a startup can receive payments and make them to other parts of the world, something that is currently really tricky”, says Gurfinkiel, from TurismoCity.

To promote projects like TurismoCity and support entrepreneurs in the country, BBVA Spark will soon be available in Argentina through a comprehensive offer that supports the scaling of high-growth companies. “Argentina continues to be a fantastic machine for churning out entrepreneurs”, says Roberto Albaladejo, global head of BBVA Spark. These financial services will strengthen the ties between high-growth companies in Argentina and other countries like Spain. “BBVA Spark is here to make it easier for Argentine entrepreneurs to land in Colombia, Mexico or Spain”, adds María Julia Bearzi, from Endeavor Argentina.

More than 100 years after being the first country to use fingerprint analysis as a means of identification, Argentina continues to leave its mark on the entrepreneurial ecosystem through resilient projects and innovations with a global spirit.