Wayra Chile began as an acceleration program supported by Telefónica (Movistar Chile), where they chose ten Chilean companies to provide mentoring, offices, and investment. Now, Telefónica has decided to transform the accelerator into a venture capital fund.
This transformation began in 2015, where Wayra Chile set the route to follow the path of becoming an innovation hub, as it has done in other countries.
This turn responds to Telefónica’s needs. For large companies such as Telefónica, “it is too expensive, risky, and it takes time” to remain competitive in the face of the innovative environment, according to Claudio Barohona, country manager of Wayra. “It is easier to open up and work with entrepreneurs, in a win-win way, not buying or absorbing a company, but doing something useful for both parties.”
Telefónica noted that they could contribute more to the startup phase allowing entrepreneurs to obtain more clients and be suppliers of the company locally and internationally. In Chile, this makes more sense. Chile is a small market “the only way to grow is to play the global game and climb. And the best way to do it is through a great company that is in several countries. ”
In this change of model, Wayra Chile has taken the form of Corporate Venturing. They scout companies and inject resources for them to climb.
“It’s no longer about supporting ideas and accelerating them, but about supporting companies with a product created and tested, with two or four clients, with ten to 20 employees and who want to move to the next level, in users and countries,” says Barohona.
Currently, Telefonica invests $10M a year in climbing companies. For Chile, the plans are to spend $400K, either directly to the entrepreneur or with series A investment rounds.
Under this model, Wayra has already invested in three companies: Climo, an efficient air conditioning service; Teltoo, streaming optimization company, and Webdoox, a platform for managing digital contracts.
Each startup has received between $50K and $200K. Wayra takes a share of 4 to 10%. Telefónica pilots companies by becoming its primary customer, and then offer their services to its more than 13 million users.
Wayra gives preference to tech startups that offer solutions in Artificial Intelligence, cybersecurity, big data, IoT, and smart home.