How we bridge the gap in climate innovation and investment in Latin America

Latin America still attracts only a small share of global venture capital – just 2% – which helps explain why only five of its cities appear in StartupBlink’s latest Global Startup Ecosystem Index among the top 100 innovation hubs: São Paulo, Mexico City, Bogotá, Santiago and Buenos Aires.

But the region is rich in ideas, talent and purpose-driven entrepreneurs who have already proven their ability to create value on a global scale.

Over the past decade, Argentina and Chile have emerged as two of the most vibrant startup ecosystems in Latin America. Not just because of the number of companies being founded but because they represent resilience, adaptability and a new approach to innovation in the face of global challenges.

Despite economic instability and structural gaps, these countries have produced some of the region’s most disruptive solutions. Argentina leads Latin America in unicorns per capita (startup companies that have reached a $1 billion valuation). Meanwhile, Chile has the highest startup penetration per capita in the region, demonstrating that scarcity can often spur creativity.

Unfortunately, these efforts haven’t yet been enough to develop a strong and stable innovation ecosystem. Some countries have even taken steps backwards in recent years due to issues such as rising insecurity, political instability and economic challenges.

Still, every crisis brings new opportunities. Latin America is well-positioned to help tackle one of the world’s greatest challenges: the climate crisis.

Latin America is inextricably linked with nature, as it is the world’s most biodiverse region, home to 30% of the world’s primary forests.

Its main economic activities depend on natural resource extraction (mining, agriculture and livestock) but we deeply value their intrinsic value. This has forced us to continually discuss the relationship between economic growth and nature preservation.

That’s why Climatech is growing rapidly in Latin America. From precision agriculture tools to clean energy platforms and carbon capture startups, entrepreneurs in the region are developing technologies to address mitigation and adaptation.

Many of these innovations are explicitly built for fragile ecosystems and under-resourced communities, which makes them especially relevant for the Global South. Two notable examples are Kilimo and Suncast, which both leverage artificial intelligence (AI) and create affordable solutions in critical areas.

Kilimo uses AI to address water scarcity in agriculture. It collects weather data from public sources and provides farmers with smart, data-driven advice on how to irrigate their crops without requiring any additional equipment.

The company also helps design and set up advanced irrigation systems that reduce water use and improve soil health through regenerative farming techniques. Kilimo’s business model is also unique: large companies pay Kilimo to reduce their environmental impact and that money is then used to reward farmers who adopt more sustainable practices.

Suncast uses AI to predict energy generation from photovoltaic or wind power plants. The company manages forecasts for 40 utility-scale plants in Chile, totalling 4,975 megawatts of clean energy installed capacity.

The company promises to reduce the world’s clean energy costs through efficiency. Therefore, Suncast also has a system to estimate the level of soiling on the photovoltaic panels, which enables the optimization of module cleaning quantity and timing.

So, how do we showcase such local successes and leverage the climatech boom to bring investment to the Global South?

If Chile has stood out in Latin America, it is largely due to its public-private innovation policy, facilitated through the Government’s Production Development Corporation (Corfo).

The Corfo programme “Startup Chile,” a startup accelerator founded in 2010, is recognized worldwide as a success story.

It has been instrumental in nurturing entrepreneurial talent and providing resources and support to emerging companies. The numbers speak for themselves; the entrepreneurs who have gone through the programme have generated sales of more than $2 billion and the valuation of the programme’s portfolio exceeds $5 billion.

To help develop the Chilean innovation ecosystem to maturity, the Chilean government launched a new public policy in 2024 called StartupsLabs: a national network of physical and digital spaces to support science and technology-based companies across the country.

The first of these spaces, called startuplab.01, will be in the capital and will be promoted by Corfo and Fundación Chile with a focus on Climatech startups.

In Argentina, development has been more fragmented but it has led to the emergence of technology hubs in cities such as Buenos Aires, Córdoba and Rosario. In all cases, public education has played a key role in the capacity building of entrepreneurs, supported by private investment funds such as NXTP Ventures and Kalei Ventures.

Though less centralized than Chile, Argentina’s mix of public education, local innovation efforts and growing access to venture capital is driving the expansion of key sectors such as agtech, biotech and climatech, with Rosario emerging as a city to watch.

Rosario has emerged as a key innovation hub in recent years, boasting a strong academic and scientific foundation anchored by public universities that foster technology transfer. Its position within Argentina’s main agricultural corridor has made it a natural hub for ag-biotech innovation.

The region is home to research centres, acceleration funds, such as GLOCAL, based in Rosario and SF500, operating across the Santa Fe province, as well as community initiatives, including the BCR Startup Network, which supports startups working at the intersection of sustainability, biotech and agriculture.

To truly unlock Latin America’s potential in climate innovation, we must scale these success stories by leveraging the power of policy, capital and collaboration.