Medellín: A City of Centralized Influence
This is our second post in our Colombia conglomerate / family research series.
Our understanding of Medellín is that the city is reasonably tight-knit, with the majority of businesses influenced by a core group of ‘five families’ that operate behind closed doors. Gathering info on these families proved to be remarkably challenging.
Before we continue further, please note the legend below to help you follow the maps and ownership patterns.
The primary entity of the Medellín region is ‘Grupo Empresarial Antioqueño’ (see map below), an unofficial consortium of 125+ companies. This confederation or ‘sindicato’ is comprised of three significant conglomerates that are interconnected with each other: Grupo Sura (insurance), Grupo Nutresa (food and chocolates) and Grupo Argos (cement). This joint ownership across different business entities was created as a way to prevent hostile takeover in past decades, both from outside businesses and from drug traffickers.
Grupo Sura is a particularly notable holding entity with major influence in Medellín. You can see in the below map that it is closely interconnected with the country’s largest bank Bancolombia, as well as Nutresa and Argos, with joint ownership in many businesses (the bulk of which aren’t shown on this map).
Looking at the next map (below), you’ll also note that Grupo Sura made significant investments in the Medellín-based startup funds of Velum Ventures and Promotora VC. While Velum seems to have a smaller roster of limited partners (IADB’s FOMIN and RutaN), Promotora and its Progresa Capital Fund have a pretty wide roster of LPs: from Argos, Sura and Bancolombia, to Grupo Éxito, Bancóldex (the federal government bank based in Bogotá), Grupo Orbis and as well as some Bucaramanga-based public investment entities.
Moving onto Grupo Éxito (below), this is the retailing giant of South America. They’re perhaps best known for managing Almacenes, but they control a variety of other supermarkets, ‘hypermercados’, and discount retailers across the country and Latin America. Our research from 2014 suggested that Grupo Éxito was not actively involved in the startup investing community at that time. They had a minor stake in Promotora VC, and beyond that appeared to have limited involvement. We think that’s a prime opportunity not only for Grupo Éxito, but also for raising funds and accelerators as well as entities like CircleUp — an online investment platform that specializes in consumer-packaged goods and could benefit from a major Latin American retailing partner.
We’ll conclude our Medellín discussion with a brief mention of EPM (below), the Medellín public utilities and telecommunications agency. EPM is a major influencer in the city’s startup community. They are significant underwriters / investors in RutaN (a startup support organization) and FCP Innovación (venture fund). EPM also has a significant minority interest in the Bogotá-based telecoms entity Tigo (majority owned by Stockholm-based Millicom) — one of Colombia’s big 3 telecoms companies. As a global brand, Tigo is increasingly involved with startup support and incubation.
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Note: Research, maps and data are from early 2014 and have not been updated. This post reflects a component of our understanding of the Medellín business environment at that point in time. We are making this research available to the public in hope that it proves valuable to others.