Venture capital in Latin America - statistics & facts
Venture capital (VC) can be defined as the financial resources provided by investors to fund startups and small businesses that show potential for long-term growth. It has become a very important source of capital for entrepreneurs, who often have problems with financing their business projects through risk-averse banks. Venture capital investments incorporate a high level of risk as only a small portion of the companies invested in are able to develop into successful and high-return businesses.
Increasing interest in the Latin American startup ecosystem
The Americas represent around half of the global venture capital market. Therefore, it comes as no surprise that the world of VC and high-risk investments has set its eyes on Latin America. In fact, venture capital investments in Latin America have skyrocketed in the last decade, especially in 2019. In that year, investment in startups were estimated at 4.6 billion U.S. dollars, 300 percent more than in 2017, when it stood at just 1.1 billion dollars.
Leading sectors
Fintech and logistics and distribution are the sectors with the largest amount of VC investment deals in the region. In 2019, they accounted for more than half of the transactions closed in Latin America. Following this trend, the largest funding amount by venture capital firms in Latin America was awarded to the Colombian startup behind the delivery app Rappi, at a whopping 1.5 billion U.S. dollars. The Brazilian-challenger bank Nubank and the Argentinian financial management app Ualá were also among the startups that received the highest value of investments.
Brazil: indisputable leader
Regarding the distribution of investments by country, Brazil was the market that received most of the VC investments, accounting for more than half of all VC deals in the region. Mexico came in second with over 22 percent, funds which were mostly allocated in the consumer services sector. Other countries with significant shares of VC investments were Argentina, Chile and Colombia.
Increasing interest in the Latin American startup ecosystem
The Americas represent around half of the global venture capital market. Therefore, it comes as no surprise that the world of VC and high-risk investments has set its eyes on Latin America. In fact, venture capital investments in Latin America have skyrocketed in the last decade, especially in 2019. In that year, investment in startups were estimated at 4.6 billion U.S. dollars, 300 percent more than in 2017, when it stood at just 1.1 billion dollars.
Leading sectors
Fintech and logistics and distribution are the sectors with the largest amount of VC investment deals in the region. In 2019, they accounted for more than half of the transactions closed in Latin America. Following this trend, the largest funding amount by venture capital firms in Latin America was awarded to the Colombian startup behind the delivery app Rappi, at a whopping 1.5 billion U.S. dollars. The Brazilian-challenger bank Nubank and the Argentinian financial management app Ualá were also among the startups that received the highest value of investments.
Brazil: indisputable leader
Regarding the distribution of investments by country, Brazil was the market that received most of the VC investments, accounting for more than half of all VC deals in the region. Mexico came in second with over 22 percent, funds which were mostly allocated in the consumer services sector. Other countries with significant shares of VC investments were Argentina, Chile and Colombia.
