Why Latin American venture capital is breaking records this year – TechCrunch

Today we are wrapping our multi-week exploration of the second quarter performance of the global venture capital market. We have gone around the world, working to better understand the geyser of cash flowing into today’s startups. But we have saved the best for last: Latin America.

At a glance, the Latin American venture capital and startup market looks similar to what we have seen in other growing ecosystems. As the U.S, Canadian, European, Indian Y African startup centers, Latin America is watching venture capital activity set records.

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But within the large numbers is a striking picture of a maturing startup market, while outside money looks for breakout opportunities.

To aid us in our exploration of Latin America’s epic second quarter, we collected notes and observations from NXTP’s Gonzalo Costa, Magma Partners’ Nathan Lustig, and ALLVP’s Federico Antoni. We also have data from Dealroom, CB Insights, Global Private Capital Association (GPCA), and ALLVP.

Today we are investigating the data, yes, but also the human potential behind the startup fever. According to Antoni, today’s Latin American startup market “is a story about talent, not capital.” Echoing the point in a recent piece On “the startup opportunity in Latin America,” US venture capital firm Sequoia wrote that it “has been impressed by the quality of the founders in the current wave.” So we will have to do more than read graphs.

The marriage of talent and money is what emerging markets need to prosper. But there are other reasons why Latin American startups are so frequently in the news today, including structural factors such as strong digital penetration Y rapid growth of e-commerce.

Those trends could have a long life. NXTP’s Costa made a bullish argument: The “market cap share of tech companies in Latin America is just 2.5% today compared to 40% + in the US,” and his firm expects the two figures to “Converge in the long term. “Our reading of that set of data points is that there are a lot of future Latin American public technology companies that are being founded and funded today.

Let’s talk about venture capital data from Latin America, investigate which countries are rising stars in the region, learn how fast Latin American startups have to cross the border, and explore how quickly capital is recycled in the ecosystem, always a key test for startups. -Longevity of the market.

A wave of venture capital

Latin America is on track to hit record highs in venture capital dollars raised and venture capital rounds in 2021. According to to CB Insights data, startups in the region have already raised $ 9.3 billion in the first six months of 2021 from 414 deals. The same data set indicates that in all of 2020, startups in the region raised $ 5.3 billion in 526 deals. And in case you are concerned that we are comparing ourselves to a year unfairly affected by COVID, in 2019 the figures were $ 5.3 billion (again) from 614 individual deals.

This year is different and the second quarter of 2021 was simply an outlier. With some $ 7.2 billion invested in Latin American startups, the second quarter 2021’s closest rival in terms of quarterly risk totals was the second quarter of 2017, when $ 2.6 billion was invested.


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