Latin America appears is set to record another quarter of the fall in venture activity, adding to a series of consecutive periods when the value of investments in the region fell.
Relying on Pitchbook data and looking at venture capital firms in Central and South America, TechCrunch’s analysis suggests that investment in deals and in dollar terms should decline in the second quarter of 2022. With a few weeks left for data collection as June continues, the picture may change. shift, but it would take an incredible slew of closed deals to stem the already regular decline in venture capital investment in Latin America.
This does not mean that there are no more transactions; they are. And the decline in interest in venture capital does not mean that Latin America’s promises to become a start-up hub have not materialized; huge companies have been scaled up there and listed on the stock exchange. And we are not working today to imply that any particular region will not prove to be a hotbed of start-up activity and technological innovation in general over time. Instead, we just look at the latest ticks in the feed to see where investment is going – and slowing down – today.
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Signs of softening in the Latin American startup market abound. Not just in aggregated datasets, which we’ll get to in a minute. Even in the more impressive recent rounds, there is some softness in the region. For example, Ecuadorian fintech company Kushki recently raised called an extension of its B series. Naturally, it’s a little tricky to call the $100 million round an early-stage renewal, but in the old days, we suspect the funding event would have been a natural Series C with new entrants, rather than a Series C from regular investors with the “Series B Extension” label affixed. above.
Following the publication of quarters of falling venture capital investment, Latin America has turned the corner and is now on a downward trend in venture capital activity in the second quarter of 2022 on a quarterly and yearly basis. The amendment has arrived in the region.
For reference, we recall that throughout the world during the first quarter, global venture activity increased compared to last year. We have yet to analyze the overall market data for the part of the second quarter we have already consumed, but if Latin America is the leading indicator, the signs are not encouraging.
Let’s dive into the early data and then discuss the halo effect – or lack thereof – of Latin American giants like Nubank, as well as some of the regional issues that could make it harder for regional startups to access venture capital.
Venture capital adjustment in Latin America
Let’s start with the caveats. We are working with an early dataset, which means we don’t see the full picture. Instead, we are looking for directional trends to better understand Latin America without getting too hung up on specific data points. The data will change.
Credit: techcrunch.com /