The Venture Capital scene in Latin America has quickly evolved. While the funds fell from a record amount of 2021, investments remain strong, reaching $ 4.2 billion in 2024 – by 27% compared to the previous yr.
In the case of founders, this implies puberty. However, they may need intelligent strategies to effectively secure financing and scaling.
Here’s what the VC market shapes, The Hurdles Founders and how to win in this space.
What does the VC market shape?
Digitization has accelerated massively throughout the world inside five years of Pandemia. In Latin America, FinTech, in particular, recorded a clear growth.
A big independent population in the region and economy depending on money allowed for great opportunities for fintech solutions when physical banking became difficult. FINTECH NUMBER The startups doubled In the years 2018–2021 and attracted a record VC investment price over $ 6 billion in 2021.
When AI gained significant adhesion in 2023, the funds increased. In 2024, AI was included 34% the total investment round in Latam, becoming a leading sector.
Other aspects also achieved the VC market in Latin America, including gradual separation between the USA and China. Thanks to similar time zones, shorter supply chains and reduced logistics complexity, Latin America offers an “close” advantage that US investors are looking for. This confirms why the US remained the largest investor in the region, contributing 33% I fly the total investment in 2023.
Spain also shows dedicated interest, financing 11% of the total investment initiative and promotion corresponding to Icex-Invest in Spain and IDB Lab. The goal is to strengthen the connection between entrepreneurship ecosystems in Latin America and the Caribbean with Spain as a gate.
Key barriers to VC financing for startups Fly
Latin America is a collection of separate countries with significant regulatory, operational and cultural differences, increasing scaling and attraction of investments.
Unlike the US, in which the company can include in one condition and operate throughout the country, the startup in Latam, which wants to develop, faces many incorporation processes in other Latin American countries.
For example, in Brazil, an immediate payment system Casket represented 29% Transfers in the country in 2022, which makes it an indispensable tool for domestic and foreign startups. However, users needed Brazilian bank accounts and were registered as legal entities to use low transaction fees.
Regulations regarding employment specific to the country and various tax reporting requirements moreover complicate the expansion. In Mexico, use Digital fiscal proof of the Internetor CFDI, the tax compliance system is mandatory. For foreign corporations, compliance with CFDI could also be a costly technical barrier, but cooperation with local entities will help.
How to secure strategic partnerships
The divided problem is the problem by half – in which startup accelerators include.
One of the best accelerators in the region, 500 startups I flyoffers founders $ 300,000 for 10% of shares in the startup. Meanwhile, Plantan Ventures It offers $ 200,000 for 5.5%. A positive indicator ensures that the startups have enough capital to maintain a solid capital structure at the same time, maintaining attractive future financing rounds.
Startups looking for an American investment should create Delaware C-Corporation or similar existence. This allows them to access the world’s largest Venture Capital ecosystem, receive investments in USD, avoid problems of currency variability and creating a simpler output path by the takeover of the US or IPO.
VC financing is a game of relationships, so participation in network events corresponding to Annual peak VC Latam 2025 AND Mexico Tech WeekThey are also useful access points to the meeting of accelerators and investors of every size and creating significant connections. Strategic networks also provide key information on the priorities and expectations of investors, helping startups to create materials at height that, as they know, resonate with financial decision -makers.
A frequent mistake of entrepreneurs must avoid financing too early. The company must first prove its thesis and build a real product/service by charging. Ultimately, this is evidence and data that can help attract investors.
The history of increased risk capital in Latin America is not one of the potentials – it is implemented. Because global investors still direct capital to this region, and local ecosystems develop more financing and support opportunities, the next generation of Latin American Unicorn is probably already formed.