Funding for Latin American startups appears to have stabilized in recent quarters. However, the level of investment stays much lower than the record level from a few years ago.
These general conclusions emerge from Crunchbase’s third-quarter survey of corporate financing in South and Central America. Funding has remained regular or increased at various stages, with a few large rounds in the mix.
In total, we have raised $884 million in growth-stage investments in the region. This represents an increase of roughly 14% in comparison with the previous quarter and year-ago level. However, this is still lower than a quarter of what firms secured in their peak quarter in early 2022.
For comparison, we have plotted the total investment amount, color-coded by stage, for the last 14 quarters.
The variety of rounds decreased in seed and early-stage deals but increased in late-stage deals. (Over time, we expect the variety of initial transactions to extend as transactions are later entered into the Crunchbase database.)
To get a broader picture, we have broken down the deal numbers for the last 14 quarters below.
Contents
Fintech is still huge, but barely less dominant
As usual, fintech and its adjoining startups have raised many of the largest rounds. However, we have also seen strong investment in other sectors, including B2B commerce and digital health. To illustrate this, we have put together list of the eleven largest transactions of the quarter.
The largest financing went to a company based in Mexico Historyprovider of bank cards and online financial services, which raised $212 million in August in a financing comprised of roughly half debt and half equity. In the latest round, the five-year-old unicorn plans to do just that increase to Colombia.
Another Mexican company, OCNor One Car Now secured $86 million in a July round of debt and equity to expand its business to supply flexible automotive rentals aimed at gig staff.
Meanwhile from São Paulo, Brazil Cayennean online ordering platform for restaurants and other food suppliers, secured a $55 million Series B round in September.
On the fintech front, a Colombian payment platform Copper scored $35 million in Series B financing. And one of the most famous Brazilian unicorns, an online banking platform Neontook home $26 million investment hosted by Microsoftenterprise fund, M12.
Movement in a positive direction
Overall, startup investment didn’t show much growth in the third quarter. However, it was barely higher than Q2, which itself was barely higher than Q1. So things are at least moving in a positive direction.
Looking ahead, it seems likely that the momentum will proceed given the large variety of growth firms and the capital reserves of investors who have waited out the period in 2023 and earlier this yr.
Methodology
The data in this report comes directly from Crunchbase and is based on reported data. The data provided is as of October 2, 2024.
Please note that data transfer delays are most noticeable in the earliest stages of a enterprise, with seed funding amounts increasing significantly after the end of the quarter/yr.
Please note that each one financing amounts are in US dollars unless otherwise noted. Crunchbase converts foreign currency to U.S. dollars at the spot rate in effect on the date financing rounds, acquisitions, IPOs and other financial events are reported. Even if these events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historical spot price.
Glossary of financing terms
Effective January 2023, we have modified the way we include corporate financing rounds in our reporting. Corporate rounds are only included if the company has raised seed financing as a part of a series financing round.
Seeds and Angels consist of seed, pre-seed and angel rounds. Crunchbase also covers enterprise rounds of unknown series, equity crowdfunding, and convertible notes valued at $3 million (USD or converted USD equivalent) or less.
The early stage consists of Series A and Series B rounds, in addition to other forms of rounds. Crunchbase includes enterprise rounds of unknown series, corporate ventures and other rounds above $3 million and those valued at lower than or equal to $15 million.
The Late Stage consists of Series C, Series D, Series E, and later lettered expedition rounds following the “Series [Letter]“Naming convention. Also included are enterprise rounds of unknown series, corporate ventures and other rounds valued at greater than $15 million.
A technology development is a private equity round led by a company that has previously raised a “venture” round. (Basically any round from the pre-defined stages.)