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Complete Guide on Venture Capital in Latin America (main actors by country and reports on the state)

In this article, we will show the current landscape of the venture capital industry in LATAM with the main actors of the countries where the entrepreneurship hubs of the region are located. We hope you find it useful 😉

According to the latest report on the state of the Venture Capital (Venture Capital) industry conducted by LAVCA’s (Latin American Private Equity and Venture Capital Association), Latin American startups received a total of USD $ 500M in 2016, and only in the first months of 2017, a total of USD $ 477M.

It is a fact that Latin America is experiencing substantial growth in relation to venture capital activity. One example is that the Series C investment rounds reached a total of USD $ 314M in the first half of 2017, compared to the USD $ 208M raised in 2016.

In addition, investments in 99, the largest shared-travel service in Brazil, by Didi, China’s largest travel-sharing company, represented two of the three largest investment rounds in Latin American history.

The report also revealed that 93% of the investment received by startups in LATAM from the VCs (Venture Capital Funds) this year went to the IT sector (Information Technology). This is almost triple the amount invested in fiscal year 2016, through the same number of deals (negotiations).

Image of: LAVCA

On the other hand, it is clear that large investments are starting to become more popular in Latin America. The position of VCs is changing positively, with most of them planning to maintain their investments in the region for the next three years or more, including many of the new entrants in the market.

Just two years ago, most of the US VCs UU and China avoided Latin American Startups, except for a few select ones in Brazil. However, this year marked a turning point with Andreessen Horowitz, Redpoint, Accel and other top tier VCs making significant investments in Latin America, as well as with Didi investing 99 from Brazil.

Reviewing the considerable growth of the Latin American ecosystem during the past year, it is important to highlight some of the main actors in the region.

Below is an overview of the organizations that are driving the growth of venture capital in Latin America, accelerators and resources in each country.

Argentina

Kaszek Ventures – This Latin American venture capital firm focuses on high impact technology companies in Brazil and throughout the region that wish to operate in Latin American markets. The managers of the fund have their origin in MercadoLibre, one of the unicorns of Latin America that was founded in Argentina. Kaszek provides not only capital, but also practical mentoring, networking, product development, team-building and a large amount of resources to help entrepreneurs develop viable businesses. So far in its three rounds of funding, Kaszek has supported the growth of 43 companies in the Southern Cone region. Its third and largest fund reached USD $ 200M this year to help Latin American entrepreneurs build high-level businesses.

Patagonia Ventures – This private investment fund based in Buenos Aires focuses on Latin American online businesses with high potential. The firm has already had eight exits (acquisitions) of 21 investments. The team focuses on active and global investments that unite investors and entrepreneurs to develop innovative ideas.

NXTP Labs – It is one of the most active funds in Latin America, with operations in Argentina, Chile, Colombia, Mexico and Uruguay. The firm has supported many of the best startups and acquisitions in the region, including Fundacity, Aventones, Sparkflow, Cookapp, ComentaTV, WeHostels and more. The MIF (Multilateral Investment Fund) is the first investor in the new NXTP Labs impact investment fund that will provide seed capital to approximately 32 companies. NXTP Labs also offers special programs for agtech (Technology in Agriculture) and fintech (Technology in the Financial Industry) companies in Latin America.

Incubate – It is a new incubation program open to national and international entrepreneurs with high impact ideas. They offer mentor networking and elite connections. The startups chosen to participate will also receive USD $ 30K, equity-free (without participation in the company) and space in their offices.

Draper Cygnus – It is a Sillicon Valley venture capital fund for Argentina focused on supporting entrepreneurs whose technology and business models have the potential to make massive social changes. Its focus is on fintech, agtech, cleantech and nanotech and so far they have promoted 28 Argentine companies with more than USD $ 105M in investments.

Other notable venture capital firms in Argentina include CAP Ventures, Quasar Ventures, Pymar Fund, Cygnus Ventures, Enzyme Venture Capital, South Ventures, Alaya Partners, Victoria Capital Partners, Jaguar Ventures, Wayra, and Incutex. Click here to review the complete guide on venture capital in Argentina.

Brazil

Monashees + – It is a global venture capital firm based in São Paulo that invests in innovative entrepreneurs at an early stage. His portfolio includes companies focused on improving life through technology such as 99, Rappi, VivaReal and Petlove.

Valor Capital Group – Focuses on cross-border opportunities between Brazil and the United States and has offices in New York, Menlo Park and Rio de Janeiro. They look for companies in the United States, both early and advanced, or international technology companies that want to expand to Brazil, as well as companies of the same type that originate in this country.

The Valor Capital Group startups solve problems facing the middle class, especially in the education, finance and health sectors.

Redpoint eVentures – It is an early stage venture capital fund located in São Paulo, Brazil. The firm is an ally of Redpoint Ventures and e.ventures in Sillicon Valley and promotes a portfolio of more than 15 companies, including big names such as Rappi and Gympass.

ACE – It is the biggest player among the accelerators in Brazil, investing more than $ 500K of reals in startups every year. Formerly known as Aceleratech, ACE is among the best funds in Latin America, supporting more than 130 startups during its operation. It was voted three times as the best accelerator in Latin America.

In Brazil, other major venture capital firms include riatec Fund, SP Ventures, Instituto Inovacao, Ideiasnet S.A., Confrapar, Astella Investimentos, Warehouse Investimentos, W7 Venture Capital, and DGF Investimentos. Click on this link to know the mapping of venture capital firms in Brazil.

Chile

Magma Partners – It is the only 100% private fund in Chile. It invests in companies at an early stage and prefers to be the first investor to enter startups. Your first investments are in the range of US $ 25- $ 75K and can continue up to US $ 250K per company. They are focused on supporting the best entrepreneurs in Latin America who want to launch and scale in the United States and those developing in the fintech and insurance tech (technology and security) industries in Latin America. Since 2014 they have invested in 32 companies with founders from 10 different countries. They have offices in Chile, Colombia, Mexico, the US and China.

Mountain Nazca – In 2015 Nazca was acquired by Mountain Partners, a successful Swiss-German venture capital fund. The company invests USD $ 200- $ 500K in companies that can scale regionally and potentially expand to other Mountain offices in Europe, Asia and Africa. Nazca has offices in Argentina, Chile, Brazil, Colombia and Mexico in Latin America.

Start-Up Chile – It is the flagship program of CORFO and the government of Chile. They have financed more than 1,300 Chilean and foreign companies since 2010 with their Seed programs, which deliver CLP $ 20M (USD $ 30K) equity-free grants (free of shares in the company). In 2015, Start-Up Chile added the Scale program, which delivers CLP $ 60M (USD $ 90K) equity-free, as well as S-Factory, a pre-accelerator of CLP $ 10M (USD $ 15K) program for women entrepreneurs.

Other investment funds in Chile include NXTP Labs, Chile Ventures, FEN Ventures, Endurance Ventures, Manutara Ventures, Scale Capital, and Aurus. Click here to see the general mapping of venture capital in Chile.

Colombia

Firstrock Capital – Firstrock Capital (formerly Social Atom Ventures) is an investment fund of USD $ 30M with offices in Medellín and Bogotá. The firm specializes in connecting the technological talent of Latin America with American startups that need technical support. They invest mainly in early stage companies that have technology teams in Latin America, but whose target market is the United States. Magma Partners has co-invested twice with Firstrock Capital.

FCP Innovation – It is a USD $ 40M capital fund that is 100% backed by Empresas Públicas de Medellín, the public services company of Medellín. Its investments are mainly focused on the management of natural resources, such as oil, water, natural gas and innovations in waste management. Currently, they have seven active investments in five Latin American countries.

Other risk capital options in Colombia include Torrenegra Labs, Axon, Velum Ventures, and more. Click here to see the general mapping of venture capital in Colombia.

Mexico

500 Startups: Latam – It is an accelerator based in Mexico City and the most active fund in this country. They have invested in more than 1,800 companies since its inception and have some very successful companies in their portfolio. 500 Startups: Latam is part of a group of US funds and accelerators that invest in the Mexican market. Famous graduates of 500 Startups: Latam include Konfio, Clip and CinePapaya.

Hackers and Founders – Hackers and Founders is a US based company. UU that helps accelerate startups and helps them get investment in that country. They have an office in Guadalajara and have helped at least 20 companies in Mexico so far. Hackers and Founders charges equity for their services and creates a common fund so that the 20 companies in a round receive capital from each other. So far, they have more than 200,000 entrepreneurs as members in 47 countries and a portfolio valued at USD $ 400M.

Avalancha Ventures – It is an early stage investment fund that invests above USD $ 50K in the first rounds, with possible follow-up to USD $ 2M. The fund invests in Mexican companies and is valued at USD $ 15M.

In Mexico there are many other venture capital funds, including Jaguar Ventures, Variv Capital, Alta Ventures, Mita Ventures, Angel Ventures Mexico, Investo VC, among others. Click here to see the full mapping of venture capital in Mexico.

Peru

Endeavor – It is a global organization that promotes high impact entrepreneurs in more than 25 countries in the world. The organization arrived in Peru in 2014 and became an ecosystem leader, supporting more than two dozen entrepreneurs representing 14 companies.

Angel Ventures – It is a venture capital investment fund with a local presence in Peru through the Angel Ventures Peru office.

Startup Peru – Startup Peru is a program of the Ministry of Production based on the Start-Up Chile model. It has financed more than 150 Startups with its equity free program and finances up to 24 projects at the same time, depending on the stage the company is in.

UTEC Ventures – It is a Peruvian accelerator linked to the UTEC, a local engineering university. UTEC generally takes 5% to 10% equity in exchange for $ 15k in seed capital and other additional services. It has quickly become a major player in the local ecosystem, and many of its companies receive follow-up funds.

In Peru, other venture capital firms include Wayra, EmprendeUP, and Fledge. Click here to see the full picture of venture capital in Peru.

US Signatures UU investing in Latin America

LatinSF – It is a new economic development initiative that promotes business and commerce between San Francisco and the Latin American region. This initiative comes from a public-private partnership between the Mayor’s Office of Economic and Workforce Development (OEWD) and the San Francisco Center for Economic Development (SFCED) with the objective of creating a welcoming environment for companies established in Latin America to expand and for that startups move to San Francisco.

LEAP Global Partners – It is a venture capital investment fund focused on training and empowering Latin American entrepreneurs who are impacting on finance, health, education, collaborative economy or mass media. They have around USD $ 15M in available funds and have invested in three companies in Latin America.

LATAM Fund – It is considered the first venture capital investment fund born in Sillicon Valley with focus in Latin America. They provide mentoring and seed capital for technology-based companies in the region that are focused on the Hispanic market in the US. UU Its ZFunction and ZReady programs accept from eight to ten startups per program with two versions per year. They also invest without asking for participation in the company.

Babel Ventures – It is a venture capital firm located in Sillicon Valley of USD $ 30M to accelerate businesses of Latin Americans in the United States and Mexico. Its founders, Barbara Kunde Minuzzi and Daniela Arruda, are both from Brazil and previously raised investments for real estate and technology funds.


Also published on Medium.

Published inStartups

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