This was stated by Gabriela Ruggeri, managing partner of the Kamay Ventures corporate investment fund, at MITA GDS at the MITA GDS event.
Venture capital investment has quadrupled since 2016 in Latin America and the Caribbean (LAC); last year 7 unicorns were created in the region, distributed in Argentina, Brazil, Colombia and Mexico; and in the last 45 days, a round of investments in the order of 1,000 million dollars have been announced in Brazil.
With these data, the Made in the Americas Global Digital Services Summit (MITA GDS) event was the scenario chosen to talk about the time that venture capital investments are going through in Latin America.
While the numbers for the entrepreneurial ecosystem are encouraging and it is anticipated that it is on the right track, experts pointed out that it cannot be said that the sector reached a “point of success”, nor should it be compared with the capital market that exists in the United States.
It’s all about expansion
“We have to think differently, consider the expansion to other places. That is a more interesting strategy because there are a lot of countries with billions of inhabitants to transform, that need to be taken care of and where we can do much more because it will allow us to learn from our own imperfections”, reflected Gabriela Ruggeri, managing partner of the Kamay Ventures corporate investment fund.
Faced with the uncertainty about where the sector currently stands, Ruggeri said: “Latin America is not Silicon Valley, but we will see an interesting region for business development that can transform people’s lives. Both Venture Capital as Corporate Venture Capital will be an interesting portion of the funding ecosystem for entrepreneurship and innovation in the region”.
The panel on “What drives venture capital investments in LAC?” He made it clear that the sector is moving forward as corporations understood that startups are a good solution to include innovation.
Who is growing?
In this line, Ruggeri emphasized that proof of the growth that the sector is having is reflected in the degree of involvement that Coca-Cola of Argentina and Arcor are having as Kamay Ventures investors, something that eight years ago was unthinkable. “Both the entrepreneurial system and the Latin American investor are maturing,” he said.
The fund is also managed independently by Overboost, recognized accelerator and company building, and is open, which means that other corporations can join in search of innovative solutions. “We are also working on the training of mentors and the internal areas of companies so that they know how to work with entrepreneurs and that entrepreneurs do not die trying”, he said.
When analyzing the critical points of the industry, Ruggeri reflected that the lack of more foreign funds in the region is mainly due to the fact that Latin American infrastructure has yet to be worked to be an attractive territory to invest. “If an investor is going to invest in a Venture Capital, which in itself usually has negative returns globally, we want the risk to be in the business, in operations and in the disruptive, and not in other variables”, concluded.
What about Softbank?
Another issue that led the debate was the announcement of a new fund for Latin America by Softbank. While the idea that one of the most important players in the world comes to the region with a check of 5 billion dollars can generate some concern about the possibility of generating inflation or devaluation in some markets, or the strategic role that will occupy, experts agreed that his arrival is very good publicity for Latin America. “It is positive that a fund has interest, considering that the level of annual investments in the region was around 1800 million dollars, so allocating 5,000 million is definitely a statement”, Ruggeri said.
He also noted that the fact that Corporate Venture Capital has surpassed the amount invested in Venture Capital last year in the world is also setting a trend. “They are good signs”, he insisted.
Also published on Medium.