Latin American Startups Face Significant Funding Decline In 2023
In 2023, Latin American startups faced a substantial financial downturn, securing only $3.1 billion in venture capital, a sharp contrast to the previous years. This figure marks a significant 60.4% reduction from 2022’s investments and an 81.7% decrease from 2021’s record $17.1 billion.
Distrito, a Brazilian market analysis firm, highlighted this dramatic fall, underscoring 2023 as a challenging year for the venture capital market in Latin America. The number of funding rounds plummeted to 746, the lowest since 2017, marking a 48.6% drop from 2022. Despite these setbacks, 2024 has been ushered in with a more optimistic outlook, with Distrito’s CEO Gustavo Gierun acknowledging potential emerging opportunities.
In Brazil, the scenario was particularly stark. The country, which hosted approximately 61% of all Latin American funding rounds in 2023, saw a 56.8% decline in venture capital for its startups compared to 2022. However, Brazilian fintechs like QI Tech and Nomad stood out, securing $200 million and $61 million in funding, respectively, in 2023.
Despite the decline in investment, Brazil remains the country in Latin America with the most unicorn startups.
