In Mexico, the launch of Paradox Ventures, the first private investment fund dedicated to fintech companies with a conscious focus, was announced and promoted.
This private equity fund begins its operations with an initial investment of USD$2.5 million with the aim of supporting 30 companies in the fintech and blockchain sectors.
These startups are dedicated to eliminating the barriers that affect social and economic growth in Latin America, as the firm stated in a press release.
“It’s time to truly be disruptive, not just attempt to create financial technology ventures; we need to support ideas that are already in the market or emerging, and that seek sustainable development</strong,” explained Carlos Valderrama, founding partner of Legal Paradox, a firm specialized in Fintech and Blockchain.
This initiative by Valderrama arises in the midst of a significant decrease in investments. According to Endeavor data, in the first quarter of 2023, private capital investment in Latin America experienced a significant drop.
During that period, companies in the region managed to raise only USD$406 million, marking the fourth quarter with the lowest activity in the ecosystem since 2017.
This figure represents an 88% decrease compared to the USD$3,382 million invested in the first quarter of 2022 and a 72.6% reduction compared to the USD$1,481 million raised in the same period of 2021.
“Paradox Ventures is initially here to address the regulatory challenges that fintech or blockchain companies may face, as regulation is among the top four major challenges for financial technology companies,” stated Carlos Valderrama.
Endeavor also reported that, as a result of this scenario, 194 companies ceased operations in 2022, and between 2014 and 2022, the number of startups that closed increased 5.4 times.
Armando Betancourt, former Head of Partnerships LATAM at Google Pay and now Strategic Venture Partner at Paradox Ventures, emphasized that this fund represents a new model characterized by its social, sustainable focus, and support from advanced technologies like blockchain and artificial intelligence.
“Paradox Ventures is not just a fund; it’s the first conscious, decentralized, and autonomous private equity fund in the world.
“The first legal DAO in Latin America and a DAO that also becomes the first in the world to be a shareholder of a regulated financial entity,” the company highlighted.