Rockstart to invest US$6 million in early-stage LatAm startups

For this call, 10 startups will be selected to receive US$10,000, including the value of the program, in exchange for a 6% equity stake in each company.
Rockstart-Fund-Acelerator-LatAm
Rockstart-Fund-Acelerator-LatAm

Rockstart, a European accelerator with headquarters in Colombia, announced that it will invest US$6 million in 30 early-stage companies in Latin America over the next three years through its acceleration program.

At the moment, the call is open for the first 10 startups, which will receive US$10,000 in exchange for 6% equity for Rockstar.

In a press release, the accelerator stated:

“The differentiating factor of this program is that it is 100% personalized and designed specifically to meet the unique needs of each selected startup. Therefore, Rockstart only takes in 10 companies per year and provides them with a tailor-made mentoring program and support for both their business challenges and the personal challenges of each founder.”

Rockstart assured that 80% of the startups that have gone through this program have successfully raised capital after their participation and have grown three times their original size.

Likewise, the accelerator offers entrepreneurs a share repurchase guarantee, meaning those who are not satisfied with the program can terminate the initial contract. Due to conditions like this, the program receives up to 2,300 applications from entrepreneurs across the region.

Once selected, the startups will receive “lifelong” support from the accelerator, with access to events such as the International Investor Summit, soft landing programs in other countries, and mentorship from prominent founders in Latin America, such as Simón Borrero from Rappi, Jose Velez from Bold, Jose Calderon from Robinfood, Jose Bonilla from Chipper, and many other ecosystem leaders.

Rockstart is an early-stage investor that empowers founders specializing in the energy, agri-food, and emerging technologies sectors. It was founded in the Netherlands in 2011 and arrived in Bogotá seven years ago. So far, the accelerator has invested US$4 million in 51 companies.

The Rockstar program comes at a time when, according to a study conducted by Endeavor and Glisco Partners, Latin American startups raised only US$406 million in the first quarter of 2023, 40% higher than the first quarter of 2021, indicating recovery but a slowdown compared to previous years.

Endeavor StudyEndeavor Study

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Endeavor Study

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Relationship between deployed capital & interest rates. (Source: Endeavor & Glasico Partner)

While an analysis by Crunchbase highlights that funding for early-stage startups decreased during the first quarter of this year. “Approximately a couple of hundred million dollars were allocated to early-stage deals, down from US$1.5 billion in the same quarter of the previous year,” the report states.

You may also be interested in reading: Obstacles to Raise Capital in 2023 — According to LATAM Entrepreneurs

Latin America Venture Dollar Volume Q2 2023LATAM Venture Capital Dollar Volume Trough Q2 2023

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LATAM Venture Capital Dollar Volume Q2 2023

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LATAM Venture Capital Dollar Volume Q2 2023

You may also be interested in reading: Obstacles to Raise Capital in 2023 — According to LATAM Entrepreneurs

Why is it relevant for investment funds in the region?

  • The complexity of the financing situation for startups in Latin America presents a challenging landscape for investors. However, there are sectors, such as technology (especially fintech), showing steady growth, if not accelerated.
  • The commitment of a company like Rockstart to an emerging market speaks of recovery and a strong bet on startups in the region.
  • Rockstart has the endorsement that the 51 companies it has invested in have managed to scale. The new startups it will support through its program may represent an interesting opportunity for other investors.

Why is it relevant for early-stage startups in the region?

  • Rockstart not only has a solid portfolio of startups, but its community is also built with recognized entrepreneurs, mentors, investors, and stakeholders to support companies in their growth.
  • The equity back opportunity not only serves as a program guarantee but also offers the possibility of terminating the initial contract.

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With information from: Forbes

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