LatAm startups raise only $406M in the first quarter of 2023

Latin American companies only raised US$406 million in the first quarter of 2023, according to the Venture Capital and Growth Equity Ecosystem 2023 study. This is one of the periods with the lowest activity for capital funds in the last five years.

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The study conducted by Endeavor and Glisco Partners also revealed that the number of investments is 40% above the first quarter of 2021. This means that there is a slow recovery for the ecosystem.

Venture Capital and Growth Equity Ecosystem 2023

Some of the most important highlights of the study to take into account as venture investors are:

1. “The first quarter of 2023 had a total of 178 capital rounds, being 27% less than Q1 2022. The global decrease was 36%”.
2. “There is still no defined trend in Latin America since the total investments of the first quarter of this year represent 40% of the total investments of the first quarter of 2021. This reinforces that investments are characterized by being in earlier stages and having smaller amounts”.
3. “This observed trend in investments suggests that 2023 will be the second consecutive year with greater capital investment and a larger number of early-stage rounds. In Q1 2023 these types of rounds represent 81% of the total. On the other hand, Late Stage rounds (Series D+) had a decrease of 92% compared to Q1 2022“.
4. “Regional funds have been given a larger presence in Latin American investments, representing 73% of the investments. However, 100% of these investments are in early stages”.
5. “The industry with the most investment is FinTech, however, it has had a decrease in investments of 52% compared to the quarter of the previous year. Industries such as HR Tech, IT and Gaming had a growth of 100%“.

Venture Capital and Growth Equity Ecosystem 2023

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How does this affect the Latin American VC ecosystem?

• A trend towards investments in early stages and an increasingly greater presence of regional funds is observed. This plays both for and against, as, according to the study, the 92% decrease in late-stage financing rounds (Series D+) would be an indicator that startups may not be able to move to an advanced growth phase.
• There is diversification in the sectors that are attracting more investments: HR Tech, IT and Gaming.

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For detailed information, visit: Endeavor