LAVCA, the Association for Private Capital Investment in Latin America, has found that startups in Latin America have raised $2.8billion across 190 transactions during Q1 of 2022 as the region’s funding boom continues.
This marked the fourth largest quarter on record for investment in the region, the data showed, and represented a 67 per cent increase compared to the $1.7billion raised in the first quarter of 2021. It was also up 375 per cent versus the $582million raised in the first quarter of 2020.
Notably, fintech startups were by far the largest recipients of venture capital funding in the 2022 first quarter, with 43 per cent of dollars raised — or $1.2billion – having flowed into the category. That’s up from 16 per cent in the first quarter of 2021. Meanwhile, investments into fintechs made up 30 per cent of all deals in the second quarter, compared to 25 per cent in Q1 2021.
Carlos Ramos de la Vega, director of venture capital of LAVCA, told TechCrunch: “We have continued to see the cross-pollination of business models within the sector: Payment platforms are increasingly incorporating BNPL alternatives, lending platforms have become full-service digital banks, challenger banks have expanded their product suite to include embedded credit products and working capital facilities.”
Now, with the global venture slowdown under way, it’s notable that Latin American fintechs continue to raise large rounds in the second quarter of this year. For example, this past week, Ecuador got its first unicorn when payments infrastructure startup Kushki raised $100million at a $1.5billion valuation. And, Mexico City–based digital bank Klar landed $70million in equity funding in a round led by General Atlantic that valued that company at around $500million.
Does all this mean that LatAm is an outlier? Not necessarily. But it does signal that investor appetite in the region remains.