Latin America VC Fund Inflow Nearly Doubles in 2018

VC funding increased to US$1.98 billion last year, up by more than US$700 million on 2017, according to the Association for Private Capital Investment in Latin America.

VC

Venture capital (VC) investment in Latin America nearly doubled in 2018 compared to the previous year, as global funds accelerated their hunt for prospective business startups across the region.

VC funding reached US$1.98 billion last year, up by more than US$700 million from 2017, according to the Association for Private Capital Investment in Latin America.

Last year’s investment was more than three times the amount invested in the region in 2016.

The association says VC funds targeting Latin America are also busy raising more money for investment, and that there was a more than 55% increase in fundraising last year.

Venture capital funds are mainly looking for startups in sectors such as information technology and energy.

Companies providing technology infrastructure services, such as fiber optic cable networks, are also drawing the attention of fund managers.

Another new trend in the market is joint investments by global and Latin American investors. Transactions are also growing in size. Brazilian startup iFood raised as much as US$500 million in November last year.

Brazil remained the largest market for VC funds, with 259 startup investments totaling US$1.3 billion, followed by Mexico , with 95 startup investments totaling $175 million, followed by Colombia. There were significant investments in Argentina as well, although the economy of the South American country suffered throughout the year amid a currency crisis.

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In the first quarter of 2018,  three startups – Nubank, 99, and PagSeguro – gained unicorn status. Colombian delivery platform Rappi and airline loyalty program operator LifeMiles are also growing at a commendable speed, attracting investors’ attention.

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