Latin America Venture Capital Report 2025

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Latin America’s venture capital (VC) landscape experienced a turbulent 2024. While total investment reached $3.6 billion, it was one of the lowest levels in the past five years. Investors prioritized financial sustainability, shifting away from rapid growth strategies. Despite the challenging conditions, signs of recovery began to emerge, setting the stage for an interesting 2025.

VC Investment Trends in 2024 in LATAM

The Latin American VC ecosystem saw 694 deals completed, marking a significant decline from previous years. This slowdown, often referred to as the “VC Winter,” reflected investor caution due to rising interest rates and market corrections. However, late 2024 showed positive momentum, with Q4 recording the highest funding volume in over two years ($1.23B).

Country-Specific Insights

Brazil, Mexico, and Argentina remained the region’s top three investment destinations:

• Brazil: $1.7B in funding, 476 deals (largest market).
• Mexico: $792M in funding, 116 deals.
• Argentina: $418M in funding, showing an increase over 2023 levels.

Interestingly, Argentina, Colombia, and Peru were the only countries to see an increase in VC investment in 2024, while other markets declined.

Stage-wise Breakdown of VC Rounds

Early-stage startups dominated the VC landscape, with Pre-Seed and Seed rounds accounting for over 80% of total deals.

• Pre-Seed: $110M in funding, up from 2023.
• Seed: $408M, the lowest in five years due to stricter investor criteria.
• Series A: $707M, showing a slight recovery from 2023.
• Series B and Growth: Declined significantly as startups focused on efficiency rather than rapid expansion.

Sectoral Trends

Fintech remained the most dominant sector, accounting for 61% of total investment. Other notable sectors included:

• E-commerce (6%)
• Healthtech (4%)
• AI & Machine Learning (5%)
• Cleantech and Agtech, which gained investor interest due to sustainable solutions.

Startup Exits & New Unicorns

The number of VC-backed startup exits fell to 79, the lowest in recent years. Mergers and acquisitions (M&A) continued to face challenges, making liquidity a major concern for investors. Additionally, only one company (Agibank) achieved unicorn status in 2024, highlighting the cautious market environment.

VC Fundraising & Future Outlook

Venture capital funds raised $548 million across 52 Latin America-focused funds—a sharp decline compared to previous years. Many investors expect 2025 and 2026 to be pivotal, with several firms looking to return to market after holding off fundraising in recent years.

Despite the slowdown, AI-driven efficiency and sustainable growth models are driving optimism. Investors are becoming more selective, backing only startups with solid business models, traction, and operational efficiency.

Conclusion

Latin America’s VC landscape in 2024 was challenging, but it wasn’t all bad news. While overall funding declined, early-stage investment remained strong, and some markets showed resilience. Moving into 2025, the focus will shift toward efficiency, profitability, and strategic funding decisions.

Investors and founders alike will need to adapt to this new reality—one that rewards sustainable innovation over hype. 🚀

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