Web Summit for startups: ‘amazing’ contacts, ‘pivotal’ media exposure, ‘accelerated’ funding rounds
What are three of the biggest benefits of attending our events? According to these founders: market expa...
Latin American companies have been a staple in any investment strategy – particularly in ecommerce and fintech – for a decade. Venture funding in the region rose steadily from 2010 to 2020 before a huge spike in 2021, when Crunchbase estimated a near-US$20 billion cash injection into the region. Although this rise has been tapered by a global slump in investment, Crunchbase data shows investors still put US$8.3 billion into the region in 2022.
Pedro Beirute Prada, CEO of Costa Rican public body PROCOMER, asserted that the region is still worth funding, despite a fall in those numbers this calendar year: “Latin America, as in any emerging market, implies risk … but with risk there’s reward.”
Variances in economic structures, under-developed business infrastructure and, critically, political instability across the region have been traditional causes of concern for VCs. Miryam Lazarte, co-founder and CEO of LatAm Startups, believes this last point was most prominent in holding the area back: “Constant changes in government can make investors nervous.”
However, Miryam also noted that a wave of optimism has washed over the region, bringing with it millions in funding opportunities: “It’s been an exciting time for Latin America. We’ve seen new companies and new technologies, people taking control of markets, which wasn’t happening six or seven years ago.”
What’s changed in that time? Commentators within the region point to three main factors:
Image of speakers discussing the Latin American investment economy at Collision 2022: Piaras Ó Mídheach/Web Summit (CC BY 2.0)
With Latin America comprising dozens of countries and a population in excess of 600 million people, business conditions can vary greatly across the region. Miryam offered a breakdown of the startup hubs within Latin America:
The world is facing an economic downturn, and Latin America – a high-growth but developing market – could be at risk. However, with the major business growth in the region in the years leading to this point, it now seems that more organizations could have the structures in place to ride out the storm.
Miryam pointed to companies in industries including Web3 and cybersecurity as potentially resistant to the worst effects of the less fertile landscape, noting that “companies trying to build a customer base, rather than just focusing on funding, will survive”.
Juan Pablo remained bullish about the coming changes: “A lot of investment is still available, but what you see now is founders building businesses on healthy revenue streams, rather than on bad models supported by crazy funding.”
Main image of the CBD of a South American city: Filip Fuxa/Shutterstock
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