Latin America is witnessing increased trends of digitalization and private capital investments jumped just double in 2021 from the previous year. Tech startups were equipped with about $29.4 billion in the year. In 2020, the investments in the segment were $16.8 billion. The rise in investments reveals enhanced interest in the domestic industry and simultaneously it is a gesture towards maturity among companies.
More than half of the total private capital funding came from venture capital. The investment inflow in the LatAm startups was $15.7 in 2021.
A report by the Latin American Private Capital Association reveals the total capital invested in 2021 was far more than that of 2020. The sum was just $4.8 billion in 1999. Hence, a jump of 3x was witnessed. The investment momentum picked up in the first few months of 2022 and the established investors embraced about $5 billion.
More LatAM tech startups had been on the rise in the past few years and this has attracted global players in great numbers. Some of the players to name here include Berkshire Hathaway, Tencent and Softbank.
However, the pace accelerated in 2020 and 2021 with the increase in digitization amid the COVID-19 pandemic. Sixteen new unicorns emerged and these include Badeira Madeira, Uala app, Clip payments company, konfio, Mercado Bitcin and Bitso.
The well-established companies too witnessed vigorous activity. The Nubank online bank tapped about $750 billion during the pandemic period and thereafter went public by getting the stocks listed on the NYSE.
Simultaneously, the fintech segment managed to attract around $6.1 billion in 2021 and is now equipped with about 40 percent of all the investments. Investment associate Chloe Novene said the market opportunity in the segment is big and a lot of space can be noticed to offer products that were earlier not included in the system.
About 258 transactions were reported in the segment in 2021 and it included a $250 million round by Clip, a Mexican payments company. The cryptocurrency and retail lending too witnessed enhanced attraction.
Latin American already was equipped with Buy Now and Pay Later companies and Kueski received a fund of $202 million in the year. The next two companies to receive great funding was Nelo with $20 million and Aplazo with $5.3 million.
The top tier companies are doing find and in recent years the startups have emerged as revolutionary. A dramatic change was noticed in the period of the past five years.
Many investors have started betting on various startups while keeping an eye on Latin America. Brazil has managed in attractingÂ the most capital in the industry.