📊 Venture Capital

A brief look at the last decade of tech and startups in LatAm; what are we left with?

2021 was an unprecedented year for Latin America. The region received almost $16B of capital for startups. A crucial factor in tech investment was certainly the outpouring of talent and ambitious entrepreneurs who wanted to solve challenging problems.

But why exactly did investments triple what they were in any recorded year in 2021? The explosive growth also happened outside of Latin America — the US saw 2x the influx of yearly capital into tech ventures.

The answer can be summed up in three words: low interest rates. Low interest rates led investors away from bonds, stocks, and other assets to venture capital and startups, where the potential for higher returns was increasingly worth the risk.

Some companies rode this massive wave of capital and reached the now-avoided term "unicorn" status — a $1B+ valuation. In the aftermath of capital drying up, many startups that claimed that title no longer do.

It's hard to get a clean read on valuations nowadays because private startups don't want to disclose that their valuations shrank from 2021 to now. "Shrinking" is not a sexy term in venture capital; startups and tech are more about "growth." If you're growing, let everyone know; if you're not, keep that to yourself.

In the last decade, LatAm has seen the rise of a new technology industry composed of highly skilled talent and leaders with an entrepreneurial mindset. So far in that period, the region has received $26B. The "easy money" and flashy startup days of 2021 may very well be behind us. And yet, we're left with a culture passionate about seeking out and realizing our region's potential.

Some companies continue to attract capital with inventive, valuable ideas and talented teams; we highlight them weekly in our Domingo Brief. Take Daki, the supermarket startup that received $5M, or the healthtech Genial Care, which received $10M of fresh money to expand its autism care services.