附近上门

Last year, Latin America was the fastest-growing region in the world for venture capital investment. This year, it may be on track to be the fastest-shrinking one.

Venture investment to Latin American startups totaled just $2.3 billion in the second quarter of 2022, per 附近上门 data. That represents a drop of more than two-thirds from the year-ago quarter, and ranks as the lowest quarterly total since 2020.

Far fewer deals are getting done too. 附近上门 counted 203 disclosed rounds 1 in Q2, down 38% from Q1 and 39% from the year-ago quarter. For perspective, we lay out round counts and investment totals for the past 10 quarters below:

Looking across 10 quarters instead of just comparing to last year, the latest results look a bit better. Investment totals for the just-ended quarter are high by historical standards. They鈥檙e also higher than any quarter in 2020. So, if we think about 2021 as a period of anomalously easy money, then it鈥檚 conceivable that recent months reflect somewhat of a return to normalcy.

Below, we take a closer look at funding dynamics across stages, focusing on areas that saw the most pronounced slowdown, as well as pockets of growth.

Late stage fell furthest

Late stage investment saw the steepest decline.

In Q2 of this year, investors put roughly a billion dollars to work in Latin American late-stage and technology growth investments, a decline of 80% from the year-ago quarter. For context, we lay out investment totals and deal counts for the past five quarters below:

Deals getting done

A few big deals did get done. Among the recipients of the largest deals was Bogota-based , a platform for buying and selling real estate, which raised $200 million in a May Series C financing.

Other sizable deals included $100 million Series C and D rounds, respectively, for S茫o Paulo-based , a consumer solar energy investment platform, and , an identification technology provider.

New unicorns, however, are no longer getting minted at the same heady pace as a few quarters back. Existing unicorns and hot earlier-stage startups, meanwhile, are in many cases cutting back in the face of a tighter funding environment.

In the crypto space, two unicorns operating cryptocurrency exchange platforms have reportedly laid off staff in recent months: Mexico City-based and S茫o Paulo-based .

Meanwhile, Argentina-based , an early-stage crypto startup, reportedly laid off nearly half its workforce.

The real estate space has also been broadly hit. , a Brazilian proptech unicorn, also disclosed two rounds of layoffs this year, more than 500 jobs. And Brazilian home rental startup , which has raised more than $700 million to date, reportedly 8% of staff.

Early stage held up better

Latin American early-stage startup investment is also down from last year鈥檚 highs, but far less than late-stage.

For Q2, investors put $1.1 billion into early-stage deals (Series A and B). That鈥檚 a decline of around 15% from Q1 and 35% from the prior quarter. For context, we lay out investment and deal count totals for the past five quarters below:

The Latin American funding numbers exemplify the same trendlines we鈥檝e seen in our global reports. It appears falling public tech valuations and a mostly shuttered IPO market have more impact on late-stage investment. At early stage, where an exit is likely years away, backers have less reason to worry about immediate market conditions.

Several of the early-stage rounds were on the large side. Chile-based , a provider of financial services for small and mid-sized businesses, pulled in a big one, securing $111 million in Series B financing in May. And , a Quito, Ecuador-based payments platform, raised $100 million in a June Series B.

Active investors

The list of most active startup investors in Latin America for this year contained many familiar names.

The most active lead investor by deal count was , followed by , , and .

The most active lead investors by aggregate deal size, meanwhile, was , followed by , , Kaszek and .

Broadly, we鈥檙e not seeing established active investors exiting the region. While they may be doing fewer large, late-stage rounds, it appears they鈥檙e still committed to Latin America鈥檚 startup ecosystem.

The big picture

So what to make of the last quarter and half-year numbers? Well, to put it simply, we鈥檙e down. It happens. After many quarters of up, up, up, it鈥檚 not exactly a shocker.

For now, the relative strength of early-stage dealmaking compared to late stage offers some pretext for bullishness. Seems that while investors aren鈥檛 thrilled with valuations and public market comps in the present market, the long-term outlook still leaves plenty of room for optimism.

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