Venture Capital Bounces Back In Latin America; Mexico…

Mexico recovered the second place for most venture capital investment in the region, again standing only behind Brazil on the list.

Vicent Speranza, general director of Endeavor Mexico, told The Latin Times that the country demonstrated great resilience as an ecosystem in 2024. “It regained second place in capital raised in the region, only behind Brazil, with a total of $635 million USD, a 37% increase compared to the previous year,” he noted.

Speranza explained that this upswing was a result of several factors: significant rounds, such as those from Clip and Jüsto, which boosted the total volume; and a greater concentration of capital in advanced stages, considering that 65% of the total raised in Mexico was allocated to “growth” and “late-stage” funding rounds.

“This reflects an investor focus on companies with proven traction, operational efficiency, and a regional vision. Furthermore, something very relevant: Mexico City is consolidating its position as a regional hub for entrepreneurship, talent, and investment, attracting capital at both the early and scaling stages,” he said.

VC Recovery in the Region

The study showed that Argentina has also been key to the recovery of venture capital in Latin America.

In Mexico, Clip and Jüsto stand out for receiving very notable capital injections, $100 million and $70 million USD, respectively. In Argentina, Ualá’s $300 million round represented 73% of the total raised in the country. These funding events in particular drove the reactivation of the VC sector.

Last year also saw the return of large foreign VC funds to the region following the so-called global “funding winter,” which began in 2022. A potential reason for this could be the gradual decoupling of the U.S. and China, Roberto Peñacastro, CEO of Leadsales, wrote in Crunchbase. “With similar time zones, shorter supply chains and reduced logistical complexity, Latin America offers the ‘nearshoring’ advantage U.S. investors are looking for. This supports why the U.S. has remained the region’s largest investor, contributing 33% of LatAm’s total investment in 2023,” he wrote.

At the same time, local funds continued to invest in startups that showed convincing metrics — particularly in key areas like fintech and artificial intelligence (AI). Local funds’ participation in early-stage investment rounds also grew steadily.

Fintech and other mature verticals continue to attract a higher proportion of international investment to the region, getting close to 60% of the funding.

Taken broadly, many of last year’s investment rounds resulted from a combination of local and foreign investment. Such was the case for Cobre, a Colombian startup specializing in business payments infrastructure, which raised $35 million in September 2024. This Series B round was led by U.S.-based Oak HC/FT and included participation from QED Investors, also from the US, the Brazilian fund Canary, and the Argentine fund Kaszek. The round helped Cobre expand its operations into Mexico.

José Vicente Gedeon, CEO and co-founder of Cobre, stated that raising capital in the current period requires a clear business model, a solid vision, and metrics that support growth.

The founder also noted that the VC is growing regionally. “It’s no longer just about growing at all costs, but about creating sustainable companies,” he told The Latin Times. “Entrepreneurs who understand this and investors who seek out these types of investments are the ones who will continue to make the difference. There is capital available, but it’s being allocated to those with a clear value proposition and teams that know how to execute, and that’s good for everyone; it raises the bar for the ecosystem.”

Last year’s trend seems to be extending into 2025 as well. Chile’s Fracctal, which expanded to Spain, told CincoDías that they are raising €25 million after having successfully raised previous rounds with Kayyak Ventures, BBVA Spark, GoHub Ventures, Amador Holdings, and others.

“These investments have been key to accelerating our global expansion, boosting our technological innovation capacity and consolidating our position as a leader in smart solutions for asset management and maintenance,” Fracttal’s CEO Christian Struve told The Latin Times.

432 venture capital rounds were closed last year, according to the report. Although the number of deals was 2% lower than in 2023, the amount of capital raised was higher because there were more mega rounds — funding rounds approaching $100 million — for startups in more advanced stages.

Speranza explained that the seed stage is still active in the region, but maintains a different dynamic. “It continues to represent the majority in terms of the number of rounds, with 272 or 62% of the total, but, contrary to the aggregate trend, average tickets here have decreased by 12%, from $1.7 million to $1.5 million.”

The CEO of Endeavor added that “today, with fewer options for later funding, early-stage funds are looking for experienced teams, with strong tech leaders, early traction, and solid models from day one. This adjustment does not mean a lack of investment, but rather a stage more focused on quality than quantity.”

Numia, a seed-stage startup within the AI ​​industry, can confirm this. Mexican fund Cometa led the Argentine startup’s $3.5 million round. Numia’s country manager in Mexico, Alberto Villalpando, told The Latin Times that one of the reasons they closed this round was precisely to have a validated product with sustained growth and proven profitability.

In short, “we’re seeing a more optimistic or improved outlook so far this year,” Eric Pérez-Grovas, founder and managing partner of the Mexican fund Wollef, told The Latin Times. As an example, he said, three of the startups in his portfolio have recently closed successful rounds.