Warm Latin America also has a cold venture capital winter

In 2023, VCs invested $2.9 billion in Latin American startups. Crunchbase calculated the funds and tried to determine the reasons for the negative trend.

The above amount means that venture capital funding in the region has fallen by 63% compared to 2022. The drop of 84% compared to the record-breaking figures of 2021 is even more impressive. Latin America has been experiencing the fastest decline in venture capital funding for two years in a row.

Crunchbase’s experts think that the negative trend is not only due to regional specifics and political conditions. There are multiple reasons for it. The problems are primarily economic. This is a multiplier for the global decline in venture capital funding.

Brazilian startups are doing better than others in the region. Lending provider QI Tech raised $200 million in Series B, and online real estate platform Loft received $100 million in new funding.

Despite the overall decline, early-stage and seed deals have shown some resilience.

In Q4 2023, venture capital funds invested $520 million in early-stage startups, more than double the $230 million invested in late-stage companies in the same quarter.

So there is hope for a recovery.