13 Most Active Investors in Latin America's Hospitality Industry

Intro

The Hospitality industry, which comprises lodging, food and drink service, and tourism, is undoubtedly among the most affected by the COVID-19 pandemic and its consequences. Only in 2020, the worldwide revenue for travel and tourism experienced a decrease of 34.7%. Although the situation has shown some improvement recently, hotels, resorts, and restaurants all over the world struggle because of various restrictions and newly emerging rules, and uncertainty about this industry remains significant. However, startups in the hospitality field keep engaging VC funds and corporate investors as the field is predicted to start recovering gradually. In Latin America, for instance, investments in this industry reached $255.9M over the last two years and accounted for 3.0% of the total amount of money received in funding rounds in the mentioned region. The top 13 investors (according to the sums of money they contribute) are represented on the diagram below and then analyzed:

13 Most Active Investors in Latin America's Hospitality Industry
data provided by Unicorn Nest

Key takeaways

• Funds Geography -  About a third of the listed funds (7) are located in Brazil; the rest are coming from Mexico and Chile. Sao Paulo and Mexico City are home to four VCs each. Other locations, popular among the companies from the sample, are São Paulo and Santiago. The trend is that the fund's country of origin and the country of their most active investment coincide, so Brazil stays at the top according to the amount of attracted money. Also, the listed firms put money into startups from Mexico, Chile, and the  United Kingdom.
• Industry Focus - Most commonly, the funds contribute to Finance, with Flink (Mexico), Good Money (the US), and Hash (Brazil) being ones of many examples of projects in that field. They also invest in Gamification, Social, and Medical Service industries.
• Important Years - Among the listed funds, Canary was established the most recently, in 2016, while the oldest one, Corfo, was founded in 1939. The majority of the firms emerged between those two years, in 2005. Five out of 20 top establishments closed the highest number of deals in 2020, with 2019, 2016, and 2015 running up.
• Investments - Most usually, companies participate in two rounds yearly, sometimes - in up to six rounds. Every fund from the list invested at least once. The highest number of rounds is 148. The average number of rounds per fund is 57.1, with a median being only 46.0 rounds. Speaking about lead investments, the figures here are significantly lower: 50 for the maximum number of lead investments, 14.5 for the average value, and 8.0 for the median. Commonly, VCs from the sample take part in 24 rounds and lead the rounds eight times. There are also firms on the list that never participated as leading investors. Calculated in percentage points, the index of difference between lead investments and the average falls between -26.34 and 29.0. The average value for this difference is 1.79, with a slightly lower median of 0.74 points, which indicates that some funds from the list act as lead investors more often than others.
• Typical Rounds - Generally, firms presented in the sample enter at the Early and Seed stages with 3-4 investors participating and a round size less than 100 000 or 1-5 million US dollars. Less often, they invest at Venture and Late stages with 2-3 partakers. On average, the portfolio companies' multiplicator is 46541666.87. Its median and maximum value are 0.11 and 558500000.0, respectively.

To conclude, the most active Hospitality industry investors in Latin America come from Brazil-based funds, tend to invest at Early and Seed stages, and have 3-4 partakers per round. The average round size is either less than 100 thousand or from 1 to 5 million US dollars. Despite the fluctuations in the industry, the number of deals remained high for many VCs through 2019-2020.