For LatAm Startups, finding VC funding is easier than ever

Led by Softbank Vision Fund, LatAm startups are finding VC easier than ever. In the region, unicorns are blooming, and early-stage startups are being backed for escalating their business.

For Latin American startups, finding venture capital (VC) funding is easier than ever. Thanks to the Vision Fund started by Softbank in 2019, founders of tech-based companies count with broader options for escalating their business. Since then, Latin American unicorns have popped up around the region. 

Mexico and Brazil have been the favorite markets for venture capitalists. In the last two years, most of the Latin America Tech unicorns surged in these countries. 

The boom of Brazilian unicorns

Riding service app 99 was the first tech unicorn in Brazil. The company reached the status when the Chinese firm Didi Chuxing purchased a majority stake in 2018. However, 2019 was the year of the Brazilian unicorns. Thanks to the Vision Fund of Softbank, led by the Bolivian executive Maurice Claire, that year was a turning point for the Brazilian ecosystem. Five tech-based companies reached unicorn status: Loggi, Gympass, QuintoAndar, Ebanx, and Wildlife. In that year, Softbank invested R $ 10 billion in new companies in Latin America, an equivalent of 2.4 million dollars.

Since then, the LatAm startup ecosystem has constantly leveled up. 

The Boom of Mexican Unicorns

If 2019 was the year of Brazilian unicorns, 2021 has been the year for the Mexican ones. In 2020, Kavak achieved the title of the first Mexican unicorn. In May 2021, Bitso became the first Latin American cryptocurrency company to reach unicorn status. Next month, a third unicorn appeared after an investment round led by Softbank into broker company GBM. In the same month, another investment of Softbank boosted payments company Clip, one of the most expected unicorns of the region. At the end of September, fintech lender for SMEs, Konfio, announce that worth $1.3 bln with new capital. Softbank was leading the investment round again.

Other LatAm Unicorns

Due to the size of their markets, it’s not a big surprise that Mexico and Brazil started to testify a unicorn boom. However, Argentina and Colombia were the first places where LatAm unicorns were found. In Argentina, MercadoLibre and Globant were two early unicorns of the region, now public companies trading in the stock market. Meanwhile, Colombian delivery startup Rappi became one of the first Softbank-backed companies.

Most opportunities for newcomers

These recent success stories of LatAm startups are blazing a trail to other startups in their early stages. According to LAVCA’s data, in 2020, venture investment in the region topped USD4b for a second consecutive year. Last year, VC investment recorded 488, with HealthTech and EdTech being two of the most appealing sectors. 

Latin American startups still need to show that they’re worthy and sustainable in the long term. For gaining the trust of global venture capital, they need to prove that they’re resilient to the unstable environment of the region. But at least for now, they are corroborated that Latin America can be the birthplace of global tech companies.

Read also: Brazilian Startups: 2020 begins with growth opportunities