Declining VC investment into LatAm startups could throttle digital growth
September 23, 2022 at 16:01
Declining VC investment into LatAm startups could throttle digital growth There are reasons to be optimistic about the region, so why are investors slowing down?
This column is fascinated by Latin America, a region of the world rich in history, culture and, recently, a massive boom in technology company formation and financing. The period of rapidly accreting venture capital activity, however, is slowing. Fast.
The declines in capital availability, as far as TechCrunch can see, will not prove lethal. However, they may slow the pace at which Latin American economies digitize and mature. Data from Atlantico — a regionally focused venture capital fund and the sister firm of Canary, which invests in earlier-stage Latin American rounds — indicates that there may be enough local capital in the region to ensure that its domestic startups have a shot at persistence.
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That said, it’s perhaps slightly disappointing to watch capital from other regions pull back from Latin America, given some encouraging signs from the region that venture investment was having a material impact.
If we are to have a global economy, and if we are to hope that accelerating capital formation is something any region can enjoy, then we must also expect that technological prowess will not – and should not – be constrained to just part of the world’s geography. This means that Latin America may need startups to help the region compete with other markets. And that means more venture capital over time, not less.