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01
Funding & Investor Relations
Funding sources are diversifying as a shortage of capital is expected; the VC - startup relationship is evolving.
The volume of capital dropped, but is still 63% above pre-pandemic levels and is mainly available for early-stage startups
Latin america venture capital volume
USD Bi
1. Includes Series A and Series B rounds of funding stages
2. Includes Series C+ rounds of funding stages
Source: SlingHub
According to our study, almost 1/3 of startups have less than 18 months of runway
The market foresees a shortage of USD 2 bn+1 in annual capital for series B+ in LatAm
Round cycles are getting longer and VC Funds are taking more time to close deals
VC investor
In this scenario, sources of funding will continue to diversify pushed by local VCs that are becoming more mature and experienced.
80%
of largest LatAm based VC Funds2 are on the Fund III +
USD
2.2 bn3
in dry powder from Brazilian VCs
+150
new LatAm-based VC Funds emerged in the past 3 years
In this scenario, sources of funding are diversifying pushed by local VCs that are becoming more mature and experienced
1. According to research done by Kamaroopin published on the NeoFeed website, 2023
2. Selected LatAm VCs with more than USD 100 million of capital raised
3. According to market estimation published in Spectra's Survey with Entrepreneurs Report (2023)
Source: SlingHub, Crunchbase, NeoFeed, Spectra, Kamaroopin, NeoFeed
CVCs can become even more prominent by adjusting their operating model
Penetration of CVCs
# CVCs / # of listed companies
Source: PitchBook Data, Inc. Data has not been reviewed by PitchBook analysts
Common pitfalls CVCs should avoid in order to be successful
High dependency
Lack of agility on decision making process
Lack of VC mentality
Weak monitoring on financial performance and failure to capitalize on synergies
Limited leveraging of its unique advantage
Failure to use industry specific know-how to help investments strive
Drowning in bureaucracy
Loss of autonomy for the startup's founders and management team
VCs need to continue to evolve on how they support startups
Main attributes startups look for in VC Funds
% of respondents
1. Early-stage includes Seed and Series A stages; Late-stage includes Series B+ stages
2. Others include ethics, reputation with LPs, brand and commitment for future rounds
Source: McKinsey LatAm Startup Study (2023)
