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)

Finally, there is a potential wave of M&A emerging

It seems that the whole market is on sale. We are constantly approached with M&A opportunities

VC investor

There will be a lot of opportunities in times like this, with high cost of capital

VC investor

Know more about ​

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