Startup fundraising in Latin America surged 26% year-on-year in 2024, outperforming Europe’s 7% increase and Southeast Asia’s 34% contraction, according to a report by Reuters citing new research from Endeavor and Glisco Partners.
The study attributes the region’s robust growth to demographic tailwinds, accelerated digital transformation, and the maturation of capital markets. Looking ahead to 2025, the report anticipates continued momentum, supported by a young, tech-savvy population and rising investor sophistication.
However, structural challenges remain. The report highlights limited participation from local capital in later-stage funding rounds, coupled with broader macroeconomic volatility, as ongoing headwinds.
The analysis also points to a shift in capital deployment patterns. Growth-stage companies attracted 65% of total capital invested in 2024, up from 46% the previous year, underscoring a preference for more mature, scalable ventures. While the number of funding rounds declined, deal sizes increased.
Emerging investment structures are also gaining traction. The report identifies venture debt and hybrid rounds combining equity and debt as increasingly popular instruments among investors seeking downside protection with growth exposure.
Secondary market activity is projected to grow by 60% annually, offering early-stage investors improved liquidity options. Meanwhile, employee stock ownership plans (ESOPs) are emerging as a tool to attract and retain talent – although adoption remains limited, with fewer than 20% of startups in the region currently offering such schemes due to regulatory and financial uncertainty.
Sector-wise, fintech remained the dominant recipient of capital in Mexico, while proptech and enterprise software startups experienced the fastest growth. Mexico and Argentina stood out as regional leaders in 2024’s venture capital rebound.
Notable transactions included large funding rounds for Mexican startups Clip and Justo, which helped sustain a healthy investment pipeline. In Argentina, fintech player Ualá raised $330m, accounting for 73% of the country’s total capital raised.
