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Startups and Venture Capital in Latin America 2022

From fintechs to last-mile distribution, Latin American startups are hot right now.

As I’ve written before, the defining characteristic of the 21st Century is that innovation and entrepreneurship is happening all over the world today. It’s not just all about Silicon Valley anymore.

Nowhere is that more true than in Latin America. In 2011, the value of venture capital investments in Latin America was $140M — today it’s nearly 30x that, at more than $4B, and growing fast.

Latin American “Unicorns” (startups worth more than $1 billion), via Statistica

The current poster child for LatAm startups is Rappi, founded by three guys from Colombia who attended Y-Combinator in Silicon Valley and then returned to Bogotá, raised over $1B from SoftBank, and they are now the fastest-growing startup in the region, with operations in nine countries across Latin America.

Fintech has also done particularly well in Latin America, partly because in many countries the financial services business is controlled by a small number of legacy players, creating a market ripe for innovation. In just eight years, Nubank has gone from a small Latin American startup to a billion dollar operation, serving 38 million customers across the region.

Fintech is expected to continue to produce startup success stories across Latin America. Pitchbook projects that venture capital investments in Latin American fintech startups will reach $3.3B in 2021, twice the 2020 number. A key reason for this is the huge “underbanked” population — a demographic that the big legacy banks have never cared about.

Brazil continues to be the largest economy in the region, with approximately half of all Latin American venture capital investments (I’ve written before about Florianópolis, “the Silicon Valley of Brazil”). Mexico is home to about a quarter of VC activity in Latin America, and other centers of entrepreneurial activity include Colombia, Peru, Chile, (which has a well-known program to attract startups), and now dLocal has become the first “unicorn” from Uruguay.

Not only is there a proliferation of venture capital firms within the region, there’s also an influx of capital from all over the world. As I mentioned above, SoftBank invested in Rappi, plus Andreessen Horowitz invested in the Brazilian startup Loft, and legendary Silicon Valley VC firm Sequoia backed Nubank. According to Pitchbook, the number of Latin American VC transactions which include a US venture firm has gone from 42% to over 69% just in the past year.

There are a number drivers for why Latin America is such a hot entrepreneurial market right now. First is the shear size — 660 million people is a lot of consumers. In 2012 the Pacific Alliance was formed, providing freedom in the movement of goods, services, capital, and people between four countries that represent a third of LatAm’s GDP. Finally, for complex historical reasons, many sectors in Latin America have been controlled by legacy private companies who have been very slow to innovate, leaving consumers hungry for new innovative solutions (part of Nubank’s success is simply that they offer a credit card that is managed completely via mobile app, something most incumbent banks didn’t offer).

It’s an exciting time in Latin America. Entrepreneurship and venture capital are flourishing. And by all accounts, the opportunities will continue to be strong in the decade ahead.




Silicon Valley guy. I teach entrepreneurship at Stanford, run the 4thly Startup Accelerator, and coach startup CEO’s at Miller Center. Also, I love fish tacos.

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Bret Waters

Bret Waters

Silicon Valley guy. I teach entrepreneurship at Stanford, run the 4thly Startup Accelerator, and coach startup CEO’s at Miller Center. Also, I love fish tacos.

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