Cuantico: Venture Capital in Latin America in 2024 Reflects Challenges and Signs of Recovery
Cuantico, a research firm specializing in Venture Capital, has released its latest report, Latin America Venture Capital Report 2025. With a total of 694 rounds and $3.6 billion in capital raised, the year has been one of the most challenging for the startup ecosystem in the region.
As investors prioritize startups with stronger business models and sustainable financial metrics, the amount of capital invested has dropped to levels not seen in the past five years. However, the sector has begun to show signs of recovery, with a significant rebound in the final months of the year.
Brazil and Mexico Lead Investment Inflows
Brazil, Mexico, Argentina, and Colombia led investment inflows in 2024, collectively accounting for a large share of the region’s total funding:
- Brazil: $1.7 billion
- Mexico: $792 million
- Argentina: $418 million
- Colombia: $353 million
Despite this concentration of capital, a year-over-year comparison with 2023 paints a challenging picture for most countries. Investment amounts fell across much of the region, with the exception of Argentina, Colombia, and Peru, which recorded growth.
The resilience of these three markets suggests a shift in investment dynamics, with growing interest in strategic sectors and business models that have demonstrated greater stability amid macroeconomic volatility.
The 'VC Winter' and a Shift in Investment Strategy
With 694 deals closed in the year, transaction volume is also at its lowest level in five years. This slowdown has given rise to the term VC Winter, referring to the challenges startups have faced in securing capital.
Investors have adjusted their strategies in response to market conditions. In 2024, over 80% of funding rounds were allocated to pre-seed and seed-stage startups, reflecting a focus on the early incubation of high-potential, scalable projects.
Additionally, 13% of funding rounds in the region went to Series A companies, marking a record high. This increase suggests that while access to funding has been more restricted, startups with sustainable models are still securing investor support for growth.
Cuantico’s report indicates that this trend represents a market correction following the excesses of 2021 when ultra-low interest rates fueled a surge of investments in later-stage startups—many of which are now struggling to maintain their valuations.
Signs of Recovery and the Impact of AI
Despite the challenging environment, the final months of the year have shown promising signs. The fourth quarter of 2024 saw $1.23 billion in investment—the highest figure in the past two and a half years, surpassing all quarters since July 2022.
Another key factor shaping the evolution of Venture Capital in the region has been the rise of artificial intelligence (AI). While excitement around AI has driven a new wave of high valuations for certain startups, the difference from 2021 is clear: investors have adopted a more selective approach, backing only companies with solid business models and proven traction.
According to Cuantico’s analysis, this new investment cycle—more rational and focused on sustainability—could lay the foundation for a gradual recovery of the startup ecosystem in Latin America. While the era of abundant liquidity is over, the industry appears to be evolving toward a phase of greater maturity and stability.
"The Venture Capital industry in Latin America is undergoing a key transformation. While the days of unchecked growth are behind us, we are seeing a more mature and resilient ecosystem where financial sustainability has become the new standard," concludes Cuantico’s report.