Venture Capital in Latin America: opportunities amidst challenges

Latin America, a region known for its contrasts and entrepreneurial energy, is increasingly becoming a fertile ground for venture capital. While the landscape is still adjusting and learning from past experiences, signs of a strong recovery are emerging, offering opportunities that should not be overlooked. However, the region faces a critical challenge: bridging the gap between its immense potential and the actual volume of investment reaching the market.

Latin America's investment reality: the growing divide

In 2024, venture capital investments in Latin America barely touched USD 5 billion. In comparison, Europe saw USD 55 billion in investment, while the United States received a staggering USD 200 billion. This disparity highlights the vast difference in the capital flowing into these regions, especially when considering the size of economies like Brazil's.

Despite this gap, it's crucial to understand that this is not a sign of hopelessness. On the contrary, it serves as both a wake-up call and an invitation for action. While the capital is still catching up, the talent—the core engine of any successful ecosystem—is already present and showing growing maturity.

The rise of Latin American entrepreneurs: from learning to leading

One of the most encouraging trends is the growing expertise of Latin American entrepreneurs. Many of the region’s founders are no longer newcomers; they've gained invaluable experience from previous ventures. The "second generation" of entrepreneurs is increasingly sophisticated, making the ecosystem more refined and capable of executing on big ideas.

According to Cuantico's 2025 report, half of the founders who raised capital in 2024 were serial entrepreneurs. This trend reflects an accelerated learning curve and a deep understanding of local market conditions, which is invaluable. Additionally, global talent is increasingly focusing on Latin America, understanding the region’s unique challenges and knowing how to address them.

However, despite these positive developments, one major issue persists: the lack of liquidity and exit opportunities. The consensus among investors is clear—without profitable exits, it is difficult to sustain momentum in the region’s venture capital landscape.

The exit dilemma: a vital need for strategic acquisitions

One of the biggest hurdles for Latin American startups is the lack of traditional exit routes like IPOs (Initial Public Offerings). Instead, secondary sales, where investors sell their stakes to others, have become the most common way to generate liquidity. While secondary sales play an important role in recycling capital, they are not the ideal solution for mature ecosystems.

Investors need returns within defined timeframes, and the absence of active and vibrant public markets in Latin America places considerable pressure on the region. The question arises: where are the active corporate buyers, such as Visa, Mastercard, or Citibank in the U.S., who consistently acquire fintechs?

Looking forward, the "open innovation" model, which connects startups with real business needs, could pave the way for future strategic acquisitions, offering the "exits" that investors are eagerly seeking.

Beyond Capital: diversity, regulation, and regional vision

Another significant challenge for Latin America is regulatory fragmentation. The complexity of launching a product in one country and navigating a maze of regulations in neighboring nations can stifle scalability. In response, many startups are focusing on developing an "unfair advantage"—a unique edge that helps them stand out, despite regulatory barriers.

It’s also important to emphasize the role of diversity. Beyond gender-inclusive funds, investors are increasingly seeking founders from underrepresented regions, looking to foster innovation that has both social and environmental impact.

Despite these challenges, Latin American entrepreneurs have demonstrated remarkable resilience in the face of economic uncertainty and social challenges. Investors are noticing this and continue to place their bets on those who are using innovation to tackle real-world problems.