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Unicorns and IPOs: Latin America’s Record Start to 2018

12 November 2018

The first half of 2018 was a record-breaking semester for startup investment in Latin America.

Investment dollars grew for every major market in the region, with Brazilian and Mexican startups capturing the most investment.

Fintech, marketplaces, and agtech were top sectors in this period (1H2018), and startups raised an unprecedented number of US$100m+ financing rounds, with participation from notable global players, generating a new class of unicorns.

See below top level trends from 1H2018 or download LAVCA’s Startup Heatmap presentation and infographic from November 2018 to view 18-month VC/tech trends (2017-1H2018):

Startup Heatmap
[lavcabutton link=”https://www.lavca.org/app/uploads/2018/11/FINAL-LAVCA-Startup-Heatmap-Presentation-10.29.18.pdf” target=”_blank” text=”Download PRESENTATION” display=”inline”]

RECORD DEALS

Deal count was up 58% and dollars invested were up 64% in 1H2018, compared to the same period last year:

1H2018 VC investments in Latin American Startups: US$780m across 145 deals
1H2017 VC investments in Latin American Startups: US$477m across 92 deals

BRAZIL

Startups in Brazil, the region’s largest market by capital invested, raised more VC financing in the first semester of 2018 than the entire region’s startups in 2016:

1H2018 VC investments in Brazil: US$546m* across 88 deals
1H2017 VC investments in Brazil: US$362m across 47 deals
Growth in Brazil from 1H2017 to 1H2018: 87% (deals), 51% (dollars)

*Note these numbers include a US$111m round in Loggi that was announced in Sept. 2018 but closed in 1H2018.

MEXICO

Mexico, the region’s second largest market, also showed year-over-year gains more than doubling the amount of dollars invested in startups in the country compared to the same period last year:

1H2018 VC investments in Mexico: US$75m across 23 deals
1H2017 VC investments in Mexico: US$36m across 19 deals
Growth in Mexico from 1H2017 to 1H2018: 21% (deals), 110% (dollars)

Investment dollars grew for every market in the region, including Colombia (up 36% to US$92m), Argentina (up 515% to US$38m), and Chile (up 248% to US$11m).

SECTOR BREAKDOWN

Top Sectors:  Fintech was the #1 sector of VC investment in terms of dollars (US$337m) and deals (35), followed by marketplaces (US$200m over 10 deals) and agtech (US$41m over 17 deals).

#UNICORNS 

2018 to date has been a record year for Brazilian tech unicorns (unicorns are privately held, VC or PE-backed) and tech IPOs, as well as the emergence of Colombia’s first unicorn, Rappi:

  • 99 Brazil-born rideshare giant was acquired by Didi Chuxing in Jan. 2018 at a reported valuation over US$1b
  • PagSeguro Brazilian payments company raised US$2.7b in NYSE IPO in Jan. 2018
  • Nubank Brazilian fintech raised over US$400m in 2018 at valuations of US$2b+ and US$4b+
  • Rappi Colombian last-mile delivery service raised US$385m+ over two rounds in 2018, the latter at a unicorn valuation
  • Ascenty Digital Reality acquired a controlling stake in Brazilian data center/IT provider Ascenty at a valuation over US$1.8b in Sept. 2018
  • #IPO Arco Educação Brazilian learning systems provider IPO’ed on the Nasdaq in Oct. 2018 and was valued at over US$1b by the end of the first day
  • #IPO Stone Pagamentos Brazilian payments company IPO’d on the Nasdaq in Oct. 2018, raising US$1.1b for an initial market cap of ~US$8.7b.

Check out LAVCA’s directory of startups that have raised US$1m+ and LAVCA’s list of highlighted companies that have been acquired/listed.

NOTABLE GLOBAL PLAYERS*

2018 to date has seen the entrance of major global players in the Latin American tech market, including:

*LAVCA 1H2018 data includes investments from fund managers only. Corporates and other strategic investment transactions are not accounted for in the totals.

HIGHLIGHTED TECH TRANSACTIONS

Startups raised an unprecedented number of US$100m+ financing rounds. Highlighted transactions and notable exits/IPOs from Jan. 2018 – October 2018 include:

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