By Renzo Dasso
June 2, 2011—SANTIAGO (MarketWatch) Lack of entrepreneurship has prompted the venture capital industry to hold back from investing in Latin America more aggressively, venture capital investment firm New Enterprise Associates General Manager Patrick Kerins said Thursday. As the venture capital industry shrinks in the U.S. and Europe, venture capitalists are increasingly looking at Latin America as the next region that could offer high-growth potential.
However, young Latin American entrepreneurs “need to be bitten by the bug and start creating big, fast-growth companies,” NEA’s Kerins said. If this condition is met, he added, Latin America could be the next avenue of growth for NEA.
“Brazil is starting to become a popular place to go…We don’t have a particular strategy for Chile yet…but we are in the early stages,” Kerins told Dow Jones Newswires in an interview. The firm plans to enter the region by creating a small portfolio consisting of three to four expansion-stage companies operating in the information technology industry.
NEA would look into companies that offer Internet and cellphone-based services and products, like in other more developed emerging market economies such as India and China.
In China, the number of middle class families using mobile phones to place orders for household products is growing exponentially, Kerins said. Latin America is “very, very early” in this regard, he said, but once it decides to enter the Latin American Market, NEA will invest in the Internet, media, telecommunications firms, and the financial technology industry, all of which have high-growth potential, according to the executive.
NEA has $11 billion in capital and operates in three continents in the information technology, medical science and energy technology industries.
This article and interview was a result of Patrick Kerins’ participation in the 2011 LAVCA Chile Private Equity & Venture Capital Forum. For more information on the event, click here.