Fund managers invested $10.3b in 1H2021 building on 2020 momentum
Opportunities in the region continued to attract private capital fund managers, who have invested heavily in Latin American tech companies, provided infrastructure financing and offered flexible debt solutions to distressed companies.
- Private capital investment in Latin America reached USD10.3b across 402 deals in 1H 2021. This was more than twice the amount deployed during the same six-month period in 2020
- The financial services sector received 42% of total capital invested led by fintech and followed by Consumer Good & Services (21%) and Industrials (20%).
- Geographically, Brazil continued to dominate, receiving USD5.7b followed by Mexico with USD2.2b and Colombia with USD1.3b
A first-half full of records for Latin American VC
VC investment was one of the key drivers of increased dealmaking in Latin America, representing nearly two-thirds of private capital deployed
- VC fund managers invested USD6.4b in 1H 2021, a half-year and full-year record eclipsing the USD4.8b invested for all of 2019
- Investors continue to support accelerating digitalization trends in underserved industries like education, financial services, healthcare, real estate, and retail
- 17 investors including CPPIB, Advent International and its affiliate Sunley House Capital, Sunley House Capital, GIC and monashees invested USD425m in a Series D round for Brazilian proptech Loft.
- 5 investors including Península Participações and Amadeus Capital Partners invested USD85m in a Series E round for Colombian edtech Descomplica
- Mountain Nazca, General Atlantic, and Foundation Capital invested USD65m in a Series A round for Mexican grocery delivery app Jüsto
- Large early-stage and late-stage rounds have continued into 2H 2021 and at the current pace VC investment will likely surpass USD10b by year-end
VC rounds are increasing in size as international fund managers target Latin America
The accelerating pace of VC investment that occurred towards the end of 2020 continued in 2021. Not only are more deals closing—a record 323 deals closed in 1H 2021—but also VC rounds are getting larger.
- The median and average VC round size reached USD1.8m and USD22.5m in 1H 2020, compared to USD1.1m and USD9m in 1H 2020
- 29 VC rounds in 1H 2021 surpassed USD50m, compared to 16 in all of 2020
- A maturing VC ecosystem has led to the minting of multiple unicorns this year, including MadeiraMadeira, Bitso, Clip, NotCo, Mercado Bitcoin, MURAL, unico, Tiendanube, and Ualá
Private equity experiences a stronger 1H compared to 2020
Private equity fund managers are backing middle market businesses as they begin to emerge from the most difficult cycle of the COVID-19 pandemic. Some regional players have joined late-stage VC rounds to access the upside in Latin America’s growing VC ecosystem.
- Private equity fund managers committed USD1.6b through 1H 2021 an 82% increase over 1H 2020
- Advent International and its affiliate Sunley House Capital invested USD400m in payment provider EBANX of Brazil and committed USD30m to the company’s planned IPO in the U.S.
- BlackRock invested an undisclosed amount in retail distributor Grupo Axo of Mexico
Fund managers stepped up infrastructure financing, with large transactions in the pipeline for 2H2021
Fund managers invested USD1.5b in equity and debt across 17 infrastructure projects.
- Public bids for fourth and fifth generation highways in Colombia presented attractive investment opportunities for fund managers
- 9 investors including Ashmore Investment Management provided a USD747m senior loan for the Autopista Río Magdalena 2 project in Colombia
- In Brazil, infrastructure investors deployed capital predominantly in renewable energy assets and road concessions
- Vinci Partners’ invested USD36m to acquire the Eólica Mangue Seco 3 and 4 wind farms in Brazil
Momentum in public markets drove exit opportunities for fund managers
Private capital-backed companies continue to take advantage of the momentum in public equity markets to raise additional capital and provide liquidity to private capital investors.
- Exits via public equity markets accounted for USD2.1b out of USD3.6b in total exit distributions recorded in 1H 2021
- Eight companies backed by private capital funds made their debut in public equity markets, including seven offerings with a secondary sale by fund managers
- General Atlantic divested USD139m after dLocal’s public offering on the NASDAQ
- Warburg Pincus and Gávea Investimentos divested USD151m after Grupo GPS’ public offering on the B3 in Brazil
For more information about private capital activity in Latin America, download the latest LAVCA Midyear Industry Data file. The latest data release includes underlying public data and aggregate statistics on fundraising, investment and exit activity from the first half of 2021. Member access includes a detailed Excel file with 14 tabs with exhibits and data on:
- Fundraising totals and largest funds achieving a close
- Investment totals and breakdowns by deal size, country, asset class and industry
- List of publicly disclosed investments in Latin America
- Exit totals and breakdowns by country, industry and exit type
- Highlighted exits and IPOs
- VC investment, VC fundraising totals, and country breakdowns
- Additional breakdowns for Brazil, Mexico, Chile, Colombia, and Argentina
