TLDR:
- Latin America VC dealmaking at slowest level since 2018
- High rates, inflation, declining exits contributing to the decline
Venture capital dealmaking in Latin America has hit a six-year low, with 323 deals worth $2 billion in the first six months of the year, according to PitchBook data. The slowdown in the region, with 142 instances of capital invested in startups in the second quarter, is attributed in part to a pullback from US investors. The market is showing “wariness” following record years in 2021 and 2022, which resulted in few exits.
Factors contributing to the decline include high interest rates, inflation, and the overall economic uncertainty in the region. This has led to a decrease in VC activity and investment, with a noticeable drop in deals compared to previous years. Despite this, some experts believe that the market will recover as conditions stabilize and investor confidence returns.
This slowdown in VC dealmaking in Latin America is a significant shift from the trend seen in recent years, and it underscores the challenges faced by investors and startups in the region. As the situation continues to evolve, it will be important for stakeholders to closely monitor market conditions and adapt their strategies accordingly to navigate the changing landscape of VC investments in Latin America.
