LAVCA members can log in and download a nine-page PDF report with key market insights and an accompanying Data Pack for 2021 fundraising and disclosed closings; exit totals and highlighted exits; all disclosed transactions, sortable by stage, sector and HQ; stage analysis for the major markets; and sector breakouts with year-over-year growth. Key takeaways from LAVCA’s year-end Industry Data and Analysis are included below. Moving forward, LAVCA members will receive quarterly data releases.
LAVCA data on private capital activity in Latin America through year-end 2021
Digitalization was the dominant theme across Latin America’s private capital landscape in 2021, with technology companies driving interest across asset classes and pushing private capital investment to a new record of USD29.4b.
- VC investment reached a record of USD15.7b in 2021, more than what the region’s startups attracted in the 10 years prior and over half of total private capital dollars invested in 2021.
- Growing dry powder in VC is poised to fuel further investment in Latin American tech companies, with established investors managing over USD5b in Latin America-specific vehicles ready to be deployed.
- Consumers in Latin America have become more comfortable seeking services and products online. Fintech and e-commerce attracted 64% of total VC dollars invested in the region.
- PE investors, corporates, pension funds and sovereign wealth funds are playing a central role in tech investing in Latin America, anchoring or contributing to late stage rounds for high-growth tech companies
Notable VC rounds with participation from PE investors, corporates, pension funds and sovereign wealth funds
For more information about VC trends and activity in Latin America, view LAVCA’S 2022 Trends in Tech Report. LAVCA members have access to an accompanying Excel file with underlying data on investments, fundraising and exits.
Private capital funds are financing the region’s bet on greater connectivity and competitiveness through digital and transportation infrastructure, with a record USD7.5b deployed across 38 infrastructure projects.
- In Colombia, investors are reducing the country’s infrastructure gap through public-private partnerships (PPP) to finance the country’s 4G and 5G roads. Patria Investments committed USD345m to two toll road concessions in the country, including the first project of the 5G PPP program. SURA and Credicorp’s Unión para la Infraestructura provided financing for Puerto Antioquia, a multipurpose port to be built in the fruit exporting region of Urabá.
- Global players including KKR, I Squared Capital and DigitalBridge are deploying nationwide fiber optic networks, telecommunications towers and data centers. Digital infrastructure attracted one of every three dollars deployed in infrastructure investment, with USD2.1b deployed predominantly across Chile, Colombia and Mexico.
- Consolidation remained a key theme for legacy oil & gas infrastructure in Brazil. Petrobras continued to trim its assets with the sale of the Landulpho Alves refinery to Mubadala Capital for USD1.8b – the largest private capital deal of 2021.
Country highlights: The region’s major markets each reached new investment milestones despite socioeconomic and political headwinds exacerbated by the pandemic.
- Brazil continued to attract the most capital in the region, minting eight new unicorns and capturing 48% of total capital invested.
- Mexico minted four new unicorns and VC increased fourfold in 2021, driving total capital investment to a record USD5.5b.
- Colombia’s deal volume doubled, with VC and infrastructure leading an overall year-over-year increase of 20%. VC increased threefold to USD1.6b in 2021.
- Chile minted its first unicorn and attracted a record USD3.4b across all asset classes.
- Argentinian startups attracted USD1.3b in venture investment, with six VC rounds over USD50m.
- VC in Peru increased fivefold to USD115m as other asset classes wound down.
A return to growth in Latin America’s major economies, coupled with low interest rates during the first half of the year, fueled M&A activity and public listings for private capital-backed companies.
- The resumption and acceleration of dealmaking after pandemic-related holds coupled with low interest rates resulted in a record 83 strategic sales of private capital-backed companies. Ample fresh funding for late stage startups incentivized consolidation, with mature startups increasingly acquiring smaller companies (e.g., Nubank has acquired six companies since 2020).
- Public market exits slowed slightly from 2020, with USD2.7b distributed to fund managers via public equity markets. Despite high volatility, 20 Latin American companies listed on public exchanges in Brazil and the US in 2021, with 10 offerings including a secondary component in which fund managers sold part of their stake.
- As interest rates in Brazil rise, investors’ demand for public equities will soften as fixed-income strategies become attractive again. Yet many of the region’s fund managers have taken advantage of the IPO window of the last 18 months to hold successful listings for their businesses.
For more information about private capital activity in Latin America, download the LAVCA 2022 Industry Data Report and Data Pack. The latest data release includes public data and aggregate statistics on fundraising, investment and exit activity updated through December 31, 2021. Don’t see what you are looking for? LAVCA Members can make custom data requests by emailing [email protected].