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Latin American Startup Funding Fell Again In 2023

LatAm Quarterly. Illustration of man with bag of $ going down an escalator while robot goes up.[Dom Guzman]

A couple of years ago, Latin America was the fastest-growing region in the world for startup investment. Hot companies from Brazil to Mexico were securing large, later-stage rounds to scale up in sectors like real estate, fintech and e-commerce.

Not anymore. In 2023, Latin America ranked for the second year in a row among the fastest shrinking regions for venture capital funding.

Altogether, companies in South America and Central America pulled in an estimated $2.9 billion in seed through growth stage investment in 2023, per Crunchbase data. That’s a drop of 63% from 2022 and a remarkable 84% decline from 2021, when investment hit record-setting levels.

For a sense of how 2023 compared over the longer term, below we charted out annual funding to Latin America, color-coded by stage, for the past 10 years.

Though dramatic, the declines this past year don’t appear closely tied to country-specific economic or political factors. Latin American GDP growth is projected at 2.3% for 2023, which is neither great nor catastrophic. Inflation is also expected to remain at a suboptimal but manageable level, with the exception of Argentina and Venezuela.

Rather, Latin American startup funding appears to be down less due to perceived issues in the region’s leading economies and more just because investment has fallen everywhere. In addition to investments, exits have also become scarcer, with few IPOs last year and not a ton of big-ticket acquisitions.

Table of contents

Brazil in the lead, followed by Mexico

Even in this scaled-back funding environment, we did see some big rounds get done.

Most of the largest came from Brazil. This includes an October Series B for São Paulo-based QI Tech, a tech-enabled credit provider that picked up $200 million in a financing led by General Atlantic. A couple months earlier, Brazilian online real estate platform Loft secured $100 million in fresh financing, bringing total funding to over $800 million to date.

Mexican companies also closed some good-sized rounds, led by financial services. Kapital, a fintech platform for small and medium-sized businesses, landed $40 million in a December Series B. And Albo, an online banking and credit provider, raised $40 million in Series C financing in September.

Broadly, we saw the sharpest pullback at late-stage in 2023, as the absence of IPO demand also curtailed pre-IPO financing activity. The declines were particularly pronounced in the fourth quarter. Early-stage and seed dealmaking, meanwhile, showed more resilience.

For greater detail, we broke down quarterly financing by stage below, comparing the past 12 quarters.

Early stage

For 2023, early-stage dealmaking improved a bit in the fourth quarter, after getting off to a sluggish start in Q1.

Investors put close to $520 million into at least 37 known rounds in Q4, per Crunchbase data. That’s more than double the Q3 total and even a bit above year-ago levels.

For perspective, we charted out round counts and investment totals for the past five quarters below.

Late stage

While early-stage investment rose quarter over quarter, later-stage dealmaking declined.

In the fourth quarter, just over $230 million went into six reported later-stage and growth-stage financings, per Crunchbase data. That’s less than half the year-ago investment total and also well below the Q3 tally, as charted below.

Don’t read too much into quarterly fluctuations

It’s probably wise not to make too many sweeping pronouncements about trends in the venture funding landscape based on a single quarter’s data. In Q3 2023, early-stage funding was down in Latin America and late stage rebounded a bit. Now, as we look at Q4, the opposite is true.

Given that there aren’t too many large, late-stage rounds in a given quarter these days, a sluggish three months may not be a meaningful indicator. Looking more expansively across the full year, however, broad statements about the funding climate should have more validity. And by this measure, the overarching trend is clear: After a record cycle of rising investment, activity has cooled considerably.

To reverse course, we’ll need to see a pickup in exits or, at the very least, a rise in investor willingness to put more capital to work as we await a turnaround.


The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Jan. 17, 2024.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round.

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

Illustration: Dom Guzman

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