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High-Speed Latin American Startup Funding Slows in 2022

Illustration of injured unicorn for quarterly LatAm.

One year, you’re the fastest-growing region in the world for startup investment. The next, it’s all shrinking fast.

That’s the narrative playing out across Latin America in the wake of a sharp shift in the startup funding climate. Per Crunchbase data, investors put $8.28 billion into the region in 2022, down 79% from 2021, a record-setting year.

Over all of 2022, investment was down heavily at both early and late stage, while seed investment actually rose a bit. In the fourth quarter, funding at every stage came in far below year-earlier levels.

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For perspective, we chart out total funding, color-coded by stage, for the past 12 quarters below:

A couple quick takeaways stand out from the chart above. First, the magnitude of declines from Q1 to Q4 of 2022 was quite dramatic, evidence that the year started on a much more optimistic note than it ended. 

Secondly, it shouldn’t be understated that 2021 was a hard act to follow. While 2022 was below peak, it was still the second-highest funding year of the past decade, as illustrated in the chart below:

To get a clearer sense of the ups and downs of the 2022 funding scene, we break things down by stage below, including a look at the largest rounds and most active investors.

Late stage

We’ll kick things off at late stage, which has seen some of the steepest declines.

For all of 2022, investors put $3.57 billion into late- and growth-stage deals, per Crunchbase data. That’s a drop of over 72% from 2021, when over $13 billion went into late-stage dealmaking.

The year-over-year comparisons are even starker for the fourth quarter. During Q4 of 2022, just $450 million went to Latin American late-stage deals, down 84% from a year earlier. 

For a sense of the funding trajectory, we chart late-stage funding for the past five quarters below:

Even with the funding slowdown, we did see some good-sized rounds in the latter half of 2022. Standouts include NotCo, a Chilean maker of plant-based meat products that raised $70 million, and Cortex, a Brazilian business intelligence software provider that pulled in $50 million.

Early stage

Early-stage investment also slipped lower every quarter last year.

For the full year, an estimated $3.22 billion went into early-stage venture rounds. That represents a decline of just over 40% from 2021.

The fourth quarter came in especially low, with $344 million in early-stage investment, down 80% from a year earlier. For the bigger picture, we aggregated early-stage investment for the past five quarters below:

Some big early-stage rounds did get done, even in Q4. This includes a $28 million Series A for Lemon Cash, an Argentina-based digital wallet startup, and a $27 million Series B for Agrolend, which provides credit for Brazilian farmers.

Seed stage

Seed-stage investment in Latin America actually hit an all-time high in 2022. Reported deals totaled nearly $1.16 billion, up 9% from 2021.

However, the year-over-year gains are attributable entirely to heightened activity early in 2022. In the second half of the year, reported seed funding slowed considerably, as illustrated in the chart below:

Because there is often a lag between when seed funding occurs and when it is added to the dataset, it’s likely the Q4 numbers will rise in coming weeks and months. These additions, however, are still unlikely to change the general pattern of declining investment.

Big investors pull back

In 2021, much of the surge in venture funding to Latin America was the result of large, global investors upping their activity in the region. In 2022, by contrast, many of these active investors pulled back amid a worsening exit climate and diminishing valuations for their existing holdings.

The pullbacks were most pronounced in the second half of the year. SoftBank Latin America Ventures, for instance, had no disclosed investments in the latter half of 2022, per Crunchbase data. Tiger Global Management had just two. Both firms were among the most active global investors in Latin America in 2021.

Regional investors also cut back. Kaszek, the Brazilian firm that ranked as the most active regional investor in 2021, sharply reduced deal count in 2022, per Crunchbase data, most markedly in the second half. Deal count for Brazil-based Monashees, the second most active in 2021, was also down considerably in 2022.

Given that active investors did fewer deals across virtually all geographies in 2022, the pullbacks to Latin America aren’t necessarily indicative of growing pessimism about the region’s startup potential. Rather, this looks more like the familiar cycle of a down year after a very up year. 


The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Jan. 4, 2023.

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.

The most recent quarter/year will increase over time relative to previous quarters. For funding counts, we notice a strong data lag, especially at the seed and early stages, by as much as 30 percent to 40 percent a year out.

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

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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