Latin America is starting to show up more strongly in investments in startups this semester, with the highest volume in history. Although still about ten times less than what is invested in private companies in the United States, reports from LAVCA (Association for Private Capital Investment in Latin America) and CB Insights show that companies in the region raised at least $6 billion in venture capital investments in the first half of the year.
LAVCA estimates at least $6.2 billion in the first half of the year, a 51% increase over the total invested in 2020. Compared to the last half-year, meanwhile, the increase was 138%.
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The record activity in the half-year is not only in late-stage but also in Seed and early-stage investment, according to LAVCA estimates. According to the association, the largest transactions in the half-year were:
Top 10 transactions of the half-year, according to LAVCA
- Nubank – $750 million – valuation of $30 billion
- Kavak – $485 million – valuation of $4 billion
- Loft – $425 million – valuation of $2.9 billion
- Nubank – $400 million – $25 billion valuation
- QuintoAndar – $300 million – valuation of more than $1 billion
- Clip – $250 million – valuation of $2 billion
- Bitso – $250 million – valuation of $2.2 billion
- Gympass – $220 million – valuation of $2 billion
- Loggi – $205 million – valuation of more than $2 billion
- Cloudwalk – $190 million – undisclosed valuation
- MadeiraMadeira – $190 million – valuation of $1 billion
As per CB Insights’ global State of Venture report, there were 194 transactions in the second quarter of 2021 alone, with a total raised of $7.2 billion. Counting the entire first half of the year, the amount of $9.3 billion is already double that of the entire year 2020.
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The big difference between the estimates lies in the methodology: CB Insights considers transactions such as JP Morgan‘s investment, which bought a 40% stake in C6 Bank in June, and Advent International‘s $430 million investment in EBANX (owner of LABS). LAVCA does not consider these transactions as venture capital, but as M&A and Private Equity, respectively.
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In addition, CB Insights counts the Caribbean as an investment in Latin America, this is the case with the $300 million round from Block.one, which is domiciled in the Caymans Islands but has no operations in Latin America.
“Those three examples in themselves represent about $2.7 billion that we did not include in our $6.2 billion estimates. It almost accounts for the entire difference between our numbers,” LAVCA told LABS.
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Yet, as LAVCA put a light on early-stage deals, CB Insights stated that LatAm’s mid-stage deal share rose to a quarterly high of 14% in Q2’21.
CB Insights’ data for second-quarter investments in Latin America
According to CB Insights, the top 5 transactions in Q2 in Latin America include C6 Bank, Nubank, Kavak, EBANX and QuintoAndar, and Block One.
CB Insights also places the $2billion investment in C6 Bank as the third-largest transaction in the second half of the year, behind only China’s Orange Heart Optimal Technology and Sweden’s Northvolt.
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The also Brazilian neobank Nubank appears on the list of the top 10 most valuable unicorns in the world in the second half of 2021, in the sixth position, with a valuation of $30 billion.
The acquisition of C6 Bank for $2 billion also tops the list of the world’s top five transactions for fintechs in the second half of 2021, with Series G investment of $750 million in Nubank in the fourth position.
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CB Insights also lists 110 exits from Latin America, an extremely smaller number than the 1,171 IPOs and M&As in the U.S.. Still, in the second half of the year alone, the region had 108 M&As and four IPOs, a number 107% higher than when compared to the same period last year, according to the report.
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Among the largest investors in Latin America in the second half of 2021 are Kaszek, Monashees, QED Investors, Valor Capital Group, and Canary.
Also according to CB Insights, Mexico had a billion-dollar second quarter with $1.3 billion in 18 transactions, led by Kavak’s $485 million mega-round. CB Insights considers Kavak, Clip, Bitso, Konfío, and Merama the top five investments of the quarter in Mexico.
In Brazil, meanwhile, the second quarter almost tripled the amount of the first quarter, with $4.6 billion in 121 transactions. CB Insights considers C6 Bank, Nubank, EBANX, QuintoAndar, and Cloudwalk as the largest investments of the quarter.