Latin American startups get bigger fatter checks in November: average round size jumps from $13M to $31.9M

November had fewer rounds but larger checks; Brazil leads both in funding raised and number of rounds, shows Sling Hub's report

Carolina Pompeo

03.Dec.2021 08:31 BRT
UPDATED 06.Dec.2021 15:48 BRT

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As far as the innovation and venture capital investment ecosystem in Latin America is concerned, 2021 is being touted as the “year of records”. And those who expected that in November the VC injection in the region would slow down were wrong: the month not only reached a higher volume of dollars raised than in October, going from $1.2 billion to $1.4 billion, but the average round size jumped from $13 million to $31.9 million.

In October, there were 92 investment rounds in Latin America, while in November there were 76 of them: fewer rounds, but larger checks.

Thus, Latin American startups reach the final stretch of the year surpassing $1 billion in investments per month since February. For the sake of comparison, in 2020 this mark was surpassed only in September. These data are from the Startup Activity Report, issued by the Brazilian intelligence platform Sling Hub and obtained first-hand by LABS.

In this boiling scenario, with a lot of venture capital entering the region, Brazil continues to stand out, having secured 70% of the total volume tapped in November, or $988 million. The country also concentrated the vast majority of the mergers and acquisitions in November; only two of the 23 deals took place outside Brazil.

Rounds and unicorns

In all, there were 76 investment rounds in Latin America last month; 60 of them were held in Brazil and 10 in Mexico, followed by Chile (4), Colombia (1), and Argentina (1). The three greatest rounds, which together have gotten $576 million, more than 40% of the total investments in the entire region, went to Brazilian companies.

The fintechs took the lion’s share of the investments, there were 30 rounds focused on companies in the sector; edtechs received five rounds; HRtechs, retail techs, and healthtechs got four rounds each. Another 23 funding rounds went to startups in various sectors.

Although fintechs are still the favorite sector for investors, the greatest checks in November went to a retail tech – the Brazilian startup Facily, which raised $250 million, an investment that brings it very close to unicorn status –, and to a Brazilian edtech called Ânima Educação, which secured $176 million.

The club of Latin American unicorns has welcomed a new member, and it is a Brazilian fintech: CloudWalk. The company landed a Series C led by Coatue and reached a valuation of $2.1 billion.

Image: Startup Activity Report/Sling Hub

Local VCs led investments

When looking at the most active investors in November, there is an interesting change: if in October the largest investors (considering the number of rounds, not in volume invested) in Latin America were the Japanese group SoftBank and the US venture capital manager Tiger Global, in November this list was topped by local companies and venture capital funds: Kaszek leads with 6 startups invested, followed by Canary with 4, and by Norte Ventures, CapTable, and Valor Capital, the three tied with 3 rounds each.