Chilean VC fund Fen Ventures: ‘We see opportunities in various areas’

Chilean venture capital player Fen Ventures is on the hunt for investment targets in Latin America’s vibrant technology startup ecosystem.

The company, which recently launched Canada-registered fund Fen Ventures III, is seeking to pump up to US$80mn into 20-25 early-stage enterprises, with average investment of US$3-5mn in each.

“The sector is booming,” Fen Ventures managing partner Cristóbal Silva told BNamericas. “The amount of venture capital resources and money coming into Latin America is impressive. It has multiplied various times in recent years.”

Fen, linked to Chilean asset manager LarrainVial’s alternative asset arm Activa, has fintech, foodtech, software-as-a-service and logistics startups, among others, on its radar. “We see opportunities in various areas,” Silva said. 

In Chile – and reflecting a regional trend – venture capital was a driver behind headline dealmaking growth figures for January-October. Chilean venture capital deals grew 60% by number and 1,045% by aggregate value, according to data from research company Transactional Track Record.

Among recent transactions was a capital raise by Fen Ventures portfolio company Fintual, a fintech. Fintual secured US$39mn in series B funding, with the round led by US venture capital player Sequoia Capital. The investment by Sequoia was the first one it had made in a Chilean venture.

Another was a US$50mn capital raise by Chilean human resources software startup Buk, with the financing round led by US fund Greenoaks and Japanese telecom and internet group SoftBank.

For Latin America, the number of venture capital deals rose 48% as total aggregate value climbed 227%.

Silva (pictured) said: “The technological startup ecosystem is more active than ever, with the emergence of startups that are drawing the attention of investors that are seeking the new Chilean and Latin American ‘unicorn’.” 

Latin America has become a venture capital hotspot as investors in developed regions eye markets where there is a need for liquidity. Venture capital has also outperformed other asset classes in recent years.

“There is a lot of attention [being paid to the region], probably more foreign than local,” Silva said.

Chile is proving a particularly attractive target, as startups are typically conceived with the goal – on account of the limited size of the local market – of expanding into the region and beyond.