Latin American startups collected over US$5bn in investments in 2023

Latin American startups raised US$5.75bn in 885 funding rounds in 2023, according to the annual report produced by SlingHub and Itaú BBA.

The 885 funding rounds was a 34% decrease compared with 2022, while the value was down 57%. The study also tracked 213 M&As (-31%). The average round size was US$1.4mn and the most common stage was Seed, whereas Series B rounds were the ones that raised the most money.

“Despite expectations of a challenging environment for venture capital in 2024, there's an undercurrent of optimism for a resurgence in fundraising,” wrote Itau BBA in the report, in which it claims to be “cautiously optimistic” about the year.

The top countries in terms of investments were Brazil (54% of the total), Mexico (25%) and Colombia (11%). By number of rounds, Brazil led with 55% of the total, followed by Mexico (13%) and Chile (10%).

The leading sectors were fintechs (28% of the deals), healthtechs (6%), retailtechs (5%), foodtechs (5%) and edtechs (4%) according to SlingHub. Financial technology accounted for eight of the top 10 funding rounds.

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In Brazil, KPMG tracked 1,505 M&As between companies – not only startups – in 2023. The numbers show a 13% year-on-year drop.

The distribution of deals throughout 2023 was as follows: 372 in Q1, 365 in Q2, 405 in Q3 and 363 in Q4.

The data is part of KPMG’s monthly dealmaking research and was conducted in 43 sectors of the economy.

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Simetrik, a Colombian B2B financial solutions provider, raised US$55mn in a series B round led by the growth equity area of Goldman Sachs Asset Management.

Other investors that joined the round are FinTech Collective, which led Series A, and Cometa, an early investor, as well as Falabella Ventures, Endeavor Catalyst, Actyus, Moore Strategic Ventures, Mercadolibre Fund and the co-founders of Vtex.

The capital raised will be used by Simetrik to finance investments in technology, including AI, and to expand its international reach, targeting major payments companies and consumer markets. 

Founded in 2019, Simetrik operates in 35 countries, monitoring more than 200mn financial records daily.

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Brazilian cloud services provider Skyone secured a 60mn-real (US$12mn) round led by Venture Capital Bewater to boost its presence in local and international markets.

The new funding is deemed a Series B extension. In 2021, the company had secured a 45mn-real Series B round led by Bradesco’s Inovabra Ventures.

“We are optimistic about the positive moment that Skyone is experiencing, and this investment from Bewater comes to further propel our movement to explore new possibilities in the data area,” Ricardo Brandão, co-founder and CEO of Skyone, said in a release.

The company plans to grow its workforce by up to 150 employees by year-end, focusing on development, support and market expansion. 

Skyone provides services in 20 countries and intends to explore new global markets.

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Agtech Bem Agro wrapped up its pre-Series A round and collected 10.2mn reais.

The round was led by CNHI, with participation from Rural Ventures, MMAgro and Agroven, and structuring by Arara Seed.

Bem Agro combines AI and computer vision to transform data from tractors, drones and satellites into agronomic reports.

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Sitehop, a British company specializing in cybersecurity, chose Brazil to begin its global expansion.

The company's plans for the country include an office in São Paulo, partnerships with distribution channels, hiring employees and, in the future, building a factory.

“We are excited about our arrival in Brazil due to the great local potential, especially in the communication infrastructure and connectivity markets,” business development director Krister Almström said in a release. 

“We expect to centralize our operations here as a springboard to other countries in Latin America."

The company received investments from NPIF-Mercia Investment and directed resources towards a future growth also in the US, India and Northern Europe. Sitehop offers encrypted, ultra-low latency data processing for cloud and telecom networks, with a focus on datacenters, telcos and the enterprise market. 

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Canadian payment solutions provider Nuvei launched direct acquiring services in Colombia.

The launch will allow partners in other parts of the world to process payments directly in the country without the need for additional intermediaries, said Nuvei.

The company claims to be the first global payment firm to receive such a clearance from Colombian authorities.

The launch allows a greater expansion of its business in Latin America, where it already operates in Brazil and Mexico, among other nations.

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Brazil's Banco Master acquired digital bank Will Bank, which reports around 6mn customers and a strong presence in the country’s northeast. The values involved were not reported.

With the deal, Banco Master becomes a leading shareholder in the neobank, which also has XP Inc. private equity fund as partner. XP’s executive Chu Kong remains on Will’s board, said Master.

Master’s client base will grow to 10.5mn retail customers with the takeover. Master said it plans to expand its customer base and the segments in which Will Bank already operates, such as credit cards and insurance products, and projects reaching 5bn reais in net equity by end-2023.