Seed to late-stage funding has reached a bottom of $1.1B in H1 2023, marking an 83% decrease YoY.
Aluna Partners has seen investor interest picking up with high quality companies.
Eventhough, venture capital investment volume has decreased significantly across Latin America in H1 2023. Aluna Partners has seen investor interest picking up with high quality companies.
The venture capital market has reached a bottom of $1.1B sudiring H1 2023 for seed through late-stage ventures and marking an 83% decrease YoY. In line with the recent trends,the European and US markets have also suffered a 66% YoY and 49% YoY drop, respectively.
Late-stage financing has experienced the largest drop (-79% YoY). On the other hand, early-stage investments have shown signs of resilience, with several notable funding rounds this year such as Digibee (62M USD Series B) and Ceibo (30M USD Series B). However, prominent investors who have been historically active in the region are now participating in fewer transactions, but with higher AUM focusing on growth stage companies. Latin America experienced rapid growth in venture funding in 2021, attracting a record of $19B in new capital injection. Although we expect the current headwinds to persist in the short-term, we believe there is room for further growth in the Latin startup ecosystem.
The European and North American market followed the same negative trend as LatAm, even though the decline was slightly less marked. Rising interest rates, high inflation and slow economic growth are some of the factors affecting investment activities across the board, with the risk reward trade off at the forefront of LPs decision making process. Furthermore, rising geopolitical uncertainty driven by polarization of political parties, could make a significant difference for LPs and GPs at the time of cherry picking countries to invest in.
Aluna Partners is an investment banking boutique based in London that provides venture financing solutions to scale up companies in the LATAM region. Our non-dilutive capital solutions support technology companies in times of uncertainty. Aluna understands the Latin American market and has been a reliable advisor in different transactions, among them Carryt and Rocketfy.