MEXICO CITY: According to a study released on Tuesday, capital raised for startups in Latin America increased by 26 per cent in 2024 compared to 2023, outpacing Europe’s growth of 7 per cent and Southeast Asia’s decline of 34 per cent. The report from the Mexican entrepreneurship network Endeavour and the private equity firm Glisco Partners states that funding for Latin American startups is projected to rise in 2025 due to a youthful demographic, rapid digital advancement, and more advanced capital. The research indicated that the sector continues to encounter difficulties due to limited involvement of local investment funds in later-stage financing and worldwide volatility.
"2024 became a year of reevaluation." "Startups that successfully adjusted to market changes now possess more robust and sustainable models," stated Alfredo Castellanos, managing partner at Glisco Partners. The report observed that local investors usually invested early, whereas foreign investors tended to invest once companies became more established and scalable. Investments in established companies, rather than startups, are becoming more prevalent. These investments accounted for 65% of the total capital raised in 2024, versus 46 per cent in 2023. "The report stated, 'There are fewer rounds, but increased capital.'"
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The report recognised three primary trends through 2025, highlighting the utilisation of venture debt and hybrid rounds that merge equity and debt as alternative investment methods. Furthermore, annual expansion in secondary markets - where investors trade shares among themselves instead of purchasing directly from the company - was expected to increase by 60 per cent, providing early-stage investors with a means to attain liquidity. Ultimately, it discovered that employee stock ownership plans were becoming a more important strategy for attracting and retaining talent; however, fewer than 20 per cent of startups in Latin America provided them to their employees because of uncertainty regarding the financial effects.
According to the report, financial technology companies continued to be the sector attracting the most investment in Mexico, with property technology startups and software firms expanding at the quickest speeds. According to the study, Mexico and Argentina emerged as significant beneficiaries in the resurgence of venture capital across Latin America in 2024. According to the study, Mexico showcased substantial funding rounds with startups Clip and Justo, which have sustained a "steady influx of investments." According to the report, Uala, a financial services firm from Argentina, secured $330 million, representing 73 per cent of the total capital raised in the country. "The area is moving towards a more robust ecosystem, but needs to enhance its local funding in the later phases," it noted.
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