Tech roundup: Latin America could (but won’t) challenge Silicon Valley

Welcome to our Tech Roundup, where we bring you the biggest stories in technology and innovation in Brazil and Latin America. This week: Latin America’s innovation ecosystem has its own challenges, besides Silicon Valley comparisons.

Latin America could challenge Silicon Valley, but that doesn’t mean it will

Latin America has definitely caught the attention of international VCs and global investors over the past decade. However, several challenges and biases need to be overcome before the region can reach its full potential.

Why it matters. The comparison with Silicon Valley is not fair, nor should it be. Startups in the U.S. are still the top destination for global investment, followed by China and the United Kingdom. At the same time, venture capital investment in Latin America was down 73.3 percent year-over-year in Q1 2023, according to private capital association LAVCA, meaning that the fastest-growing startup ecosystem just over a year ago could now be one of the fastest-shrinking.

Uneven distribution. Late-stage funding has taken quite a beating over the last three quarters, accounting for no more than 40 percent of VC rounds. At the same time, venture debt has been on the rise, accounting for 51 percent (USD 395 million) of the capital invested in Q1 2023.

...