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Latin America: An Emerging Tech Region

2022 was a year of many changes for the Latin American technology ecosystem - the volume of fundraising decreased as the quarters progressed, and investment values decreased significantly. Foreign investors reduced investments in the region, while national players became more selective in their investment decisions.

Despite the current scenario of capital readjustment, slowdown in mega rounds and a vision focused on profitability as a priority, Latin America continues to be seen as one of the most promising emerging markets in the world, especially in terms of innovation and entrepreneurship.

The region offers great opportunities, especially in the medium and long term. Factors that are important for the success of startups, such as technology adoption, international opportunities and availability of venture capital, are already strong and have been growing consistently. Other factors that favor the region are:

Need for digital solutions - with the growing need for digital solutions, companies in Latin America are prone to experiment. Driven by a solid digital infrastructure and digital maturity in consumer behavior, more and more are adopting emerging technologies: 90% will increase their investments in this segment in the next twelve months.

Capital sophistication - the emergence of emerging funds and alternative capital instruments investing in technology signals an increase in capital sophistication and maturity. There is still a gap between early stage financing, led by regional funds, and late stage growth, led by international funds.

Network effect - network effects inspiring the next generation of entrepreneurs trained and mentored by successful and recurring players in the technological ecosystem. Globant, Rappi e Mercado Livre lead the way, having together created more than 450 technology companies that raised US$3.4 billion in equity capital.

Growing bankingization - even in the face of market uncertainty, verticals such as fintechs continue to prosper in Latin America, which is experiencing increasing bankingization, especially in Brazil.


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