Since Q3 2021, central banks have increased monetary policy reference rates. Globally, there is a correlation between this increase and the slowdown of investment in Latin America.
Latam is going through one of the lowest periods in capital raising, with $406 million dollars. And the size of the average investment contracted by almost three times compared to the first quarter of 2022.
The Q1 2023 had a total of 178 equity rounds, 27% less than Q1 2022. The overall decrease was 36%.
There is still no defined trend in Latin America, as total investments in the first quarter of this year represent 40% of total investments in the first quarter of 2021. Therefore, it is reinforced that investments are characterized by being of earlier stages and smaller amounts.
Now, this trend observed in investments suggests that 2023 will be the second consecutive year with higher equity investment and higher number of early stage rounds. In Q1 2023 these types of rounds represent 81% of the total. On the other hand, Late Stages rounds (Series D+) had a decrease of 92% compared to Q1 2022.
An analysis by country shows a similar trend in capital raised (compared to the last quarter of 2022). Brazil is the leader, with more than $150 million at the end of Q1 2023, followed by Mexico and Chile with $96 million each. It is worth noting that Chile was the only country to show positive growth.
he industry with the highest investment is FinTech, however, it has had a 52% decrease in investments compared to the previous year's quarter. Industries such as HR Tech, IT and Gaming had a 100% growth.
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