New Economy Forum
Latin America’s Unicorns Face a Reckoning as VCs Flee Risk
The region’s startups are watching investors pull out, after committing an unprecedented $16 billion in 2021.
This article is for subscribers only.
For a hot second there was no better place for entrepreneurs seeking financing than Latin America. Startups based there raised $16.3 billion last year—more than the entire preceding decade—making the region the world’s fastest-growing for venture funding. But just as quickly as the money poured in, it’s drying up.
Investors are pulling out of risky bets everywhere, with central banks unwinding decades of stimulus to tackle runaway inflation. And Latin America is among the riskiest regions—an emerging market plagued by volatility, reduced liquidity, red tape, and political upheaval.