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Goldman Sachs, Citigroup Boost Lending to Latin America Startups

  • Selling equity became less attractive as stock prices declined
  • Asset-backed lending reduces banks’ risks, firms’ costs
A worker takes a break at the MercadoLibre fulfillment center on Black Friday in Sao Paulo, Brazil, on Friday, Nov. 26, 2021. 

A worker takes a break at the MercadoLibre fulfillment center on Black Friday in Sao Paulo, Brazil, on Friday, Nov. 26, 2021. 

Photographer: Jonne Roriz/Bloomberg

Banks including Goldman Sachs Group Inc. and Citigroup Inc. are stepping in with loans as Latin American startups face shrinking public valuations that make equity sales less attractive.

Small startups such as Brazilian fintech Agi, known previously as Banco Agibank SA, and Chile’s Xepelin Holdings SA, as well as bigger firms such as digital retailer MercadoLibre Inc. are among those receiving financing. More than $2.3 billion in loans have been made since November, with banks such as Morgan Stanley and JPMorgan Chase & Co. also participating, according to public data compiled by Bloomberg. Many transactions have been kept private.