Funding for Latin America’s Unicorns Vanishes as Venture Capital Pulls Back
- Venture investments for late-stage companies falls 92%
- Startups turned to debt, borrowing $1.3 billion from banks
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The deluge of venture capital that poured into late-stage Latin American tech companies in recent years has dried up, forcing some of the region’s most promising startups to fire staff, rethink growth plans and turn to bank loans for funding.
After a series of record years in which investors minted more than two dozen companies valued at $1 billion or more, venture capital has all-but vanished for more-established startups. Late-stage funding plummeted 92% in the third quarter compared to the same period a year ago, according to the Association for Private Capital Investment in Latin America, or LAVCA.