Digitization trends in Latin America drew in a slew of investors in 2021, with private capital investments more than doubling in size compared to the previous year. Some $29.4 billion were deployed in Latin-American tech startups during 2021, up from a previous record of $16.8 billion during the last year. The increase in funding reflects a growing interest in the regional industry and a sign of maturity among various companies that are disrupting traditional sectors such as finance. Venture capital contributed to 54% of all private capital investments, with $15.7 billion inflows to LatAm startups reported last year.
Interest in Latin American tech startups had been growing in the previous years, attracting global players to the industry such as Softbank, Tencent, or Berkshire Hathaway. But the pace of flows accelerated dramatically over the past two years, as digitization trends during the pandemic fast-tracked various markets. During the year, 16 new unicorns were minted. That is startups that surpassed the $1 billion valuation threshold. These include Argentine financial app Uala, Brazilian e-commerce Madeira Madeira, Mexican digital lender Konfio, payments firm Clip, also cryptocurrency firms such as Bitso and Mercado Bitcoin. There was also vigorous activity for well-established enterprises. Online bank Nubank, one of the flagships in the fintech sector, tapped $750 million from private investors before going public by the end of the year in the New York Stock Exchange. There were some 258 transactions reported last year in the fintech sector, including a $250 million round by Mexican payments firm Clip. Retail lending and crypto saw the increased attraction, as Bitso and Mercado Bitcoin, together with Flink, all saw venture capital investments. Brazil continued to attract the most capital in the region, minting eight new unicorns and capturing 48% of the total money invested.