Latin America Startup Investment Trends in Q1 2025

The investment landscape for startups in Latin America experienced a sequential decline in the first quarter of 2025, largely attributed to reduced activity in late-stage deals. Despite this downturn, the funding levels surpassed those of the previous year, and early-stage investments showed encouraging growth.

Investment Overview

According to data from Crunchbase, total funding in the first quarter amounted to just over $800 million, encompassing seed to growth-stage transactions across Central and South America. This figure represents a 17% increase compared to last year but reflects a significant 35% decrease from the preceding quarter, which had witnessed strong late-stage fundraising.

Early-Stage Investment Highlights

Early-stage rounds proved to be the most resilient segment in Q1, garnering approximately $435 million. The fintech sector emerged as the frontrunner, attracting more than half of the early-stage funding. Noteworthy transactions included:

• Plata: A Mexico City-based startup, secured $160 million in a Series A funding, raising its valuation to $1.5 billion.
• Buk: This Santiago-based HR software provider obtained $50 million in a Series B round.
• Paytrack: A Brazilian company specializing in business travel and expense management, raised $40 million in Series B funding.
• Mendel: Located in Mexico City, this corporate expense platform raised $35 million in a Series B financing round.

Although early-stage investments thrived, seed funding faced challenges during this quarter. Initial reported numbers suggest a decline. However, it is anticipated that final figures will reflect a more positive outcome once all late-reporting seed rounds are accounted for.

Notable seed rounds included $8 million raised by Niko Energy, a solar startup, and $6 million for Neofin, a Brazilian B2B payment technology firm.

Late-Stage Investment Slowdown

In contrast, late-stage financing experienced a marked slowdown, with only $281 million raised in Series C and subsequent rounds in Q1. This amount, while still higher than last year, represents a reduction to about one-third of Q4’s totals. Key late-stage rounds included:

• Ualá: A digital banking startup from Buenos Aires, closed $66 million in Series E funding.
• Alice: A health plan provider based in São Paulo, secured a $22 million extension round.
• Turbi: This digital car rental service in Brazil obtained $12.5 million in Series D financing.

M&A Activity and IPO Landscape

Startup exits were somewhat subdued in Q1, though there were several notable mergers and acquisitions. Highlights include:

• The acquisition of Gringo, a Brazil-based vehicle care app, by Cambridge Global Payments for approximately $172 million.
• xFarm Technologies purchased Check Plant, a Brazilian agri-tech company.
• Cencosud acquired Vopero, a fashion resale platform based in Mexico.

On the IPO front, Q1 was relatively quiet, with no significant public offerings from venture-backed companies in the region.

Outlook Ahead

As we look forward, the potential for increased deal-making and exits remains, particularly as the year progresses and funding data continues to update. The current lull in activity in Q1 leaves ample opportunities for growth in the upcoming quarters.

Methodology

The insights shared in this article are derived from Crunchbase data, accurate as of April 2, 2025. It is essential to note that early-stage venture activity may reflect data lags, particularly at the seed level, with subsequent rounds gaining their final figures over time.

Funding Terms Glossary

The following definitions clarify the funding categories mentioned:

• Seed and Angel Rounds: Includes seed, pre-seed, and angel investments.
• Early Stage: Involves Series A and B rounds, as well as other rounds typically within $3–15 million.
• Late Stage: Comprises Series C and beyond, along with large corporate venture investments over $15 million.