Latin American venture, seen from London

1. Where the capital is

Venture funding in Latin America peaked in 2021, on the back of global liquidity and a handful of breakout companies that convinced international funds the region could produce venture-scale outcomes. The reset that followed was sharper than in the US or Europe. Three structural features of today's market follow from it.

First, capital has consolidated toward established managers. LPs that backed first-time regional funds in 2020–21 have largely retreated to names with a track record, which makes the fundraising environment for emerging managers the hardest in a decade — and makes any new fund's ability to show differentiated sourcing decisive.

Second, Brazil and Mexico dominate. Between them they take the large majority of dollars deployed in the region; Colombia, Chile, Argentina and Peru compete for the remainder, with Argentina periodically producing outsized outcomes despite its macro. A regional thesis that is not explicit about country allocation is not a thesis.

Third, unicorn creation has slowed to a trickle. This is not only a valuation story: the pipeline of companies at Series B and beyond thinned out, and exits through IPO have been essentially closed since 2022. Strategic M&A — regional banks, retailers, telcos, and US acquirers — is the realistic exit path for most of the current cohort.

2. What the last cycle taught

The 2021 cohort rewarded distribution and growth at any cost: neobanks, delivery, quick-commerce, B2C marketplaces. Many of those companies were built for a cost of capital that no longer exists. The lessons that survive: unit economics denominated in local currency need to be tested against a devaluation scenario, not a base case; regulatory arbitrage in one country is not a moat in another; and a cap table that has already absorbed several local rounds at inflated prices is a liability, not a signal.

3. What makes sense now

The categories worth underwriting in the current environment share a profile: they sell into the infrastructure or the balance sheet of large, slow institutions; they earn in dollars or in dollar-linked revenue; and they have a credible strategic acquirer set inside the region. The first memos on this desk follow that profile — cross-border payments and FX infrastructure, housing finance and proptech, and industrial and energy-transition software in the Andean economies. Each starts from a market the author has worked in.

4. Why European capital, why now

Three arguments. Nearshoring has moved manufacturing and services capacity toward Mexico and, increasingly, toward Colombia and Central America, and the operating software for that shift is being written now. Talent has become mobile: a growing share of Latin American founders are building from Madrid, Lisbon, or Miami, with a legal entity in Delaware and a team in São Paulo or Bogotá — which puts them within reach of European funds that have never flown to the region. And entry valuations, after three years of reset, sit well below what comparable companies command in Europe.

The gap is not capital. It is a map: who the local funds are, what a good cap table looks like, which regulators matter, and which exits have actually happened. That is what this desk is for.

5. What I look for

1. Revenue that survives a 30% devaluation of the local currency, either because it is dollar-linked or because the cost base devalues with it.
2. A wedge into a regulated or infrastructure-level workflow that is expensive to replace once embedded.
3. Founders who have already operated in the region, or a team that combines a regional operator with a builder.
4. A named list of realistic strategic acquirers, and evidence that at least one has bought something similar.
5. A cap table where the founders still own enough to matter after the next two rounds.

Changelog