One year ago, I published a post called “Is Winter Coming?“, where I asked myself if, after a lot of boiling and available capital for startups (especially in the early stages), finally an djustment is coming, especially in terms of access to financing for growth stages.
I believe that this year was not particularly bad in terms of access to capital. Seeing the amount of startups that have grown and raised capital, I still believe that access to capital is only one of the many challenges facing startups in Latin America, but is feasible for those startups focused on specific problems and are able to generate user and client traction.
Within our own investment portfolio at NXTP, in this last year various companies were able to raise more than US$5 million (ej.Jampp raised US$7 million in their funding round), from both LatAm investors and funds from the U.S. and Europe. These kinds of rounds were not very common in the first years of NXTP. One obvious conclusion: It generally takes time to build a business and the companies that go from seed round to a mega round in one year are, at best, a small minority.
In Brazil, despite the ups and downs and the economic adjustments, many startups continue to grow and raise capital, as in the case of Nubank with an investment from Sequoia, or EduK with Accel, both rounds reached more than US$10 million. Mexico remains attractive, not only because of the size of their local market, but also because of its proximity to the U.S., and the large amount of new capital funds that are active in the country. In the past few months, several startups in our portfolio have landed in Mexico and were strongly supported by their new Mexican investors.
My final conclusion is also very obvious: Financing a startup is a consequence of the attractiveness and company potential in the eyes of its prospective investors. The world keeps turning and the good investors keep finding good startups to invest in.
Winter or no winter, if you’re thinking of finding capital, do not be misled by the fads, sensations of the moment or tips of the gurus. Put yourself to work on building a potentially profitable, scalable business with clear growth opportunities. The rest is not easy, but it’s also not impossible.
Pro Tip: If you want to keep up on the latest funding rounds in LatAm, tune into the monthly column from Anna Heim on TheNextWeb.
This post was originally published on LatAm.VC