A new report issued by LAVCA, the Association for Private Capital Investment in Latin America, has found that the venture capital (VC) investment in the region has grown immensely compared to the previous year’s numbers. Overall, investments in the region totalled more than $15billion. This is three times more than the 2020 figure. Crypto and Blockchain investments increased almost tenfold.
Crypto outpaces Conventional VC Investments at Latam
LAVCA (Association for Private Capital Investment in Latin America) has released a new report that details the rise of venture capital in Latin America and the level of interest these firms have in crypto in 2021. According to the report, the region saw a significant increase in venture capital investment. This was more than triple the number of investments made the year before. LAVCA raked in $4.14Billion in VC investment in 2020, despite being afflicted by the coronavirus pandemic. The influx totaled $15.7 billion in 2017.
The investment rates for more traditional sectors, such as defi and blockchain, outperformed those made in cryptocurrency, crypto, and other sectors. These investments grew almost tenfold over the amount that was registered for the sector in 2020 ($68 million), according to the report. This is due to the growing interest in alternative investment vehicles by consumers.
The largest volume was recorded by the fintech industry, which saw $6.1 billion in 258 transactions. This is almost four times the growth rate of 2020.
Large Growth, Few Companies
It was impressive to see the industry grow in Latam, but it was concentrated in just a few companies who control cryptocurrency on the continent. Sixteen-fifths of the $653million investment went to four businesses in funding rounds.
Mercado Bitcoin was one of three major cryptocurrency exchanges within the region. They received an allocation totaling $290 Million in funding round 3. Bitso, an investment platform based in Mexico, has received $250m. Ripio (an Argentinian platform that was funded by DCG) and Lemon Cash ($17.3 million each were the other big platforms that VCs invested.
There are many options for crypto investments in the region, but they go beyond consumer trading and exchange platforms. The report states that there have been other investments directed to the B2B (business-to-business) services sector during these first months of 2022. Liqi (with $5.5million in investments), Gavea Marketplace (5 million) and Agrotoken (5 million).
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