Venture capital markets: All You Need to know

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Venture Capital markets with characteristics such as: high growth rates, openness to innovation, and policies that promote connection with other markets, which position them as, leaders in the industry.

In recent years, private equity has triggered economic transformation and stimulated more startups and ventures. Industry leaders are constantly growing and looking for continuous innovation, which drives their economy. 

Generally, they become a platform for new markets and represent the incursion of more institutional investors. 

Among the major Venture Capital markets, the United States stands out, with an investment of 149 billion dollars, according to DealroomHowever, it is not the only industry leader. 

You can also read: ¿Cómo obtener rendimientos en un fondo de capital privado?

These are other economies that are consolidating their leadership in venture capital, according to a Statista report:

  • China
  • Israel
  • Singapore
  • Canadá
  • favored 
  • Chile
  • Mexico 
  • Peru

Venture Capital markets have emerged as the current leaders, having bet on this investment vehicle over the past three years. This is due to the growth of investment in innovation since the COVID-19 pandemic. Following the health crisis, entrepreneurs began seeking new ways to meet market needs. As a result, 2021 has been the best year ever for the venture capital industry, with a global investment of $219 billion, according to Dealroom's The State of Global VC report. 

Private equity in recent years has become an important investment vehicle, especially Venture Capital. It provides ventures and startups with the investment they require. The provision of key resources such as expertise, networking, or mentoring has made it stand out. 

In 2023, global economic uncertainty meant that investment in the industry did not grow as expected. However, new opportunities have emerged to stimulate niche markets. According to Startup Blink's Startup Ecosystem report, technological disruption and innovative projects are the starting point.

Even conservative investorsincreasingly turn to this investment alternative due to its diversification benefits and attractive profitability. 

The entrepreneurial ecosystem has remained resilient since 2020, despite falling short of initial growth expectations. In 2023, global Venture Capital investment will reach $68 billionhighlighting the strength of the sector and its ability to adapt to adverse conditions. Moreover, the industry is expected to experience exponential growth in 2024due to renewed investor confidence and innovation potential. It is important to maintain objectivity and avoid making subjective assessments.

You can also read: Mejores sectores y startups para invertir de cara al 2024

Latin America, is on its way to becoming a leader, or is it already?

Latin America is becoming a leader in private equity, with venture capital investment reaching US$851 million in 2023,, according to TTR's report. 

This growth will be a result of the region's development and attractiveness to investors seeking sustained portfolio growth.

Brazil is the most favoredcountry for Venture Capital investment among the pillars of the region, followed by Chile Mexico has consolidated its position as the third most important, followed by Peru and Colombia 

Brazil and Mexico are the two most important economies for private equity investment, accounting for 80% of total investment in Latin America due to their talent and innovation in the ecosystem. 

Currently, emerging markets have a greater capacity for growth in venture capital, as they have become home to large companies such as Hotmart, Unico, Kavak, and Clip.This growth is due to the increasing number of startups in these countries. 

Companies in the region are focused on the following sectors: fintech, transportation, logistics, digital infrastructure, and e-commerce. They have become benchmarks for Venture Capital investment.

As a result of the efforts to detonate technological investment in the region, the main sectors in LATAM are: 

  • Artificial Intelligence
  • Fintech
  • Retail technology
  • Digital health

You can also read: ¿En qué invertir en tecnología en este 2024?

Mexico, why is it key for Venture Capital?

Innovation and technology have become industries that boost a country's economy and development. Therefore, Mexico has the potential to be a supplier for these industries in Latin America due to the talent that exists in the country.

According to AMEXCAP this industry continues to develop in the country thanks to the opening of new players. In the last year, 72 this industry continues to develop in the country thanks to the opening of new players.In the last year,

According to Statista data, Mexico in the industry Mexico is the third most innovative country in Latin Americadue to its maturity in the industry and variables such as human capital, research, and its entrepreneurial and political ecosystem. Statista data 

Since 2020,it has been considered an innovation hub in the region and a bridge between the Latin American market and the United States. Additionally, it is also considered a source of talent in the region. 

The investment of 13.4 million dollars in 2023 reflects the company's confidence in its ability to innovate. 

Challenges in the Mexican market

Sin embargo, existen retos en el país However, there are challenges in the country that need to be addressed in the context of the caution and the minimal opportunities that exist to promote entrepreneurship, such as: 

  • Generating certainty for investors 
  • Investment in digitalization or digital infrastructure 
  • Increasing the participation of local funds
  • Boosting the ecosystem 
  • Encourage the adoption of innovation 

The Private equity investors buscan mercados que ofrecen escalabilidad e innovación are looking for markets that offer scalability and innovation, providing diversification and profitability in their portfolios. 

In Mexico, various local funds aim to promote investment in ventures with high growth potential, that can have a positive impact on the country's economy.. For example, WORTEV CAPITAL is an impact venture capital fund dedicated toboosting business growth in Mexico. Our objective is to create an ecosystem for investors and entrepreneurs that produces a positive social and economic impact. 

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Estos son los principales países líderes en capital privado e inversión en innovación.

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