Venture capital group Kaszek Ventures announced on August 29 that it has raised $600m from two new funds, providing a boost to Latin America’s growing start-up ecosystem. Kaszek Ventures is widely credited with a recent surge in start-up investment in Latin America where, in 2018 alone, investment skyrocketed to nearly $2bn.
Kaszek stated it had closed a $375m fund for early-stage companies, while another $225m will go towards supporting companies that are more mature in their development. Raised in about two months, the latest commitments will increase Kaszek’s total capital under management to approximately $1bn. It is the first local early-stage investor to achieve this.
Having once been overshadowed by their peers in Silicon Valley, Latin American entrepreneurs are now finding it much easier to raise capital
The venture capital group was launched in 2011 by Hernan Kazah and Nicolas Szekasy. The two had previously founded the e-commerce marketplace MercadoLibre, Latin America’s most highly valued tech start-up, before delving into the world of venture capital funding. Since its creation, Kaszek Ventures has invested in over 70 companies, with its portfolio centred in Latin America. Some of its most prolific investments include the digital bank Nubank, fintech start-up Creditas and shipping logistics platform Loggi.
Brazil has long enjoyed higher levels of financing and business growth compared with the rest of the region, but other countries like Colombia and Argentina are also now experiencing start-up booms. This trend can be partly attributed to the adoption of 4G across Latin America, which has facilitated the development of more tech companies. In addition, countries like Colombia have slowly experienced greater political stability and enjoyed increased affluence, which has led to the growth of the middle classes.
This growth has also been fuelled by a huge surge in venture capital funding. Having once been overshadowed by their peers in Silicon Valley, Latin American entrepreneurs are now finding it much easier to raise capital. Between 2016 and 2018, venture capital funding nearly quadrupled. Earlier this year, the region received its largest ever venture capital deployment in the form of a $5bn fund from Japan’s SoftBank Group. With Kaszek Ventures’ latest commitments, it seems that the time is now for Latin America’s start-ups.