venture capital investment o Venture capital in Mexico grew at a much slower rate in 2022 than in 2021. According to the transactional track record, companies based in Mexico have raised a total of $2,513 million through November 2022, down 40% from the year before. (TTR) platform.
After the party that 2021 experienced, total investments from venture capital exceeded $4.5 billion, representing a 240% increase compared to 2020, the key to entrepreneurial capital has turned a bit off. However, the sector saw double the investment of 1,200 million injected in 2020.
The number of venture capital transactions made in Mexico saw a decline of 3.2% during the year, that is, although there were roughly the same number of investments and exits in the sector, their volume was much lower than before. 2021. Investments throughout the year focused on startups dedicated to software, financial services and technology and internet services.
Whereas between 2020 and 2021, seven Mexican startups became unicorns, namely, private companies valued at more than $1,000 million: Fungi, Bitso, Clip, Konfio, Marama, Clara and Encode; During 2022, only two companies based in Mexico reached this category: Noports and Story.
The departure of Colombian company Mercio from Mexico and the beginning of a series of layoffs among startups, both in the country and in the Latin American region, was the first sign that the investment tap was turning off and the beginning of a complicated macroeconomic situation, characterized by a high inflation and the resulting increase in rates by central banks globally.
In June 2022, Vincent Speranza, CEO of Endeavor in Mexico, said that although Latin American unicorn startups were valued at an average of 18 times their annual revenue, which reached $150 million, it was to be expected that valuations and levels The investment will be recalibrated during the second half of both the years.
layoffs and loans
Bitso, Plerk, Ula, CloudTend They are among the startups that cut staff to mitigate the effects of low investment and macroeconomic conditions. App-based passenger transportation platform Beat, one of its competitors to Uber and Didi, announced departures from Mexico and other Latin American countries last November.
Despite announcing an unprecedented expansion for a Mexican startup towards Chile, Colombia, Peru and Turkey, through investments of $180 million, and later into the United Arab Emirates, Oman and Saudi Arabia for another $130 million. Despite entering with, the company recently announced mass layoffs that included its director in Mexico, Alejandro Guerra.
In addition to cutting expenses through staff reductions, Kavac signed a deal in September with Goldman Sachs, HSBC and Santander banks to raise $810 million in financing, a strategy known as venture debt. An investment model through which startups receive capital. Exchange for a part of their shares, which can be recovered by the entrepreneurs after loan payment.
After experiencing a venture capital funding party never seen in Mexico or Latin America, startups are preparing for leaner times.