Skip to main content

Latin American startup deals see major drop in COVID-19 era

Over the last number of years, Latin America has emerged as a significant growth market for big tech, including Uber, Airbnb, Amazon, Facebook, Coursera and others.

It has also become a growing and vibrant homegrown startup ecosystem. The region has sprouted 19-plus unicorns, several exits and even a billion-dollar, single-round financing. The coronavirus pandemic, however, is having an outsized impact on Latin America’s startup activity compared to other regions, judging by Q1 2020 activity numbers — and this is just the beginning.

When including the U.S., Western Europe (WEU), U.K., China and Latin America, the global startup innovation landscape experienced a 27% drop in Q1 2020 in terms of the number of deals completed compared to the previous quarter. Giving some comfort to venture capitalists and startup founders alike is that the amount of invested capital remained essentially constant. The average deal size increased across these regions — up a matching 27%. So, from a global perspective, the venture capital community did fewer but larger deals, on average, during the quarter where COVID-19 started wreaking major havoc in the economy.

Looking at each of these innovation hubs individually, we see different levels of impact from, presumably, COVID-19 between Q4 2019 and Q1 2020. Deal count for the U.S., WEU and U.K. each went down approximately 20% each. Fairly modest, all things considered. China’s deal count, however, suffered almost a 50% drop while Latin America’s deal count went down almost 60%.

We also see a stark difference between these regions from an invested capital perspective. The U.S., WEU and U.K. each invested approximately 28% more capital in Q1 2020 as compared to Q4 2019, while China’s and Latin America’s invested capital both went significantly down. China deployed a bit over one-third less capital and Latin America deployed a very significant two-thirds less.



from TechCrunch https://ift.tt/2W7Q6zv
via IFTTT

Comments

Popular posts from this blog

Max Q: Psyche(d)

In this issue: SpaceX launches NASA asteroid mission, news from Relativity Space and more. © 2023 TechCrunch. All rights reserved. For personal use only. from TechCrunch https://ift.tt/h6Kjrde via IFTTT

Max Q: Anomalous

Hello and welcome back to Max Q! Last week wasn’t the most successful for spaceflight missions. We’ll get into that a bit more below. In this issue: First up, a botched launch from Virgin Orbit… …followed by one from ABL Space Systems News from Rocket Lab, World View and more Virgin Orbit’s botched launch highlights shaky financial future After Virgin Orbit’s launch failure last Monday, during which the mission experienced an  “anomaly” that prevented the rocket from reaching orbit, I went back over the company’s financials — and things aren’t looking good. For Virgin Orbit, this year has likely been completely turned on its head. The company was aiming for three launches this year, but everything will remain grounded until the cause of the anomaly has been identified and resolved. It’s unclear how long that will take, but likely at least three months. Add this delay to Virgin’s dwindling cash reserves and you have a foundation that’s suddenly much shakier than before. ...

What’s Stripe’s deal?

Welcome to  The Interchange ! If you received this in your inbox, thank you for signing up and your vote of confidence. If you’re reading this as a post on our site, sign up  here  so you can receive it directly in the future. Every week, I’ll take a look at the hottest fintech news of the previous week. This will include everything from funding rounds to trends to an analysis of a particular space to hot takes on a particular company or phenomenon. There’s a lot of fintech news out there and it’s my job to stay on top of it — and make sense of it — so you can stay in the know. —  Mary Ann Stripe eyes exit, reportedly tried raising at a lower valuation The big news in fintech this week revolved around payments giant Stripe . On January 26, my Equity Podcast co-host and overall amazingly talented reporter Natasha Mascarenhas and I teamed up to write about how Stripe had set a 12-month deadline for itself to go public, either through a direct listing or by pursuin...