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Endeavor’s Allen Taylor (Director, Global Network) joined Latin America Venture Capital Association (LAVCA) President Cate Ambrose and Americas Venture Capital Conference Co-Chair Irma Becerra-Fernandez in discussing fundraising trends, deal growth, and imperatives for continued investment growth in Latin America in a panel entitled “Prospects for Private Equity & Venture Capital in Latin America: The Year Ahead.” The panel was hosted by Endeavor Global Advisory Board member Juan Pablo Cappello, a senior partner in the Miami office of Greenberg Traurig. Click here to view the presentation; click here to listen to the webinar recording.
As the panelists discussed, Latin America is experiencing unprecedented interest and record-breaking investment growth. Global investment firms have a very favorable view of Latin America compared with other emerging markets, and expect to increase investment in coming years. Panelist input and data from LAVCA’s recent survey of 200+ private equity and venture capital firms in Latin America highlight the following trends, among others.
More Funds Raised, Bigger Deals
2010 was a record-breaking year for Latin America, with $8.1 billion in funds raised, and 2011 is looking to be an even bigger year. Deal size increased significantly, with the dollar amount growing by 120% compared with 2009 and the number of deals above $100 million doubling. Despite claims that Latin America could be “overheating,” panelists asserted that it is a young, developing region and investors there face a less crowded, competitive market compared to other global markets.
Investments Focused on Growth and Expansion Phases
Allen Taylor observed that investment in Latin America is more focused on private equity than on true, early-stage venture capital—which is the type of investment most Endeavor Entrepreneurs seek. LAVCA’s data confirms that more than half of 2010’s deals invested in companies in the growth or expansion phases, while only 18% of deals focused on early stage or seed investment. However, all three panelists shared optimism that this number is growing. Allen added that while Endeavor companies are technically “early stage” based on the amount of money they raise, they are already successful and growing organically in their countries.
Government Support Critical
In addition to their highly innovative entrepreneurs, many Latin American countries are popular with investors because of their favorable business environment and governmental support of entrepreneurship. Compared with other emerging markets, Latin America is an increasingly user-friendly, familiar, welcoming environment for private equity and venture capital firms. Panelists all agreed that continued governmental and regulatory support is critical for future growth.
Click here to view the presentation; click here to listen to the webinar recording.
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