SAN FRANCISCO, Feb. 27, 2024 — Copec WIND Ventures, the strategic venture capital arm of Copec, a leading energy company in Latin America, today announced the results of its fourth annual survey of the venture capital community’s outlook on global growth markets outside of North America and Europe.
“In the ever-evolving landscape of global venture capital, Copec WIND Ventures’ fourth annual survey reveals a notable shift in sentiment since we started this survey in 2020, positioning Latin America as the preferred growth market for startups,” said Brian Walsh, head of WIND Ventures. “We believe the surge in optimism for Latin America’s innovation landscape underscores the region’s tech-enabled transformation.”
Latin America dethrones China as top growth market in the eyes of VCs
According to this year’s survey, VCs’ view of which markets are best for startup expansion outside of North America and Western Europe has evolved dramatically. In 2023 Latin America (LatAm) came out as the best growth market, with 37% of VCs choosing the region as the most compelling, while only 13% believe that China is the most compelling. This is a shift from the 2020 survey that indicated China was the best with 37% and LatAm with only 8%.
VC sentiment is also shying away from Southeast Asia as an attractive startup growth market with interest dropping 51% from 2020 to 2023.
Market size viewed as most important aspect when considering new regions
For the past four years, VCs have defined attributes most important when expanding to a new region as large market size and high rate of tech adoption. There was a significant increase in perception amongst venture capitalists that Latin America has these growth elements (33%), while sentiment on China (13%) and Southeast Asia (7%) decreased.
Fintech viewed as hottest area of investment in LatAm, climate tech lagging
The research also honed in on specific sectors that continue to show promise, with 51% of VCs surveyed indicating fintech will remain the hottest investment area in LatAm, while climate tech and energy came second and third 17% and 15%, respectively, highlighting the need of getting new energy and climate solutions into emerging markets where they are urgently needed.
For startups expanding to Latin America, VCs have consistently perceived political risk as the key challenge
The primary perceived challenge for startup expansion into Latin America is perceived by VCs to be political (89%). Since 2020, however, VC perception around economic or cultural risk to startup growth in Latin America has consistently improved year over year with both improving approximately 9% since 2020.
“The Latin American region’s potential for explosive technology adoption is driven by the region’s digital transformation and a total market size larger than that of the United States – 650 million people – and it is great to see investor perception continue to acknowledge this”, said Brian Walsh, Head of Copec WIND Ventures. “We look forward to continuing our work in helping global startups capture the vast opportunities in the dynamic Latin American markets.”
In the Fall of 2023, WIND Ventures surveyed 50 venture capitalists from a diverse cross-section of professionals, including venture capitalists and corporate venture capitalists. While the majority (53%) of those surveyed were early-stage investors, 32% were seed-stage investors, and 15% were growth investors.
The full findings can be found here: https://bit.ly/3SL10s6
About Copec WIND Ventures
Based in San Francisco, Copec WIND Ventures is the corporate venture capital (CVC) arm of Copec, one of the leading energy, mobility, and retail companies in Central and South America and one of the most valued brands throughout Latin America. WIND Ventures leverages Copec’s significant resources to accelerate growth, primarily within Latin America, for startups and scaleups across the world within the new mobility, energy, and retail sectors. Visit windventures.vc or follow us on Linkedin and Twitter.
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SOURCE Copec WIND Ventures
