Even though the Argentine government announced the biggest slide in the country’s economic output in nearly a decade, technology investors in the nation’s capital are all gearing up for years of record fundraising.
Three of the country’s largest companies (which are still small by international standards) are raising exponentially larger new funds, a sign that tech companies are showing promise despite the grim picture painted by the broader economy in Latin America.
Leading the pack is NXTP Laboratories, the early-stage investor that is building a regional network of accelerators and seed investment funds through partnerships that stretch from Mexico City to Montevideo and from São Paulo to San Francisco. Despite its regional reach, NXTP is headquartered in Buenos Aires and is where the company began accelerating and investing in start-ups in 2011.
NXTP has already had 13 releases, according to Crunchbase, and is perhaps the most mature investment firm in the country. He also seeks to be among the greatest as he capitalizes on this track record exits and an investment portfolio that has raised follow-on capital of nearly half a billion dollars.
The company is currently knocking on doors to raise $120 million, a significant step up from its previous investment vehicle of $38.5 million.
NXTP Labs isn’t the only Argentina-based company looking to significantly increase its capital under management. Jaguar Venturesa company that invests in both Argentina and Mexico, and draped swana Buenos Aires-based investment firm focused on Argentina, has already raised about $30 million of the $60 million it has targeted for its new fund.
While Cygnus is very focused on the early-stage Argentinian opportunity (which makes sense given the track record of tech companies exiting the country – and the capital behind the company), NXTP and Jaguar have more of a regional perspective. And Jaguar is also massively increasing the size of its fund.
While its first fund was just $10 million, the new one will be closer to $60 million, according to a person familiar with the company’s plans.
Behind renewed confidence in the region’s tech fortunes, despite the economic turmoil that continues to rock the region, lies a growing balance sheet of valuable companies – all with a base in Latin America’s largest market.
And while Brazil remains the region’s undisputed economic powerhouse, there are a growing number of tech giants from Mexico, Argentina, Colombia and Chile, investors said.
As Gonzalo Costa, co-founder of NXTP Labs wrote in an op-ed for TechCrunch earlier this week:
For the first time, the companies are raising funding rounds of more than $100 million. 99 (acquired by Didi Chuxing), Nubank and Rappi, have all raised mega rounds in the past two years. Others have raised large rounds, such as Selina and Movile, with over $90 million, or Auth0 (part of our portfolio), with $50 million rounds in 2018. But increasing amounts in dollars is not only due to mega towers. More than 30 deals of $3 million or more took place in 2017, triple the number of rounds of that figure compared to 2016. This shows a maturity of the market never seen before.
Not only are companies attracting more capital, but entrepreneurs are launching businesses in a dizzying array of tech sectors.
These are companies like NubiMetrics, which provides analytics and competitive data for marketplaces such as MercadoLibre; Where Satellogicwhich is developing a network of Earth observation satellites (and raised $27 million last year); Where Rural Pagowhich provides financing options for Latin American farmers (and raises $20 million, sources say).
It’s clear that venture capital and technology in Argentina (and all of Latin America) are having a moment. But with a broader base of local capital, it’s possible this moment could turn into a movement. And it would have a profound effect on economies around the world.