Venture Capital in Mexico fell 42.49% in the third quarter of 2022: TTR

Investment funds and accelerators and incubators have invested 2,171 million dollars, in the initial stages of startupsin Mexico, during the first nine months of the year, according to the platform Transactional Track Record (TTR).

The added value of Venture Capital investment in startups based in Mexico fell 42.49%, as of the third quarter of 2022, after achieving a growth of 16.95 percent in the last quarter.

The new fall confirms the break in the growth trend experienced by investment in startups ─mainly in those with a technology and financial base─, during much of 2021.

Since the last quarter of 2021, when Venture Capital fell 47.96%, and throughout 2022, except for the second quarter, when it grew 16.96%, venture capital investment has shown consistent declines, according to TTR.

The new scenario of decrease corresponds to the reduction of investment in technology-based startups in Latin America. according to the platform Tracxnthe investment of Venture Capital in the Latin American region has gone from 5,560 million dollars, in the third quarter of 2021, to 800 million dollars, in the third quarter of 2022.

Urbvan and Clara

During the third quarter of 2022, the total added value of Venture Capital in Mexico was 405 million dollars, a reduction of 57.41% compared to the same period in 2021, when startups in Mexico received up to 1,778 million dollars.

The number of transactions within the venture capital investment sector has also been falling throughout 2022. From January to March, the number of transactions fell 4.08%; from April to June, it fell 4.26%, and from July to September, transactions fell 37.78 percent. In Latin America, quarterly transactions have also dropped from around 130 in the third quarter of 2021 to 79 in the third quarter of 2022, according to Tracxn.

The main transactions of the quarter, according to TTR, were the credit line for 150 million dollars offered by the US bank Goldman Sachs to the Mexican unicorn Clara and the investment of 50 million dollars that allowed the fintech Stori to become the ninth Mexican unicorn.

Another relevant transaction for TTR was the acquisition by the Saudi company Swvl of the Mexican transportation startup Urbvan, for around 82 million dollars, one of the largest exits in the world of startups in Mexico.

In the case of the Latin American region, Tracxn highlights the series C for 35 million dollars raised by Argentina Geopagos last August and the series A for 12 million raised by the Mexican Plerk, also last August.

rodrigo.riquelme@eleconomista.mx