Latin America is one of the world’s most dynamic emerging regions for entrepreneurship, yet also one of the most misunderstood. To help unpack what makes these ecosystems unique, and what international investors should know, we spoke with Gus Álvarez, an entrepreneur, operator, and angel investor with more than a decade of experience building entrepreneurial ecosystems, as well as companies of his own and advising others across the region.
What Makes Latin America Unique
Over the past two years, venture capital in Latin America has shown clear signs of recovery after the 2021 correction. Startups across the region raised around USD 4 billion in 2023, while 2024 saw investment volumes rise 26% year over year. Despite persistent global uncertainty, this rebound highlights a renewed appetite for risk capital and a maturing investor base eager to reengage with the region.
Latin American founders operate in environments that are far from frictionless. Infrastructure remains uneven, large segments of the population are unbanked, and public systems like healthcare and education struggle to meet demand.
But, as Álvarez notes, these structural gaps also define the region’s investment opportunities:
“Latin America’s greatest opportunities lie within its greatest deficiencies — in financial inclusion, insurance, healthcare, education, mobility, supply chain, and connectivity. Each shortfall represents not just a market gap, but an invitation to create meaningful solutions.
For entrepreneurs in the region, this is more than opportunity — it’s responsibility. Entrepreneurship without purpose is empty ambition; entrepreneurship grounded in a mission to close gaps and uplift lives is genuine virtue.
The true north of entrepreneurship in Latin America should be social wellbeing, not investor enrichment. Profit and growth are necessary outcomes, but they must remain in service of a greater goal: to build companies that improve people’s lives while helping bridge the distance between what governments cannot yet achieve and what society urgently needs. Founders in this region have the mandate to act as changemakers — to build ventures that elevate communities, create dignity through work, and turn business into a force for collective progress.”
Fintech has been the fastest-growing response, helping millions access credit and payments for the first time. E-commerce, accelerated by Mercado Libre, Amazon, and new omnichannel models, has also transformed consumer behavior, powered by a growing middle class eager to transact online. Not only has E-commerce grown fast, it has inherently demanded the sophistication of value chains throughout the supply chain, impacting sub-sectors such as storage, freight, procurement and last-mile solutions.
Strengths and Weaknesses for Global Investors
For investors abroad, the region combines scale and innovation. Young, tech-savvy populations are driving rapid adoption, and entrepreneurs are tailoring products to local realities.
At the same time, the barriers are real. Markets are complex and often unfamiliar, with adoption outside major cities still limited. Regulatory environments can be burdensome in certain markets such as Peru, Bolivia, and Argentina. More stable ecosystems, including Mexico, Brazil, Chile, and Colombia, offer investors an opportunity to mitigate that uncertainty, as these countries tend to maintain more predictable business and policy frameworks.
“The main obstacle is understanding the market. Emerging economies like ours don’t resemble the developed ones, so investors need trust in local founders and truly understand the problems they’re solving.”
Álvarez emphasizes that diligence must go beyond numbers: investors should focus on founder resilience, what’s the mission they are choosing to work towards, their backgrounds, the local context, and the networks they have access to.
Country-Level Dynamics
Not all ecosystems look the same. Brazil is a market unto itself, with deep talent pools and a large internal economy. Mexico’s size and proximity to the U.S. give it weight, though regulation and access remain uneven. In fact, Mexico overtook Brazil in the first half of 2025 as the region’s largest recipient of venture capital, the first time it has led in nearly fifteen years. Argentina, despite volatility, maintains high innovation capacity and a cultural confidence shaped by European influence. Chile and Colombia, while smaller, continue to stand out for their regulatory stability and policy innovation.
Network effects also matter. Just as Silicon Valley produced the “PayPal mafia,” Latin America has its own, Mercado Libre, Rappi, and others whose alumni continue to seed the ecosystem with new ventures.
Signs of Maturity
How can investors tell when a local ecosystem is ready for capital? According to Álvarez, there are clear signals:
- Institutions, both public and private, supporting entrepreneurship.
- Availability of local venture capital and active angel networks.
- A robust talent pipeline with both technical and business expertise.
- A regulatory framework that gives investors certainty, Mexico’s fintech law being a prime example.
These signals are starting to take shape across the region. Early-stage rounds (pre-seed and seed) represented 54% of total investment volume in the first half of 2025, showing a solid foundation for future growth. Yet conversion from seed to Series A remains limited, as investors increasingly prioritize unit economics and disciplined execution. In short, capital, talent, institutions, and regulation must align.
Opportunities Investors May Be Missing
Venture capital activity across Latin America remains concentrated in fintech, which still leads by total volume even as growth moderates and markets mature. At the same time, new sectors are gaining traction, particularly healthtech, insuretech, and B2B SaaS, which are attracting increasing investor attention as the region diversifies.
So where should investors look today? Álvarez points to several areas.
Growth-stage companies
Many Latin American startups are ready for Series A/B funding but lack local capital depth.
B2B and AI solutions
Traditional offline businesses are migrating to digital, creating demand for efficiency tools and data-driven platforms.
Sector-specific innovation
Fintech remains dominant, but healthtech investments increased 37.6% in 2024, reaching USD 253.7 million, even with fewer rounds (56 vs. 71 in 2023).
AI, data, and finance convergence
AI adoption in Latin America is projected to grow at a 26.7% compound annual rate through 2030. In healthcare alone, the market is expected to expand from USD 0.47 billion in 2024 to USD 3.78 billion by 2033.
Learning from Failure
Failure remains stigmatized in many parts of the world, but Álvarez argues it is indispensable to building stronger ecosystems.
“The biggest mistake is to glorify success stories without acknowledging the failures that led there. In entrepreneurship, failing faster means learning faster, and that perspective is critical.”
Across Latin America, cultural shifts are underway to reframe failure as part of the entrepreneurial journey. One example is Fuckup Nights, a global movement born in Mexico where entrepreneurs publicly share stories of projects that failed.
Álvarez sees this change as vital: founders who have failed and learned tend to make sharper, more disciplined decisions. He recalls ventures derailed by external shocks, misaligned partners, or chasing the wrong metrics, lessons that later shaped his approach to sustainable growth.
Investor Takeaway
Latin America is not simply replicating Silicon Valley. Its entrepreneurs are tackling endemic problems with models designed for local realities. For investors willing to engage with that complexity, and to back founders who embody both discipline and resilience, the region offers fertile ground.
References:
LAVCA (Latin American Venture Capital Association), 2024 Industry Data & Analysis
Reuters, Investments in Latin American startups up 26% in 2024, set to rise again in 2025 LAVCA, Startup Ecosystem Insights 2025
LAVCA, 2025 LAVCA Industry Data & Analysis
The Rio Times, Healthtech Investments in Latin America Jump 37.6% in 2024, Brazil Takes the Lead
Valio Ventures, AI in Latam Market: Growth, Investments, and Opportunities
IMARC Group, Latin America AI in Healthcare
