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It seems the downturn in the venture capital markets took a break in Latin America in May. After the amount of funding invested in companies in the region dropped in January, the ecosystem turned the situation around and raised $1,35 billion last month.

According to research from data platform SlingHub, investments in the region grew 61% in May compared to April ($934 million) and 15% over the same period last year. In addition, three Latin startups became unicorns over the last 30 days.

The growth was mainly attributed to investments in fintechs and proptechs, which together raised $682 million – more than half the total amount of VC capital invested in the region. Proptechs were the highlight of the month, stealing fintechs’ spot as the most relevant sector in terms of investment.

According to SlingHub, proptechs had its best monthly result since March 2021, when Brazilian unicorn Loft raised $425 million in a Series D round. In May, companies that use technology for the real estate market raised $367 million across nine rounds.

On the other hand, fintechs raised a total of $315 million. According to the survey, among the ten largest rounds of May, three were from fintechs.

Although the favorable results in terms of investments, the number of mergers and acquisitions dropped significantly. The study shows 17 acquisitions and only one merger. A pool of 13 Brazilian startups were acquired in the period, including four fintechs. This is the lowest result since June 2021, when only 16 transactions were registered in Latin America.

New unicorns

The highlight of the month was Habi, a Colombian real estate platform for buying and selling apartments. The company raised $200 million in a Series C round and became one of the three new unicorns on the block.

Brazilian fintech Dock is another company that joined the billion-dollar club. The banking as a service (BaaS) startup raised $110 million in a round led by managers Lightrock and Silver Lake, which increased its valuation to $1.5 billion.

The third unicorn to emerge is Mexico’s logtech Nowports, which raised $115 million in a Series C round led by the SoftBank Latin America Fund. The round valued the company at $1.1 billion.

With the new billionaire companies, May equaled the total of new unicorns in the entire first quarter. Until then, only Technisys, Neon and Betterfly had reached the billionaire status this year.

Brazil is still the leader

Brazil continues to concentrate most of the VC investments in Latin America. The country was responsible for 52% of the amount raised in May, raising $692 split into 48 startups.

Despite leading the ecosystem and having a result 80% higher than the $383 million registered in April, in the annual comparison Brazilian companies raised 8% less than in May 2021.

Colombia won the silver medal. Its companies raised $213 million with just three rounds, accounting for 17% of the region’s investments. Habi‘s unicorn round was responsible for over 90% of the total amount raised in the country.

Mexico and Argentina closed the Top 4 with $137 million and $136 million respectively, each accounting for 10% of the total invested in the region.

Updated: On Friday (3), Sling Hub announced that Latin American startups raised $1,25 billion in May, instead of $1.37 billion. The company said there were some mistakes in the calculations, such as including the startup Mosyle in the report. The company raised $196 million last month but is not considered a Latin American startup. Although its Brazilian origin, the company is registered in the United States.

(translation by Gabriela Del Carmen)

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