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Venture capital looks to Latin America 2020

Capital Riesgo, Venture capital

A few days ago I watched an interesting video in which they commented on the next trends for Venture Capital(Venture Capital) in the world and specifically in Latin America. I found it really interesting the deployment that many Venture Capital firms are beginning to have to go to the region to define operations, this means that companies born in countries of the region will soon begin to compete worldwide.

Capital Riesgo, Venture capital
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Venture Capital and Sectors

The main sectors they are focusing on are mainly Retail, both on-line and off-line, and within the Retail segment they are focusing on everything related to restaurants, in fact the big chains are entering there in a very active way. Another sector they are focusing on is education; in fact, Santillana, a Spanish company, is doing interesting work and entering several countries. The reason for this movement is the significant growth of a middle class that is making the economy move.

Venture Capital and Main countries

The two most active countries for investment in this sense are Brazil and Mexico, these two countries are the most interesting for the venture capital market today, Peru in the medium term is starting to be interesting as well as Colombia. In the case of Chile they are also already implemented, but in this country now has some interesting trend in Real Estate and casinos (because they are well regulated) more than the rest of the countries (from the point of view of Private Equity). Argentina is the big loser in the Venture Capital vision due to the country’s policies.

If we analyze the different markets comparing them with the growth of European countries in many cases we can see a market situation similar to the one that could exist in Spain in 2003/2004 when they started to invest intensively in Real Estate, but directed to other sectors, that is to say, that now we can establish that the countries of the region will have at least 5 more years of growth, possibly more, in global, without going into possible punctual problems of some country that can make them fall behind.

Venture Capital and Opportunities

Venture Capital in this market vision has a key point that makes it more effective or less risky than it seems, and that is that in most cases when a Venture Capital company knows a market well, jumping to another market even if it is a major growth market does not interest them, usually because of their own Business Plan approach, and this is because they prefer that many local investors are those who first drive the companies, and they enter in growth phases or differentiating opportunities after they have begun to consolidate a sector.

In any case, it is a very positive point that the VC is looking at Latin America, as this will create investment opportunities in locally growing brands in an interesting way.

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