LATAM Startups: Why Early Stage Is the Best Bet for 2025

The venture capital ecosystem in Latin America is showing signs of recovery, though not without imbalances. According to Crunchbase, investment in the region grew by 26% in 2024, reaching US$2.85 billion. In a historic milestone, Mexico surpassed Brazil in fundraising during 2Q25. This uneven rebound highlights a unique window of opportunity for angel investors and seed funds, making Early Stage LATAM 2025 a pivotal moment for those ready to identify the most promising deals.

Late-Stage Dominance Creates Space for Seed Investment

Crunchbase data shows that of the US$961 million raised in 2Q25, nearly 57% (US$547 million) went to late-stage and growth rounds, almost double compared to the previous quarter. Big names like Klar (US$170M), Kavak (US$127M) and New Wave (US$120M) captured most of this attention.

“When financing concentrates on established companies, the competition in early stages decreases, creating a golden window for angels and seed funds,” highlights the report.

While growth rounds increased by 102% year-over-year, the number of angel, seed, and early-stage deals fell. For early investors, this means fewer startups competing for attention, better valuations, and stronger negotiation conditions.

From Promises to Metrics: A New Standard for Startups

Investor expectations are also shifting. The 2025 venture capital landscape is increasingly selective, especially favoring AI-first companies. Startups that succeed in raising capital today demonstrate measurable traction, scalability, and practical applications from the outset.

Examples include:

• Numia (Argentina) raised US$3.5M with a clear B2B model that combines AI and human interaction.
• Zapia (Uruguay) closed an oversubscribed US$12.35M round by demonstrating real growth.

For angels, this creates an advantage: the ability to spot early metrics of scalability, validate use cases, and provide operational expertise before startups reach mass adoption.

Sectoral Knowledge as a Competitive Edge

Specialized industries such as fintech, proptech, software, and AI continue to attract most of the capital. This is where angel investors with industry experience gain a decisive edge.

Corporations like BBVA, which has worked with more than 300 startups, illustrate the value of deep sectoral fit. Angels who know the specific pain points of their industries, adoption cycles, and client networks can detect scalable startups earlier than generalist funds.

Success stories like Ebanx and dLocal, which expanded from Latin America into Africa and Asia, confirm how sectoral expertise drives global growth.

SMEs Enter the Investment Game

Another shift is the increasing participation of small and medium enterprises (SMEs) in the investment landscape. Current conditions, accessible valuations, fewer institutional funds in early stages, and stronger local founders, make this the perfect moment for SMEs to act.

Unlike venture capital funds, SMEs don’t need to chase unicorns. Instead, they can focus on startups that:

• Solve specific problems in their industries.
• Offer quick, low-risk integration.
• Provide immediate competitive advantages.

By investing, SMEs not only support startups but also gain new technologies, competitive edges, and potential new business lines.

Toward a More Specialized Ecosystem

The future of venture capital in Latin America looks more diverse, specialized, and driven by early-stage opportunities. Angel investors, seed funds, SMEs, and startups each play a role:

• Angels: specialize in sectors where they add the most value.
• Seed funds: differentiate by geography or industry focus.
• SMEs: integrate startup innovation into their strategy.
• Startups: prove traction earlier than ever.

The trend is clear: pre-launch and ultra-early investments are becoming more common. For those prepared to act quickly, Early Stage LATAM 2025 represents a golden moment to shape the next generation of regional success stories.