Buenos Aires — As a result of a year of adjustment, with lower liquidity and less investment from the venture capital sector, in the first half of 2022 there were fewer venture and seed capital transactions for Argentine startups, and for a lower amount than in the same period of 2021, according to a recent report put together by Microsoft for the Argentine Association of Private, Venture and Seed Capital (ARCAP), a non-profit organization aimed at promoting the development of the country’s private equity segment.
Even so, during the first months of the year a total of 42 venture and seed capital transactions were registered and the sum of all transactions was $163.8 million. Of the total number of transactions, 18 correspond to seed capital -- transactions that generally do not exceed US$1 million -- and 24 to venture capital, which generally exceed $1 million.
Compared with 2021, which was a record year for investment in Argentina and Latin America as a whole, ARCAP’s president Lorena Suárez said: “the figures for the first half of 2022 show a contraction compared to 2021″, but she pointed out that “if we look at them more closely we can see that, although volumes diminished, the vibrancy reflects that the private equity segment is more mature and solid”.
Investment in seed capital
Seed investment in Argentine startups totaled 18, for a total $8.7 million, distributed among biotech (29.4% of the total); commerce (11.8%); fintech (11.8%); SaaS (11.8%) and healthtech (11.8%).
Venture capital investments
The total of venture capital investments was 24, totaling $151.1 million, which shows a slight drop compared with the figure for the first half of 2021, and which were distributed across: biotech (13%); fintech (13%); agtech (13%); edtech (8.7%); and commerce (8.7%).
Provinces and profiles
According to the prevailing trend, Buenos Aires and Greater Buenos Aires accounted for the largest slice of investment (67.5%), followed by the province of Córdoba (22.5%), with Mendoza, Santa Fe and Tucumán provinces together accounting for 5% of transactions.
The ARCAP and Microsoft report also shows that 80% of the investments went into B2B startups, while the remaining 20% was channeled into B2C companies.
The report also surveyed investments in companies with a social impact, “ those which have identified a social and/or environmental problem that they propose to solve or ameliorate”.
Of the toral investments in startups during the first half of the year, 25% were channeled into such companies.