The Corporate Venture Capital 2024 report presents an x-ray of the state of CVC in Latin America, providing results of investment activity in startups by large companies during the last year.
Colombia News
The Latin American region is experiencing a boom in the Corporate Venture Capital (CVC) sector, according to the Corporate Venturing Latam 2024 report, developed by Telefónica Movistar, through Wayra, in collaboration with Global Corporate Venturing. The study details the growth of investment by large corporations in startups over the last year.
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One fact that stands out in the report is that 67% of CVCs are actively investing in key sectors such as Agriculture, Foodtech and financial services.
These sectors, in particular, have been identified as areas with great potential for growth and innovation, reflecting an optimistic outlook for the future of the region. Furthermore, 67% of investments are concentrated in Agtech and Foodtech, while 50% are in areas such as Life Sciences, Real Estate, Proptech and Constructech.
Colombia: an emerging protagonist in the CVC
As for Colombia, the report reveals a relevant fact: one in three CVC programs in the country were created after 2020, which demonstrates growing interest in this investment model. Most of these programs focus on the early stages of startups, with 83% of investments directed at companies in their early stage phase.
Furthermore, Colombian corporations are not only investing locally, but are also seeking opportunities in international markets. According to the report, 83% of Colombia’s CVCs make their investments in the United States and Europe, which reflects the global projection of the region’s corporations.
Accelerated Growth of CVC in the Region
One of the most significant findings of the CORPORATE VENTURING LATAM 2024 is the exponential growth of CVC funds in Latin America, which have doubled between 2020 and 2023. This phenomenon places the region as one of the fastest growing worldwide in terms of corporate investment in startups.
In this context, 80% of CVC’s active funds are concentrated in five countries: Argentina, Mexico, Chile and Colombia, standing out as the main actors in the ecosystem.
At the level of strategies, the CVC is positioned as the tool most used by Colombian companies to connect with innovative startups. He Venture Clienta model that links corporations with startups to meet internal needs and establish a customer-supplier relationship, is second on the list of strategies.
Motives and perspectives of Corporations
The report also reveals the main motivations behind CVC’s investments in the region. 50% of corporations consider that the main reason for investing in startups is to prepare for future disruptions in the long term. On the other hand, 44.7% of companies seek to create new businesses in the medium term, while 39.1% invest to support their existing businesses in the short term.
Furthermore, 55% of CVC programs are in an early phase, less than five years of maturity. 32% have been in operation between five and nine years, and only 14% have more than ten years of experience. This shows the emerging nature of this trend in the region.
Challenges and opportunities for the CVC in Latin America
Despite the growth, the study also identifies some key challenges that corporations must face to continue developing their CVC programs in Latin America. These include the need to build solid frameworks, overcome internal barriers within companies and foster collaboration between different actors in the innovation ecosystem.
Despite these challenges, the outlook is encouraging. Agustín Rotondodirector of Wayra Hispam, commented on the results of the report: “We are excited to present this new study that helps understand the corporate investment ecosystem and its emerging opportunities. The results show significant growth in the number of corporations investing in Latin America, indicating a promising future for innovation and entrepreneurship in the region. We are sure that this study will help more corporations decide to structure their own funds, contributing to the growth of the sector.”
With a growing number of active funds and a clear focus on technological innovation and emerging sectors, Corporate Venture Capital is emerging as one of the key drivers for economic development and digital transformation in Latin America in the coming years.
