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Business Management

Scandal and Trump shake Latin American startup stability

The investment landscape for tech startups in Latin America is at an important inflection point. The startup scene is far from the maturity of North America and Europe and continues to meet different hurdles. A mixture of political instability and uncertainty around US trade policy since President Donald Trump was elected has cast a pall over the ecosystem.

LAVCA, an organisation that tracks VC activity in Latin America, published a report into startup investments in 2016, which recorded a record number of deals for the year at 197, up from 182, reaching $500 million in transactions.

At the same time, KPMG’s Venture Pulse report for Q1 2017 noted that Mexico is in a state of flux. With Trump taking the presidency, many investors are opting for a ‘wait and see’ approach to see how things pan out. The report showed a significant drop in both capital invested and deals closed in Q4 2016 compared to Q3.

“The results of the US presidential election are now resonating across the Americas, particularly in Mexico and Latin America,” according to Gerardo Rojas, head of deal advisory, KPMG Mexico. “While investors continue to show an appetite for the region, many are waiting to see what will happen with the economy and trade agreements now that the new US administration is in place.”

 

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Jonathan Keane

Jonathan Keane is a freelance journalist, living in Ireland, covering business and technology

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