The tourist VCs in LatAm have gone home

Cyclical Trends

The venture capital landscape in Latin America is marked by cyclical investment patterns, where investors often enter and exit based on global economic trends. David Vélez notes that while many investors have left the region, those who remain are finding better valuations and opportunities. He emphasizes the importance of staying committed through these cycles, as the real investors who do so often reap significant rewards 1.

The real investors stayed, and they are continuing investing. And the opportunities are there. The opportunities are there are better valuations and our better investments.

--- David Vélez

Despite the challenges, Vélez believes that Latin America offers a significant market size and transformation potential, making it an attractive region for long-term investment 2.

   

Investment Strategies

For venture capitalists considering investments in Latin America, David Vélez offers strategic advice, highlighting the necessity of a Brazil and Mexico strategy for meaningful scale. He points out that these markets are crucial due to their size and income per capita, which allow for viable business models 2. Vélez advises investors to focus on long-term horizons and to target major industry segments like financial services, education, and healthcare, which are ripe for technological disruption.

It's very hard to make a lot of business models actually work in Latin America. You dont. You are operating with a much larger income per capita, which means on the consumer side, you can create viable business models.

--- David Vélez

He underscores the potential for massive companies to emerge from the region, driven by the ongoing transition from on-premise to SaaS solutions 3.