Latam Saw Almost Tenfold Growth in Blockchain and Crypto VC Investments in 2021
Based in Latin America, LAVCA, which is the Association for Private Capital Investment, has issued a new report. It states that there has been immense growth in the venture capital (VC) investment in the region in 2021, as opposed to the numbers recorded in previous years. The investments that were registered in Latam were about $15 billion, which is nearly three times the amount of investments made in 2020. However, blockchain and crypto investments saw an almost tenfold increase. VC investments in 2021 in Latin America had been around $4.14 billion.
This had occurred in the middle of the coronavirus pandemic and the influx reached a whopping $15.7 billion in the previous year. However, the investment growth rates seen in conventional sectors were nowhere close to the massive amount of growth seen in investments that were made in the crypto, blockchain and defi sectors. The numbers mentioned in the report showed that these investments had reached about $653 million last year, which makes it almost ten times more than the $68 million worth of investments that were made in 2020. This was primarily because of the increase in interest show in these alternative investment vehicles by consumers.
However, the biggest volume was seen in the fin-tech sector, which had seen an investment of about $6.1 billion made in 258 transactions. This marked a four-times growth as opposed to the numbers in 2020. While this sector experienced explosive growth in Latam last year, it is important to note that it was concentrated on a handful of companies that control the continent’s crypto industry. As a matter of fact, most of the $653 billion investment that was made in the sector was in funding rounds conducted for four firms. One of the region’s biggest crypto exchanges, Mercado Bitcoin had carried out three funding rounds to raise $290 million.
A crypto platform based in Mexico, Bitsohad received investments of about $250 million. A crypto exchange in Argentina called Ripioand another exchange in the same country called Lemon Cash were the other two companies that had received investments. DCG led the funding round for the former, which raised $50 million, while the latter raised $17.3 million. However, it is important to note that Latin America doesn’t just have trading platforms and consumer exchanges when it comes to crypto investment.
The report highlighted that there had been also been other investments that were focused on B2B (business-to-business) services sector, which had occurred in the start of this year. These include Agrotoken and Gavea Marketplace, each of which have seen an investment of about $5 million each. There is also Liqi, which has received an investment of around $5.5 million. The exponential growth in the venture capital investments in Latin America is an indication of the widespread adoption of cryptocurrencies in different parts of the world. It has prompted countries all over the world to discuss the topic of crypto legalization and regulation, as these digital currencies are becoming mainstream with each passing day.