Deep Tech Investment in LATAM

By 2023, investment in LATAM increased by nearly 600% between 2019 and 2023, rising from under USD 300 million to USD 2 billion in just four years, according to the IDB’s Deep Tech: The New Wave.²⁸ As of September 2024, cumulative investment had grown by an additional USD 536 million, bringing the regional total to roughly USD 2.54 billion.

Even at this higher level, LATAM still trails other regions: roughly USD 13 billion in Asia, USD 14 billion in Europe, and USD 52 billion in the United States.²⁹ In macroeconomic context, those volumes correspond to about 0.04% of Latin America’s GDP, versus approximately 0.08% in Europe, 0.20% in Asia, and 0.22% in the U.S. Per capita, Latin America’s $15.25 per-person investment is higher than Asia’s modest $2.7, but still half of Europe’s $31 and a fraction of the United States’ $153.

This illustrates that while other regions have more mature Deep Tech ecosystems, Latin America has an immense and largely untapped opportunity for both capital and innovation. Looking ahead, the IDB projected in 2023 a twentyfold increase in VC investment into LATAM Deep Tech startups over the next decade, underpinned by a growing pool of researchers and engineers, cost advantages, lower early-stage valuations with attractive return profiles, and the region’s exceptional biodiversity.

The model rests on three points: Europe’s deep-tech VC 18× growth from 2012 to 2022, LATAM’s general 20× VC growth between 2012–2022, and LATAM’s 1.8× Deep Tech growth from 2020 to 2022.³⁰ We present this as a high-end scenario, credible but contingent on progress in talent retention, later-stage capital depth, regulatory coherence, and exit pathways.

In 2024, after three years of decline, primarily due to the pandemic and the "big tech crisis", the funding landscape for LATAM tech startups showed positive signs again. According to the LATAM Startup Market 2024 in Review report by SlingHub & Itaú, 2024 marked the first year since 2021 that LATAM’s tech industries experienced year-over-year growth, reaching 37%. Market funding across all tech sectors increased from USD 6.4 billion to USD 8.8 billion.³¹

LATAM’s tech investment rebounded 37% YoY in 2024, marking the first year of recovery since 2021 and signaling renewed investor confidence across sectors.

A closer look reveals that Deep Tech is the most steadily growing area. Deep Tech emerged as the third-largest category within all tech industries, securing USD 536 million of funding, 6% of the overall total, placing it just behind energy (13%) and fintech, which dominated with 55% of market funding. Although a small percentage overall, Deep Tech grew the most year over year, accounting for a 219% overall growth increase. On equity funding the trend is similar: Deep Tech lags Fintech (41%) in volume and equals Energy at 11%, yet was the highest year-over-year grower in equity funding volume in 2024, with 189% growth.

# Gaps to become international unicorns

While Deep Tech in LATAM boasts exciting pockets, the region remains dramatically undercapitalized. R&D funding is roughly 13× lower than in China and 70× lower than in the U.S.³² This shortfall is structural. In advanced economies like the US and EU, companies fund over 60% of R&D (nearly 80% in China); in LATAM, businesses cover only about 35%, while governments provide roughly 60%.