ARGENTINA Law and Practice Contributed by: Manuel Tanoira, Lucía Rivas O’Connor, Luis Merello Bas and Dolores Nazar, TCA Tanoira Cassagne
1. Trends 1.1 VC Market Market Overview
and accelerators like SF500 and GridX. Food - tech and agritech companies also experienced growth. Political changes have added another layer to these trends. Fundraising slowed before the 2024 US elections, but Argentina’s new govern - ment policies after the elections drew investor interest to the region. The country is gaining attention as a prime spot for investments in lith - ium, oil and gas, mining, and knowledge-driven sectors, with deal activity picking up sharply by early 2025 compared to late 2024, and increas - ing significantly in early 2025. 1.3 Key Industries Leading Industries in Venture Capital In 2024, foodtech and agtech topped Argen - tina’s venture capital scene, fuelled by a push for sustainable practices and origin-based food certification. Biotech also stood out, boosting efficiency and cutting chemical use in agricul - ture, a vital sector for Argentina and Brazil, both global food production leaders. The region’s early embrace of tech solutions, driven by cli - mate pressures and tight agricultural timelines, has made it a hotspot for testing new ideas. Market insights highlight the key sectors attract - ing funds in 2024: agtech; entertainment; food - tech; biotech; SaaS (software as a service); and AI. Notable transactions from last year include: • BRESH in entertainment; • AgroToken in agtech with a SAFE round of USD12.5 million; • Nera in agtech, with a capital injection of USD10 million; • Kilimo in agtech with a Series A round of USD7.5 million;
Argentina has one of Latin America’s long - est-standing start-up ecosystems, with roots stretching back to 1999. Despite facing econom - ic ups and downs and a shortage of available capital, this ecosystem has shown remarkable staying power and promise for growth. If Argen - tina stabilises its economy, opens up to inter - national markets, and reduces its tax burden, it could become a major venture capital hub in the region. The country has a large pool of skilled professionals and innovative talent that it could leverage for growth. 1.2 Key Trends Current Trends in Venture Capital Investments Over the past year, global economic pressures have reshaped venture capital activity in Argenti - na. Investors have faced a tough landscape with reduced liquidity, prompting more cautious deal- making and a wave of down rounds leading to fewer deals and lower valuations. This shift has pushed due diligence into sharper focus, with start-ups now judged more on solid revenue and traction rather than projections. Financing has leaned heavily on SAFE (Simple Agreement for Future Equity) rounds, while tra - ditional equity deals have been less common. Valuations, once inflated by a flood of US capi - tal post-pandemic, have adjusted downward as American monetary policy tightened, hitting Latin America, one of the world’s least-funded regions, particularly hard. Many Argentine start- ups struggled to secure funding, resulting in staff cuts and valuation declines. However, 2024 brought a modest upturn, espe - cially in biotechnology, driven by venture funds
20
CHAMBERS.COM
Powered by FlippingBook