ARGENTINA Trends and Developments Contributed by: Manuel Tanoira, Lucía Rivas O’Connor, Luis Merello Bas and Dolores Nazar, TCA Tanoira Cassagne
Corporate Venture Capital (CVC) in Argentina Expansion of CVC and key factors In recent years, Argentina has established itself as a leader in Spanish-speaking Latin America in the adoption of CVC, surpassing countries like Chile, Mexico and Colombia. This growth is largely due to restrictions on corporate profit repatriation and tax incentives that have encour - aged reinvestment in innovation and technology. Unlike more developed markets, Argentina has not established government-backed start-up investment funds in the past year, leaving large corporations and CVC as the primary drivers of the entrepreneurial ecosystem. Additionally, the absence of a large-scale fund of funds has limited institutional financing options, favouring more decentralised strategies led by private and corporate funds. Key data on CVC in Argentina According to the Corporate Venturing Latam 2024 Report, developed by Wayra and Global Corporate Venturing: • 70% of Argentine CVC funds have launched since 2020, tripling the total number; • 100% invest in seed-stage start-ups, and 83% also target early-stage start-ups; • 92% invest in regional start-ups, while 46% also invest in the US and 23% in Europe; • 62% focused on agtech and foodtech, solidi - fying Argentina’s role as an innovation hub; • 62% also invest in transport, mobility and logistics; and • 54% invest in financial services, energy and public services. The report also identified the main mechanisms used by Argentine corporations to engage with innovative start-ups. These were:
• CVC; • technology scouting (46%) – active search for tech start-ups to address internal challenges; and • client-supplier Relationships (40%) – collabo - ration with start-ups to meet specific busi - ness needs. CVC outlook and opportunities in Argentina CVC in Argentina continues to grow as more companies look to innovate and manage risks. The consolidation of CVC as a key tool for the development of the Argentine entrepre - neurial ecosystem, combined with the need for investment in strategic sectors such as agtech, foodtech, biotech and fintech, presents an optimistic outlook for the coming years. As Argentina moves towards economic stabilisation and growth, CVC is expected to play an increas - ingly significant role in financing start-ups and new technologies. Funding Rounds and Trends in Argentina VC funding rounds in Argentina are primarily made through SAFEs (Simple Agreements for Future Equity), rather than equity rounds. There is currently no active exit or IPO market, leading to longer investment cycles and lower liquidity. Since 2022, due diligence has become stricter, with investors prioritising traction and actual revenue overgrowth projections. Risk aversion has increased, causing more down rounds and tougher founder and business model evalua - tions. This trend reflects global shifts towards more sustainable investments after the 2021 VC boom. Additionally, there has been a growing focus on sustainability and ESG policies. Most VC funds now require full ESG compliance in their invest - ment agreements, as their LPs demand ESG
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