LatAm Startup Funding Surged to $1B in Q3 2025
After Mexico briefly stole the spotlight, Brazil stormed back in Q3, fuelled by late-stage confidence.
Last quarter, the story in Latin America was about Mexico finally outpacing Brazil in venture funding, the first time that had happened in over a decade. But the celebration didn’t last long. Just three months later, Brazil flipped the script.
According to Crunchbase data, startups based in Brazil raised $692 million in Q3, a massive 92% jump from the previous quarter. Mexico, meanwhile, slipped to $126 million, down 71% from its earlier high.
In total, startups across Latin America brought in $1 billion in Q3, up 21% year over year.
Late-Stage Momentum Returns
The recovery was led not by early-stage funding but by a clear uptick in late-stage and growth rounds, suggesting that investors are regaining appetite for scaling businesses rather than experimental ones.
The late-stage and growth deals in Latin America totalled $477 million in Q3, a 176% jump year over year. While slightly down from Q2’s $565 million, the activity revealed that global funds were re-engaging with Latin American tech, albeit more selectively.
Meanwhile, seed and angel funding totalled $105 million in Q3, a 34% increase from the previous quarter after months of muted activity, though still down 47% year over year. This suggests that early-stage capital is trickling back, but investors remain selective.
Overall, in the quarter, the biggest single raise came from Omie, a São Paulo-based software firm that helps small and medium-sized businesses manage operations. Its $160 million Series D, led by Partners Group, valued the company at $700 million. It was one of several nine-figure deals in the region, alongside Canopy’s $100 million round in Brazil and Kapital’s $100 million raise in Mexico.
Fintech and AI Drive Brazil’s Rebound
Fintech remains the region’s dominant investment category, and this quarter made clear how technology trends are converging around it. With Flourish Ventures’ Diana Narváez saying, “Fintech remains the region’s No. 1 funded sector because trust, access and agency are still the biggest problems for consumers and businesses,”
Several Brazilian startups are now integrating AI-driven tools for fraud prevention, credit scoring, and security, in response to the growing risks within the country’s financial sector.
That’s not surprising, as Brazil’s financial sector reported R$10.1 billion (about $1.88 billion) in fraud losses last year. The result is a fintech ecosystem that’s becoming smarter and more regulated at the same time, a combination that’s attracting institutional investors back into the mix.
Flourish’s recent bets in Brazil tell that story clearly. The firm co-led rounds for Akua, which is modernising payment acquiring across Latin America, and Kamino, a São Paulo-based startup that merges financial management tools, a native bank account, and a corporate card for midsized businesses. It also backed Liquid, another São Paulo company building the plumbing for real estate credit infrastructure.
Stablecoins Step Into the Spotlight
While fintech and AI drew most of the attention, investors are also watching stablecoins more closely.
These digital currencies are proving especially useful in a region where cross-border payments and currency volatility are constant challenges. Like Rocio Wu of F-Prime put it, stablecoins are emerging as the “killer use case” for crypto in Latin America, offering faster and cheaper transfers.
With Brazil moving towards clearer regulations and the rise of locally denominated, yield-bearing stablecoins, this space could open new avenues for financial inclusion.
A Market Finding Its Footing Again
For much of 2024, venture activity in Latin America was defined by caution. The data from Q3 suggests that mood is shifting. Brazil’s return to the top reflects renewed investor confidence in the region’s growth-stage companies, particularly those that combine financial services, regulation, and technology in practical ways.
“Latin American entrepreneurs innovate under tighter capital and tougher realities,” said Narváez. “They’re not just surviving downturns; they’re rewriting what financial innovation looks like.”
If Q2 was about Mexico’s breakthrough, Q3 was about Brazil’s belief — in its startups, its technology, and its staying power in an increasingly competitive market.
Emmanuel Oyedeji
