Brazil and Mexico Dominance of Latin America’s Hot Startup Ecosystems
While Brazil and Mexico are often considered the hubs of Latin America’s thriving startup ecosystem, other countries like Colombia are slowly gaining recognition and interest from investors. One such investor that has taken notice of Colombia’s potential is Marathon Ventures, a venture capital firm that recently closed its first fund with a whopping $26 million.
Marathon Ventures: A Pioneer in Emerging Markets
Alejandro Echavarria and Leon Papu, both managing partners at Marathon Ventures, co-founded the company in 2020 along with Pablo Navarro, operating partner. Their primary focus is on early-stage, business-to-business startups in emerging markets, particularly in fintech, SaaS, and marketplaces. The plan is to fund approximately 20 companies, providing them with the necessary resources to scale.
Echavarria, who has a background in finance and construction, believes that Latin America’s startup ecosystem operates under a different paradigm compared to other regions. "Only a few years ago, you would have to be introduced to 100 funds before you could get a term sheet," he added. This sentiment is echoed by Papu, who shares the same vision for Marathon Ventures.
A Shift in Paradigm
Echavarria and Papu started their journey as angel investors around 2016. During this time, they observed a significant funding gap at the seed stage. However, with the emergence of startup alumni founding their own businesses, they saw an opportunity to change the landscape. The global pandemic further accelerated their vision, leading them to pivot from a company builder to a fund.
Their first investment was in Tul, a B2B e-commerce marketplace that optimizes the construction-material supply chain for hardware stores across Latin America. In January, Tul announced a $181 million Series B round at an $800 million valuation. Marathon Ventures has since invested in eight companies and is already seeing an approximate two-time return over the total fund size to date.
SoftBank’s Commitment to Latin American Tech
Marathon Ventures’ portfolio includes notable companies such as Estoca, Meru, Neivor, Sprout, Sumer, Welbe, and Wonder Brands. As they continue to invest in emerging markets, they plan to establish an office in Mexico City by the end of the first quarter of 2022.
Meanwhile, Colombia is experiencing a surge in investment, with Latin America seeing $19.5 billion in investments in 2020 alone. SoftBank’s commitment to supporting Latin American startups has further contributed to this growth.
A New Era for Startups in Colombia
Colombia’s startup ecosystem has been gaining traction in recent years, with a growing number of investors and entrepreneurs taking notice. With Marathon Ventures leading the charge, it will be interesting to see how the country’s startup landscape evolves in the coming months and years.
As the competition for funding continues to intensify, one thing is certain – Colombia is no longer just an emerging player in Latin America’s startup ecosystem. The country has taken its rightful place alongside Brazil and Mexico as a hub of innovation and growth.
The Future of Startups in Latin America
As the region’s startup ecosystem continues to evolve, it will be essential for investors and entrepreneurs alike to keep a close eye on Colombia. With Marathon Ventures at the forefront, the potential for growth and innovation is immense.
In an interview with TechCrunch, Echavarria shared his thoughts on the future of startups in Latin America: "We’re not just investing in companies; we’re investing in people. We want to create a network of entrepreneurs who can help drive the region’s growth."
As Marathon Ventures continues to pave the way for emerging markets, it will be exciting to see how Colombia’s startup ecosystem responds and adapts to this new era of growth and innovation.
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