NXTP raises $98 million in its biggest fund yet, strengthening the venture capital landscape in Latin America

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In a significant boost to Latin America’s burgeoning startup ecosystem, NXTP, a venture capital firm specializing in early-stage B2B startups, has successfully secured $98 million for its third fund — marking its largest fund to date. The firm, founded in 2011 by Ariel Arrieta, Marta Cruz, and Gonzalo Costa, has been a prominent player in the region’s venture capital landscape, with offices in Buenos Aires, São Paulo, and Mexico City.

Over the past decade, NXTP has witnessed the evolution of the Latin American startup ecosystem, experiencing periods of growth and consolidation. Darly Bendo, Managing Partner of NXTP, reflects on the considerable changes, noting, “The ecosystem was obviously still very nascent at that moment,” referring to the time of the firm’s second fund. However, the scenario has transformed drastically in recent years, with the annual investment in the region skyrocketing from under $1 billion in 2015 to an impressive $15 billion in 2020 and 2021.

Despite a subsequent tapering off of investments and a slowdown in the pace of fundraising, NXTP remains optimistic about the region’s potential. Bendo highlights a positive shift in the caliber of founders, with an increasing number of second- or third-time entrepreneurs entering the scene. The experience and expertise of these founders, coupled with a growing focus on B2B software and cloud solutions for enterprise and mid-market segments, are indicative of a maturing startup landscape in Latin America.

NXTP’s investment strategy aligns with these trends, targeting B2B technology verticals such as cloud and software, fintech and payments, e-commerce and enablers, B2B marketplaces, and data and AI. The firm’s funds are deployed at pre-seed, seed, and Series A stages, with investment amounts ranging from $500,000 to $5 million. Notably, the firm has invested in over 130 companies to date, including unicorn successes like Auth0, Nuvemshop, and Mural, along with exits such as Inventa.

The latest fund, NXTP Fund III, represents more than a 2x increase from its predecessor, enabling the firm to invest in 25 to 30 companies. A majority of NXTP’s existing limited partners, including U.S. and global institutional funds, regional fund-of-funds, multi- and single-family offices, high-net-worth individuals, and technology founders, have backed the new fund. The inclusion of several new global institutional investors reflects growing international interest in Latin America’s startup ecosystem.

Brazil remains a focal point for NXTP, with more than half of its investments concentrated in the country. However, the firm maintains a diversified portfolio, extending its support to startups in Mexico, Colombia, Argentina, Chile, and other Latin American nations.

Already making strides with the new fund, NXTP has invested in online payments platform Barte and Teachy, an edtech company in Brazil. Alexander Busse, Managing Partner of NXTP, emphasizes the firm’s openness to identifying the best teams within domains that exhibit strong secular tailwinds.

As Latin America’s venture capital activity gains momentum, NXTP’s expanded fund signals a positive outlook for the region’s startups. With a commitment to fostering innovation and supporting visionary founders, the firm is poised to play a pivotal role in shaping the next wave of success stories in Latin America’s dynamic startup landscape.

(Source: Kylie Madry | Reuters | Christine Hall | TechCrunch)

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