Latin America’s entrepreneurial landscape is filled with innovation and determination. However, the region is currently navigating a wave of economic instability that may affect its startup ecosystem, especially in terms of raising investment capital. While opportunities remain visible, experts warn that local ventures could suffer setbacks due to limited investor liquidity and an uncertain financial environment.
Economic Pressures Impacting Local Startups
The current instability in Latin America’s economies is not entirely self-contained. Much of the region’s economic trajectory depends on the performance of larger economies—particularly the United States. This dependency poses a substantial challenge for local markets, as fluctuations in foreign economic policy, interest rates, or investment flows can have immediate consequences in Latin America.
One of the most pressing concerns is currency devaluation, which has become more frequent in recent years. A weaker local currency diminishes the purchasing power of both consumers and businesses and makes cross-border expansion more expensive. This environment places startups in a precarious position, particularly those looking to raise funding from international venture capital firms or expand across Latin American borders.
The Regional Expansion Challenge
Startups in Latin America must navigate a complex web of microeconomies, with each country offering unique regulatory, cultural, and economic landscapes. While the local competition is fierce, the real challenge lies in regional expansion. A business model that works in Argentina may need significant adaptation to succeed in Colombia or Brazil.
Despite these obstacles, many startups have shown resilience by tailoring their offerings to meet the specific demands of different markets. This adaptability is not only a strength but a necessity. The ability to operate across various economies while maintaining growth and customer loyalty is a crucial indicator of a startup’s potential for long-term success.
Investment Trends: Small Deals Dominate
According to a recent report by Cube Ventures, 85% of the transactions involving Latin American startups over the past year were valued below $250 million. Only 4% of these deals surpassed the $1 billion threshold, underscoring the relatively conservative approach of investors in the region.
This data reveals two things: first, that venture capital is still flowing into the region, albeit at a cautious pace; and second, that Latin America is still considered a high-risk zone for many large-scale investors. The billion-dollar “unicorn” label remains elusive for most companies—though not entirely out of reach.
The Competitive Edge of Latin American Startups
What makes Latin American startups particularly intriguing is their ability to survive and even thrive in volatile conditions. These companies have honed the skill of building scalable models in adverse environments, developing creative approaches to raising capital, and staying lean without sacrificing innovation.
Their willingness to experiment, coupled with a deep understanding of the unique needs of local consumers, often results in more sustainable growth strategies. Many founders are also looking beyond traditional fundraising methods, exploring alternatives such as revenue-based financing, venture debt, or crowdfunding to fuel expansion.
12 Latin American Startups with Billion-Dollar Potential in 2025
Despite the difficult terrain, some startups stand out with impressive growth trajectories and investor interest. According to a report by Distrito, a leading innovation and investment firm, the following 12 startups are poised to potentially achieve a $1 billion valuation by 2025:
Argentina
- RecargaPay
A mobile payment platform offering services such as prepaid phone top-ups, bill payments, and transport card management. With over 7 million users, RecargaPay has demonstrated consistent organic growth and strong product-market fit in Argentina’s increasingly digital economy. - Pomelo
A fintech company that provides cloud-based infrastructure for issuing and managing payment cards. Pomelo is rapidly becoming a key partner for banks and other fintech startups across Latin America due to its scalable API-based solutions.
Mexico
- Kueski
Known for its “Buy Now, Pay Later” (BNPL) model, Kueski has revolutionized personal credit in Mexico. It has already issued over 20 million loans and collaborates with 25% of the country’s top retailers. Its traction and strategic partnerships position it as a strong unicorn candidate.
Brazil
- Tractian
Specializes in predictive maintenance for industrial equipment through smart sensors and analytics software. Tractian enables companies to avoid costly downtimes and optimize asset management in real time. - Blip
A chatbot platform powered by artificial intelligence, Blip enhances digital communication strategies for companies across 32 countries. Its global footprint continues to grow. - Petlove
An e-commerce marketplace for pet products, offering over 15 million items. Its subscription-based model has fostered customer loyalty and steady revenue streams. - Mottu
Offers motorcycle rentals tailored for gig economy couriers. Mottu includes insurance and 24/7 assistance, making it an essential service for last-mile delivery workers. - CRM&Bonus
A customer loyalty platform that uses “giftback” technology to measure and enhance promotional campaign effectiveness. - Flash
A flexible corporate benefits platform used by over 30,000 companies and one million users. Its customizable offerings cater to modern workforce needs. - Stark Bank
A digital banking solution targeting medium to large enterprises. Its seamless integration capabilities and B2B focus make it highly attractive for investors. - Omie
A cloud-based enterprise management platform for small and medium-sized businesses. Omie blends financial services with process automation, addressing a significant market need. - Celcoin
A financial infrastructure provider enabling third-party platforms to integrate banking services. Celcoin is helping power the embedded finance trend in Latin America.
Latin America’s startup ecosystem is at a critical juncture. Economic instability, currency fluctuations, and cautious investment patterns continue to pose challenges. However, the region’s entrepreneurs are proving remarkably resilient, leveraging innovation and adaptability to carve out success.
As more Latin American startups mature and demonstrate scalability, the likelihood of new unicorns emerging in 2025 is very real. With strategic investment, government support, and continued technological adoption, these 12 startups—and others—may soon join the global billion-dollar club.