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The Latin America startup ecosystem is having a great year, with mega-rounds being announced at breakneck speed and new unicorns minted almost monthly. This is mostly due to the clearly maturing startup scene in the region, with proven successes such as Nubank, Cornershop, Gympass and Loggi helping to bolster LatAm’s credibility.

Interestingly, many of the region’s rounds are led by or saw participation from investors based elsewhere. Firms such as SoftBank, Tiger Global Management, Tencent, Accel, Ribbit Capital and QED Investors are pouring money into LatAm. Some are even seeing more opportunity than in the U.S. — Latin America, they believe, has historically been ripe for disruption, especially in the fintech and proptech sectors, due to the significant underbanked and unbanked population in the region and the relatively unstructured real estate industry.

Last month, my colleagues Anna Heim and Alex Wilhelm found that structural factors such as strong digital penetration and quick e-commerce growth are among the key reasons Latin America is breaking venture capital records this year. One Mexico-based VC even declared that the story was about “talent, not capital.”

Local VCs are raving about the human capital in the region, but for some global investors, the appeal of Latin America extends beyond the talent to the general populace. Shu Nyatta, a managing partner at SoftBank who co-leads its $5 billion Latin America Fund, pointed out a dynamic that might seem obvious but is rarely articulated: Technology in LatAm is often more about inclusion rather than disruption.

“The vast majority of the population is underserved in almost every category of consumption. Similarly, most businesses are underserved by modern software solutions,” Nyatta explained. “There’s so much to build for so many people and businesses. In San Francisco, the venture ecosystem makes life a little better for individuals and businesses who are already living in the future. In LatAm, tech entrepreneurs are building the future for everyone else.”

Accel Partner Ethan Choi says the region’s consumer markets are growing rapidly thanks to a fast-growing middle class and “technology permeating through every aspect of consumers’ lives.” This has spurred demand for digital offerings, which has led to more startups, and consequently, investor interest.

Brazil and Mexico riding the gravy train

One look at the dollars pouring into LatAm this year is enough to convince anyone of the skyrocketing interest.

Latin America saw a total of $6.2 billion in incoming venture capital in the first half of 2021, more than double the $2.6 billion in the same period last year, and even beating the $4.1 billion invested across all of 2020, according to preliminary data from LAVCA (the Association for Private Capital Investment in Latin America — LAVCA used a different methodology than CB Insights, in case you’re wondering).