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Venture Capital - Colombia

Colombia

The Venture Capital market market in Colombia is expected to achieve a Total Capital Raised of US$355.80m by 2024.
In the same year, the Later Stage market is forecasted to lead the market with a projected market volume of US$156.00m.
When compared globally, the United States is anticipated to generate the highest amount of Capital Raised, reaching US$136,600.0m in 2024.
Colombia's Venture Capital market is flourishing, attracting global investors due to its tech-savvy startups and government support for innovation.

Key regions: Europe, United States, United Kingdom, Australia, Brazil

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Analyst Opinion

The Venture Capital market in Colombia has been experiencing significant growth in recent years, driven by several key factors.

Customer preferences: Colombian entrepreneurs are increasingly turning to venture capital as a source of funding for their startups. This is due to the advantages that venture capital offers, such as access to capital, expertise, and networks. Entrepreneurs are attracted to the potential for rapid growth and scalability that venture capital can provide, as well as the opportunity to work with experienced investors who can help guide their businesses to success. Additionally, venture capital funding allows entrepreneurs to focus on building their businesses rather than worrying about fundraising.

Trends in the market: One of the key trends in the Venture Capital market in Colombia is the increasing number of venture capital funds being established in the country. This is driven by both domestic and international investors who recognize the potential for high returns on investment in the Colombian market. These funds are targeting a wide range of sectors, including technology, healthcare, and renewable energy, reflecting the diverse opportunities available in the Colombian economy. Another trend is the growing interest in early-stage investments. Investors are recognizing the potential for high growth and returns in early-stage startups, and are willing to take on the associated risks. This trend is supported by the increasing number of incubators and accelerators in Colombia, which provide support and resources to early-stage startups.

Local special circumstances: Colombia has a vibrant entrepreneurial ecosystem, with a growing number of startups and a supportive government that is actively promoting entrepreneurship. The government has implemented various initiatives to encourage venture capital investment, including tax incentives and the creation of investment funds. These initiatives have helped to attract both domestic and international investors to the Colombian market. Furthermore, Colombia's geographic location and its membership in regional trade agreements, such as the Pacific Alliance, provide access to a large market of over 200 million people. This makes Colombia an attractive destination for investors looking to expand their businesses beyond the domestic market.

Underlying macroeconomic factors: Colombia has experienced stable economic growth in recent years, which has created a favorable environment for venture capital investment. The country has a growing middle class and a young population, which provides a strong consumer base for startups. Additionally, Colombia has made significant progress in terms of political stability and security, which has increased investor confidence in the country. In conclusion, the Venture Capital market in Colombia is developing rapidly due to customer preferences for venture capital funding, the increasing number of venture capital funds, the growing interest in early-stage investments, the supportive government, and favorable macroeconomic factors. These factors have created a conducive environment for venture capital investment in Colombia, and the market is expected to continue to grow in the coming years.

Methodology

Data coverage:

Data encompasses B2B and B2C enterprises. Figures are based on the amount of capital raised, the average of deal size and the number of deals.

Modeling approach / Market size:

Market sizes are determined through a combined top-down and bottom-up approach, building on a specific rationale for each market segment. As a basis for evaluating markets, we use data from OECD, annual financial reports of key players, industry reports, third-party reports, publicly available databases, and survey results from primary research (e.g., the Statista Global Consumer Survey). In addition, we use relevant key market indicators and data from country-specific associations, such as GDP, CPI, number of small and medium-sized enterprises (SME), new businesses registered (number) . This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the relevant market. For example, the S-curve function and exponential trend smoothing are well suited for forecasting digital products and services due to the non-linear growth of technology adoption.

Additional notes:

The market is updated twice a year in case market dynamics change. The impact of the COVID-19 pandemic and the Russia-Ukraine war is considered at a country-specific level.