Latin American startups raised $4.7 billion in 2025, but early-stage companies got only 7% of the funding as investment flowed to a smaller group of businesses, according to a report published Tuesday by startup adviser Endeavor and investment firm Glisco Partners. The report describes a recovery in capital, not a broad return to the deal-making peak.
The total was 65% higher than in 2024. Investors, however, completed 554 funding rounds in 2025, far below the 788 recorded in 2022. The recovery reached fewer businesses, the report says, and did less to help smaller firms grow into major companies.
Capital returns, but deals remain below peak
“The capital is returning to Latam, but the more important question is no longer how much money is coming in -- it is how many companies are actually scaling,” said Alfredo Castellanos, managing partner at Glisco Partners. His comments came alongside figures showing that the funding increase didn't bring the number of deals back to its 2022 level.
Many of the biggest rounds went to companies that were already well known and had scale, the report said. Those companies included Mexican digital payments company Clip, online used-car platform Kavak, Argentine financial app Uala and Mexican fintech Plata.
Early-stage startups made up a much larger share of deals than of funding. They accounted for 56% of all deals in 2025, but received just 7% of the total. The report said the financing pipeline also appeared to be tightening.
Few seed-funded startups advance
Of the startups that raised seed funding in 2022, only 5% had reached the next major funding stage by year four, according to the report. That figure tracks how many companies advanced to another funding stage; it doesn't show how much funding the remaining businesses raised.
The report draws a distinction between the number of early-stage deals and the amount of capital available to those companies. Early-stage startups made up more than half of the deals in 2025, yet got only a small fraction of total funding. Several of the largest rounds, meanwhile, went to companies that already had scale.
AI investment grows as firms test tools
Funding for companies using artificial intelligence reached $327 million in the first half of 2026, up from $165 million in the first half of 2025. The report presents those figures alongside the broader rebound in Latin American startup investment.
Kavak is using an AI “CEO” agent to handle logistics such as inventory, Chief Product Officer Alejandro Maza said. The company began using the tool in operations in the Mexican town of Cuernavaca.
Maza said the tools could double profits through year-end. But the report doesn't give a figure for profits already generated by the agent, or say Kavak has achieved that increase. The company's use of AI offers one example of how a business already among the region's larger startups is applying the technology as funding for AI companies rises.