Investments in deep techs are expected to increase 20x in the next decade.

Tempo de leitura:

Known as deep techs, startups with deep technological foundations are among the key technological trends in venture capital in the coming years. It is estimated that investments in these companies will grow 20 times in Latin America over the next decade, jumping from the $172 million recorded in 2022 to $3.44 billion in 10 years, according to the report “Deep Tech – The New Wave” by the Inter-American Development Bank (IDB).

The research reveals that 14 countries in Latin America and the Caribbean are already considered breeding grounds for deep techs supported by investors. Argentina, Brazil, and Chile account for the majority of startups in the region (30%, 30%, and 19% respectively). “These countries have well-developed venture capital ecosystems and are home to a significant concentration of researchers specialized in fields related to Deep Tech,” the report states. It is expected that Mexico and Colombia will gain greater influence in the coming years, and new countries will build their own ecosystems.

In terms of valuation, Chile, Brazil, and Argentina also play a central role, accounting for 25%, 23%, and 23% of the aggregated value of startups in the region, respectively. A positive surprise is Costa Rica, which emerges as the 4th largest ecosystem, responsible for 22% of the total valuation in the region.

Among the countries in the region, Brazil has the highest potential for ecosystem growth, with 77% of researchers and 58% of patents, although it has just over 30% of the startups. The IDB suggests that this discrepancy can be partly attributed to the prevalent model in the country, which focuses on the domestic market.

Potential Markets

The survey identified three Latin American startups valued at over $500 million. They are: Establishment Labs (Costa Rica, aesthetic medicine), NotCo (Chile, food), and Bioceres (Argentina, agriculture). Four Brazilian companies are valued between $100 million and $500 million: Voltz (electric bicycles), Speedbird Aero (drones), Kaiima (biotechnology), and Biotimize (biotechnology).

Biotechnology represents the largest share (61%) of deep tech startups in Latin America and the Caribbean (LAC). Following closely is the artificial intelligence market, accounting for 11% of the region’s deep tech companies. In this case, AI is applied to tackle complex challenges such as the development of plant-based products that are attractive and nutritious.

Other emerging sectors include nanotechnology (6% of startups), cleantech (5%), space technology (4%), advanced mobility (4%), robotics (2%), advanced manufacturing (2%), health technology (2%), advanced materials (1%), medical devices, and others (less than 1%).

“The trend is for biotechnology to continue being a prominent field due to its connections with food and agriculture, the availability of biodiversity, and the abundance of talented professionals,” the report points out. However, there will be greater diversification across various technologies, making them more accessible and viable for startups in LAC countries.

Originally published on Startups.


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