Latin America is witnessing a resurgence in venture capital activity, providing a fresh capital pool for startups. NXTP, a venture capital firm specializing in early-stage business-to-business startups, has successfully secured $98 million in capital commitments for its third and largest fund to date.
Founded in 2011 by Ariel Arrieta, Marta Cruz, and Gonzalo Costa, NXTP positions itself as one of the region’s earliest venture capital firms, operating from offices in Buenos Aires, São Paulo, and Mexico City. Over the years, the firm has observed the fluctuating growth of the startup ecosystem. Darly Bendo, Managing Partner of NXTP, reflects on the early days when the ecosystem was nascent, with annual investments totaling less than $1 billion. In recent years, international funds poured in, driving annual investments to approximately $15 billion in 2020 and 2021.
Similar to global trends, there has been a recent slowdown in investments, characterized by smaller rounds and extended fundraising periods. NXTP has also noted a transformation in the caliber of founders, with a notable increase in repeat entrepreneurs and a higher prevalence of tech backgrounds among founders.
Despite these shifts, NXTP identifies enduring strength in B2B software and cloud solutions for the enterprise and mid-market. Notably, the penetration of workflow software in Latin America is still in its early stages.
NXTP focuses on various B2B technology verticals, including cloud and software, fintech and payments, e-commerce and enablers, B2B marketplaces, and data and AI. Their funds target pre-seed, seed, and Series A stages, with investment checks ranging from $500,000 to $5 million. The firm has invested in over 130 companies to date, with successes such as Auth0, Nuvemshop, and Mural achieving unicorn status.
NXTP Fund III, at over twice the size of its predecessor, aims to invest in 25 to 30 companies. Existing limited partners, including U.S. and global institutional funds, regional fund-of-funds, family offices, high-net-worth individuals, and technology founders, largely supported the new fund. Brazil remains a focal point for NXTP, with over half of its investments directed towards the country, while the rest go to startups in Mexico, Colombia, Argentina, Chile, and other Latin American regions. Notable investments from the new fund include online payments platform Barte and Teachy, an AI-powered edtech platform for teachers in Brazil. NXTP remains open to identifying top-notch teams within their specified domains for future investments.
