Venture capital firm NXTP to target Brazil, Mexico tech startups with $98 million fund

View of NXTP logo at the firm's Buenos Aires office, Argentina, in this undated handout picture obtained by Reuters on November 27, 2023. NXTP/Handout via REUTERS

MEXICO CITY (Reuters) - Latin American venture capital firm NXTP has raised $98 million for a fund targeting technology startups largely in Brazil and Mexico, it said on Tuesday.

Despite current macroeconomic headwinds, there is an "enormous" opportunity to invest in Latin American startups, said NXTP managing partner Darly Bendo.

"We're seeing really low software penetration in Latin America" ranging from small-and-medium-size businesses to large corporations, he said.

NXTP declined to name any of its investors.

The firm manages a portfolio targeting software as a service (SaaS), fintechs, business-to-business marketplaces and logistics.

NXTP is now eyeing opportunities to invest the funds in startups primarily in Brazil, followed by Mexico. The firm has also bankrolled startups throughout the rest of Latin America and the U.S.

"Brazil is a developed market, more mature in terms of adoption," said managing partner Alexander Busse.

NXTP has backed Brazilian startups such as and Nuvemshop, both of which went on to reach "unicorn" status by topping billion-dollar valuations.

The firm also sees good potential in Mexico, which Bendo said "reminds us of where Brazil was five years ago in terms of the tech market."

"Mexico is lagging behind ... meaning there is a bigger market opportunity there," said Busse.

Bendo cited tailwinds in the Mexican market such as the country's large manufacturing sector, where he sees a "fragmented" supply chain that is held back by its old-school operations.

"It's an interesting moment to be investing in Latin America," said Busse, who pointed to buy-in from international and institutional investors in the latest fund as proof of increased demand.

Current macroeconomic conditions have caused startups to focus on cash management, invest efficiently and slow growth, Bendo said.

"The markets are calm now, and when they're calm, it's the moment to deploy capital, which is what we need to do now," said Busse.

(Reporting by Kylie Madry; Editing by Sonali Paul)

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