The 2nd edition of the report “Private Capital Industry in Uruguay“, prepared by the consulting firm CPA Ferrere at the request of the Uruguayan Private Capital Association (Urucap), showed that 36 capital transactions were carried out between last year and the first half of 2024, and that the largest operations were company mergers.
The companies that received the most capital were information technology companies (TIC) and software with 39%, followed by fintech with 18% and biotech, with 15%.
The main source of foreign investment was USA with a participation of 26% of the total, continuing in order of importance Brazil with 13%, the United Kingdom with 9%, and Mexico and Spainwith 6%, respectively. The report also notes that the largest participation was from individual investors, with 59%.
The study, which had a survey as its starting point, also showed that a significant group of businessmen participated in 29 business rounds in 2023, which became the year of greatest activity where about 12 million dollars were invested in national projects. , where the majority did not exceed one million dollars.
Likewise, the report adds that private capital disbursements continue to decline from 2022, after registering a record of 7,277 million in 2021. In 2023 the figure reached 3,327 million dollars, with a year-on-year decrease of 44% . The main reason was the global “uncertainty” that affected investment decisions, something that led to opting for lower risk assets.
In regional perspective it is indicated that Latin America suffered the consequences of the international situation, with a decrease in investment amounts and the number of operations, showing some recovery in the first months of this year, especially in countries such as Brazil and Mexico.
Uruguay, highlighted
The business environment in Uruguay It is characterized by having stability, low corruption, civil liberties, Electronic Government Development Index (EGDI), a consolidated and regulated banking system, and more social mobility.
The investment grade has remained stable for 10 years, in addition to there being a free flow of capital and an outstanding investment promotion regime. At the same time, the existence of a single tax system throughout the territory stands out, a free exchange market, without restrictions for the repatriation of units and without requiring a local counterpart to do business.
Between 2021 and the first half of 2024 there were about 300 completed transactions, highlighting the participation of the United States, the United Kingdom, Argentina and Brazil with a focus on software, financial services and the manufacturing industry.
The maturation of the market is reflected in the diversification of diversification strategies, with an increasing trend in partial purchase agreements compared to previous years.
The most used type of agreement continues to be the total acquisition (38%), where the United States (26%), Brazil (13%) and the United Kingdom (9%) are the largest investors, and startups in IT, fintech and Biotech represents approximately 75% of the total investment.
Sylvia Chebi, president of Urucaphe defined, in dialogue with Scopeto this activity as “a meeting of the ecosystem.” “There are investors, members of Urucap, who are institutional investors in startups, entrepreneurial capital, angel investors and entrepreneurs. Then there are some ecosystem actors such as organizations such as ANII, Uruguay Innovation Hub, WALKand incubators and accelerators,” he indicated.
Regarding the objective, the business leader indicated that “what is sought is to present some reports on how the entrepreneurial capital industry is doing in Uruguay and make a panel of what the trends are. We have people from Argentina, from Chilifrom Brazil among the entrepreneurs who are looking for where to invest.
Chebi assured that we are in a “good moment”, in which “we are attracting a lot of interest in the region and abroad”, and where “there are many instruments to help entrepreneurs and investors.” “We invest in everything that is technology, artificial intelligence and fintech, above all,” he said.
Source: Ambito
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