IPO
PicPay Completes IPO on Nasdaq
•February 16, 2026
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Why It Matters
The shift toward disciplined capital and operational rigor raises the bar for founders, influencing growth strategies across the region’s fastest‑growing markets. It also signals that Latin America can attract sophisticated investors despite macro risks, shaping the next wave of fintech and green‑tech scale‑ups.
Key Takeaways
- •2025 venture funding hit $4.1B, up 14% YoY.
- •Brazil leads with $2.1B, driven by advanced fintech stack.
- •Mexico deals surge 53% to $1.1B, leveraging nearshoring.
- •Follow‑on capital becomes selective; graduation rates decline.
- •Micro‑VCs and CVCs provide hands‑on, strategic capital.
Pulse Analysis
The Latin American venture landscape has entered a new phase of maturity. After the post‑2021 correction, capital has returned but is now allocated on the basis of execution quality and governance depth rather than hype. Brazil’s "Brazil Stack"—a suite of digital identity, instant payments (Pix), Open Finance and emerging Drex infrastructure—has created a fertile environment for fintechs, propelling the country to $2.1 billion in venture inflows and cementing its status as the region’s investment hub. Meanwhile, Mexico’s strategic proximity to the United States and its nearshoring momentum have driven a 53% surge in deal volume, underscoring the diversification of growth centers across the continent.
Investors are also recalibrating their playbooks. Follow‑on funding has become highly selective, with lower graduation rates reflecting a demand for measurable traction, capital efficiency and repeatable go‑to‑market models. Corporate venture capital has moved from peripheral tourist to core strategic partner, offering not only capital but also distribution channels and market validation, albeit with longer decision cycles and commercial covenants. Simultaneously, a new wave of micro‑VCs provides hands‑on support, while AI tools automate diligence, compliance and legal workflows, compressing transaction timelines and allowing founders to focus on product scaling.
For founders, the new reality demands rigorous runway planning, governance structures that withstand deep due diligence and a clear path to scale that can be quantified early. Leveraging AI to streamline operations, choosing between financial‑focused VCs and strategic CVCs, and aligning with investors who can add operational value are critical differentiators. As global supply‑chain reconfiguration fuels nearshoring and green‑tech opportunities, Latin America’s disciplined capital environment positions the region to capture high‑impact ventures, provided entrepreneurs adapt to the heightened execution standards.
Deal Summary
Brazilian fintech PicPay completed its initial public offering on Nasdaq in early 2026, becoming the first Brazilian company to list on a U.S. exchange in nearly four years. The IPO was priced conservatively, reflecting tighter market conditions and signaling a modest return of public market access for Latin American firms.
Article
Source: LatamList
By 2026, it is clear that Latin America’s startup ecosystem has moved past the post-2021 correction. Capital is back – but it is now priced around execution and governance, not narrative, and follow-on capital has become conditional rather than assumed. Early-stage capital remains active across the region, but the market has structurally changed: sharper filters, clearer expectations, and a broader mix of investors now reward companies that demonstrate operational discipline, capital efficiency, and credible paths to scale. For founders, understanding this landscape and how to set their sails is fundamental to navigate these waters.
Where the Latam Market Landed
The 2025 PitchBook Data confirms this structural shift. Capital availability has recovered, but it is driven by execution quality and governance maturity, rather than by growth narratives alone. In practice, this has meant fewer speculative bets and greater concentration around performing companies with a proven business model. Latin American startup investment climbed by 14.3% in 2025, driven by a boost in both early- and late-stage funding. Overall, venture funding in the region increased to $4.1 billion across seed- through growth-stage deals in 2025, up from $3.6 billion in 2024. The region has already proven its ability to build category leaders – Mercado Libre, Nubank, and StoneCo are reference points for globally scaled platforms that began under LatAm constraints and became multi-billion-dollar businesses.
Brazil, in particular, remained the region’s top venture investment destination in 2025, with Brazilian startups raising $2.1 billion during the year – an increase of 10.5% when compared to 2024. More than a function of market size, Brazil sits at the center of the region’s current venture dynamics, combining capital availability with an increasingly sophisticated regulatory and infrastructure stack. What is often referred to as the “Brazil Stack” – Gov.br, a national digital identity layer; instant payments via Pix; financial data-sharing frameworks such as Open Finance; and the ongoing development of Drex – has created one of the most advanced operating environments for fintech innovation globally. For fintech startups, this stack lowers distribution friction and accelerates product iteration – payments are instant, identity is standardized, and financial data is increasingly portable – which allows products to reach scale faster and compress iteration cycles**.** While speed is rewarded, companies need to watch for internalizing compliance, governance, and risk controls early, rather than treating them as a later-stage concern.
Mexico came in second in deal volume in 2025, with startups raising $1.1 billion – an increase of 53% when compared to 2024. This growth was driven in large part by a small number of outsized financings, including the largest rounds of 2025: Plata’s Series A led by Kora, followed by its Series B later in the year, which more than doubled the company’s valuation and defying the longer graduation rates we perceive in the current markets. Mexico has increasingly consolidated itself as a regional operating hub, benefitting from nearshoring dynamics, geographic proximity to the U.S., and a growing concentration of talent and capital.
At the same time, exit markets remain selective. Public market access reflects the same dynamic seen in private rounds: capital exists, but only for companies that meet elevated execution, governance, and predictability thresholds. In early 2026, PicPay went the first way and completed its IPO on Nasdaq, becoming the first Brazilian company in nearly four years to debut on a public exchange. The transaction reflected a materially lower valuation than peak-cycle expectations, underscoring that access to public markets has returned only for companies willing to accept conservative pricing and heightened scrutiny. While this IPO should be viewed as an exception rather than a reopening of the market, it nonetheless serves as a modest signal that well-positioned Latin American companies again access public capital under the right conditions.
Selective Follow-Ons and Strategic Capital – Lower Graduation Rates and CVCs
One of the clearest legacies of the 2021 and 2022 cycle is how it reshaped investors’ behavior. We are seeing lower graduation rates as a natural result of this shift – that is, a smaller share of companies are successfully moving from seed to Series A, or from Series A to Series B, within what would historically have been considered a normal timeframe. As a result, progression between rounds now requires more than survival; it requires measurable traction and a credible path to scale. For founders, this has created a healthier, although tougher, dynamic: follow-on fundraising has become more selective, and progress is increasingly assessed by means of capital efficiency and evidence of repeatability in go-to-market. In practice, founders should plan as if the next round may not occur on schedule, or even at all, while setting milestones that preserve strategic optionality rather than assuming continuous access to capital.
While traditional VC funds recalibrated, corporate venture capital expanded its footprint across Latin America. By late 2025, corporates in fintech, energy, retail, logistics, healthcare, and enterprise software had become more consistent early-stage investors – not as tourists, but as players. CVC teams became more professional and autonomous, tightening investments around core business adjacency, with clear expectations around governance, collaboration, and timelines.
For startups, this has made corporate capital more usable and relevant, particularly as a source of early customers, distribution, and market validation. At the same time, these partnerships come with tradeoffs that founders must actively manage. Corporate investors tend to move on longer timelines, including procurement processes, pilot programs, and internal decision-making cycles. Those larger institutional companies may seek commercial rights, preferential access, or strategic constraints that can limit future flexibility. As a result, founders increasingly need to pre-negotiate not just valuation, but operating mechanics of such partnership moving forward.
Hands-On Capital – Micro VCs
The current market is also reshaping who founders raise from. Alongside more selective deployment and conditional follow-on capital, a new generation of micro VC managers has gained relevance across the region, including Canary, Norte Ventures, Bossa Nova Investimentos, and MAYA Capital, reflecting founder demand for more engaged, hands-on capital. Founders increasingly seek – and must seek – partners capable of supporting them throughout the full company-building journey. In practice, that level of support becomes harder to deliver as fund managers expand their portfolios, given the inherently limited bandwidth of VC general partners: the more companies a partner is required to oversee, the lower the quality of attention and assistance they can provide.
AI as Operating Infrastructure
A.I. is no longer an edge case in venture, but it is becoming part of the operating baseline. What used to be a list of links is increasingly replaced by a single, synthesized response – as “intelligence” becomes progressively less of a feature and more of a default setting.
In fundraising, this shows up in the automation of core, and often time-consuming processes, such as investor CRM management, follow-up workflows, and the continuous preparation of diligence materials and data rooms.
In finance and compliance, A.I. is increasingly embedded in day-to-day operations, closing books faster, reconciling accounts, managing vendor and contract intake, and maintaining baseline reporting readiness.
Legal is not exempt from undergoing a similar transition. Early-stage venture is increasingly executed through standardized documentation (NVCA forms being the obvious example), and the incremental layers of review are being performed by A.I. tools. The result is not that lawyers disappear, but that a meaningful portion of the legal work can be executed with lighter legal involvement than historically expected – particularly where risk is limited, terms are market, and the parties are aligned.
This is the lens through which we at PAG Law approach these changes. We use AI to reduce low-value process work, accelerate review cycles and diligence, and deliver assistance that is faster, more tailored, and more precise to the facts of each company, investor, and transaction. Through Grow (www.higrow.ai), our legal-as-a-service platform, automation is used to collapse low-value time and accelerate execution, while attorney attention is reserved for the decisions that compound. In a market that prices execution and governance over narrative, strategy becomes the product.
The Structural Discount in Latam
Selective capital deployment, lower graduation rates, the rise of hands-on and corporate investors, and the operationalization of AI do not seem to be temporary market distortions. In a region where opportunity coexists with recurring risk, execution and governance have become important filters for capital. Latin America’s struggles are no novelty – those are historical and structural challenges that the region has to overcome to create a healthy investment environment. Political volatility has historically produced equally volatile policies that make long-duration investments riskier; and fiscal fragility increase exposure to external cycles. Inequality remains among the highest globally, contributing to periodic social instability. These constraints tend to also accelerate “talent flight.” Across multiple markets, skilled operators and founders continue to emigrate, reducing the region’s density of innovation.
Those constraints, however, do not eliminate the opportunity. We see a global shift toward digital and green economies, which increases the strategic position of business related to food security, energy transition, and critical minerals – categories where Latin America is structurally advantaged. At the same time, supply-chain reconfiguration in view of recent geopolitical movements is pushing globalization toward nearshoring and friendshoring, creating a window that is meaningfully different from prior cycles.
On the other hand, oddly (or, rather, as the rule states), it is precisely under constraint that the region has historically produced its most meaningful leaps in regulation and infrastructure. Recent enforcement actions have also highlighted the next phase of regulatory focus: the widely reported raid targeting alleged money-laundering structures linked to the Primeiro Comando da Capital (PCC) – one of Brazil’s largest and most sophisticated organized crime groups – and connected to financial actors in São Paulo’s financial center’s ecosystem underscores how infrastructure-scale financial innovation can create new vectors for illicit finance risk. As a result, Brazil’s regulators and enforcement agencies are likely to intensify scrutiny across areas such as KYC/AML, transactional monitoring (including instant payments), fintech licensing and governance, and the oversight of financial intermediaries – developments that may raise compliance expectations for startups while also strengthening the overall institutional credibility of the market.
Operating Principles
If you’re building in this market, these are the priorities.:
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Plan runway assuming no follow-on round.
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Set milestones that demonstrate repeatable go-to-market, not isolated wins.
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Maintain governance and reporting that hold up under real diligence.
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Be deliberate about financial VC versus CVC pathways.
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Use AI to compress process and decision cycles, not to tell a story.
The market is no longer forgiving – but it is, maybe hopefully, becoming more coherent. For founders who understand this moment and that coherence is an advantage, this is not an easy market; but if you’re building something real, the system will know how to recognize it.
The post Venture in LatAm Enters 2026 appeared first on LatamList.
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