According to two sources with knowledge of the situation and marketing materials obtained by Blockworks, a new venture capital firm focusing on Latin American crypto blockchain innovators is in the works.
Armando Aguilar, a well-known and substantial digital asset investment manager who primarily focuses on blockchain venture capital bets, is co-leader of emerging asset manager Aztlan Capital and a former employee of Lightshift Capital. Jack Saracco, who developed a few blockchain firms in the area, joins Aguilar as managing partner.
Saracco, who resides in Argentina, graduated from Y Combinator, a renowned startup incubator in Silicon Valley. Aguilar is located in Puerto Rico and refuses to speak on behalf of the startup. According to insiders, both are involved in the company’ investing and incubation activities.
According to both sources, Aztlan sees plenty of opportunity throughout Latin America to capitalise on promising businesses that have mainly lacked attention from institutional US backers. Aztlan expects to host a maiden capital close from limited partners by the end of the first quarter. Other crypto hotspots, such Southeast Asia and parts of Europe, share the similar characteristics.
The prevailing opinion is not a recent development in terms of digital assets: According to one source, investing in companies in South and Central America often requires “feet on the ground” to carry out adequate due diligence. Furthermore, it’s uncommon for buy-side venture players headquartered overseas to establish a presence there or to go there frequently enough to justify signing checks on a regular basis.
The region is now a prime location for crypto funds to deploy capital, according to Mercedes Bidart, the chief executive of Quipu Bank, which focuses on digital assets. In an interview, Bidart was speaking generically rather than specifically about Aztlan.
According to Bidart, “Latin America is one of the locations where some crypto funds are growing and not just looking to Latin America, [but also emerging economies].”
“[Several funds] invest exclusively in Latin America and Africa. And I believe the reason for it is that, even in times of economic crisis, cryptocurrencies assist our nations achieve greater stability or find alternative means of sustaining their economies.
According to CB Insights statistics, which is still among the most complete available, there were almost 205 million people, or a staggering 43%, without bank accounts in the region in 2021. According to the same report, that’s favourable for a disproportionate 12% of the unbanked people of the world.
Latin America is receiving increasing interest from cryptocurrency investors with dry powder to spare, a rare breed these days. They see the region as being rich in untapped alpha that is just waiting to be discovered. They see a chance in the fact that the window of opportunity is closing as more people become aware of the growing potential of digital assets.
Accordingly, several studies conducted over the past couple of years have indicated that blockchain adoption is increasing quickly. Not to mention the fact that countries have accepted bitcoin as legal cash.
The central tenet of organisations like Aztlan and others is that residents of the region, who are frequently confronted with high inflation and a lack of banking options that US citizens may take for granted, are “increasingly turning to decentralised networks” via cell phones and generally improving internet infrastructure.
According to sources outlining the new launch’s perspective, the majority of investor funds and relationships in the region have typically been focused on later-stage venture bets. According to one source, those who lacked access to infrastructure for conventional financial services can serve as the foundation for cryptocurrencies.