Latin America has vast potential for renewable energy, including solar, wind, and water power. Brazil and Chile, with abundant sunshine and strong winds, are ideal for Energy & Environment startups. Brazil is a leading wind energy producer, while Chile’s Atacama Desert, one of the sunniest places on Earth, supports major solar energy efforts. In 2024, 5.1% of StartupBlink’s sampled Energy & Environment startups came from Latin America, showing the region is starting to grow in this area. While it’s not a global leader yet, more new startups are appearing, and more investors are showing confidence in this industry. This article looks at the growth of energy startups in Latin America. For a deeper understanding of these trends and access to comprehensive data on 100+ tech markets and 1,000+ startup ecosystems, explore StartupBlink Pro.
Key Highlights from the Energy & Environment Startup Industry in LATAM
➡️The LATAM Energy & Environment startup industry is in its development stages, with a significant focus on seed and early-stage funding.
Despite fewer startups, the sector attracts more capital than Healthtech and Foodtech, indicating its strategic importance and capital-intensive nature.
➡️South America dominates in terms of funding and the sample size of startups.
South America dominates the LATAM Energy & Environment startup landscape, hosting 74.6% of the region’s startups and securing over 90% of total industry funding, indicating its central role in innovation and investment in this sector.
➡️Regional Powerhouses: Brazil, Chile, and Colombia are the leading countries in the LATAM Energy & Environment sector.
Brazil, particularly São Paulo, leads in funding and startup activity, followed by Chile, with major contributions from companies like HIF Global.
➡️São Paulo leads the LATAM Energy & Environment sector with a commanding lead over Mexico City.
Other key cities include Bogota, which is rapidly rising, and Cordoba, which has shown significant improvement.
LATAM’S Energy & Environment Industry Overview
The Energy & Environment startup industry in LATAM is still in its early stages, with most startups primarily securing seed and early-stage funding based on the data from Crunchbase. In recent years, while the number of funding rounds has decreased, the size of these rounds has grown significantly. Compared to other sectors like Healthtech and Foodtech, Energy & Environment attracts relatively more funding but supports fewer startups and fewer ranked cities in the region. The industry is largely driven by sub-industries such as Energy, Cleantech, and Sustainability, which account for the majority of the Energy & Environment startup activity in LATAM.
Energy & Environment funding in LATAM reflects high capital needs and strategic importance despite fewer startups
Energy & Environment secures 5.8% of total industry funding, outpacing both Healthtech (1.6%) and Foodtech (2.4%) despite having fewer startups. This difference suggests that while Healthtech and Foodtech have more startups, Energy & Environment ventures are seen as more capital-intensive and strategically vital. The higher funding reflects investor confidence in the long-term impact and necessity of innovations in energy and environmental sustainability, positioning this sector as a critical focus area compared to the broader but less capital-intensive fields of Healthtech and Foodtech.
LATAM Energy & Environment Startup Funding Heavily Dependent on Few Large Deals Over the Last 7 Years
The Energy & Environment startup sector in LATAM has seen big swings in funding from 2018 to 2024, mostly driven by a few large investments based on the data from Crunchbase. For example, the high funding in 2018 was due to a US$ 100M round for FS Fueling Sustainability, 2020’s peak was because of GDSun’s US$ 124M, and 2024’s record funding was thanks to HIF Global’s US$ 164M. If you remove these big rounds, the overall trend shows a decline in funding from 2018 to 2022, with a slight recovery in 2023 and a stronger rebound in 2024. This indicates that while there’s growing interest in the sector, consistent and widespread investment is still developing, and the industry currently relies heavily on a few large deals.
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Brazil, Chile and Colombia has the largest amount of funding in Energy & Environment Industry in LATAM
In the LATAM Energy & Environment startup sector, Brazil, Chile, and Colombia stand out as the most significant countries in terms of funding based on our research using Crunchbase’s funding data. Brazil leads the region, with São Paulo being a major hub, home to large funding rounds like GDSun’s $124M in 2020 and FS Fueling Sustainability’s $100M in 2018. Chile follows closely, highlighted by the region’s largest single round—HIF Global —and additional significant investments like Ceibo’s US$ 30 M Series B. Colombia, while having less total funding, has made its mark with notable rounds, including Bia Energy’s US$10.5 M Series A in Bogotá in 2023.
Seed and Early-Stage Funding Rounds are most common among the LATAM Energy & Environment Industry
The predominance of seed and early-stage funding rounds in the LATAM Energy & Environment startup sector per Crunchbase data indicates that the industry is still in its early stages of development. This high frequency of seed rounds suggests that many startups in the region are in the process of validating their business models and building foundational traction. The relatively fewer large funding rounds (such as Series A and B) imply that only a small number of startups have reached the stage where they are ready to scale significantly, reflecting a nascent ecosystem where most companies are still emerging rather than established.
Energy is the largest sub-industry of Energy & Environment in LATAM
In the Energy & Environment sector in LATAM, the distribution of startups reveals distinct regional priorities that differ from global trends. While Energy remains the most dominant sub-industry both globally and in LATAM, accounting for 38.3% of startups, the regional focus diverges significantly beyond this point. Globally, Clean Energy is the second most dominant sub-industry, but in LATAM, it ranks fifth, representing only 12.77% of startups. Instead, Cleantech (17.02%) and Sustainability (14.04%) take on more prominent roles in the region, reflecting a stronger entrepreneurial drive toward innovative environmental technologies and sustainable practices. Waste Management, though a smaller niche globally, also finds itself in a similar position in LATAM with 4.68% of startups.
Sub-Region Analysis of the Energy & Environment Startup Industry
We analyzed the sub-regions of LATAM in terms of the percentage of funding, percentage of startups, and the number of ranked cities within the Energy & Environment industry to identify regional strengths and disparities in ecosystem development. The analysis clearly showed that South America is the strongest region capturing a big majority of startups, funding and ranked cities.
South America Hosts 74.6% of LATAM’s Energy & Environment Startups, Securing 90.1% of Regional Industry Funding
The distribution of startups and funding in the Energy & Environment sector across LATAM reveals a clear concentration of resources and activity in South America. South America dominates the region, hosting 74.6% of the region’s Energy & Environment startups and capturing an overwhelming 90.1% of the total industry funding. This indicates that South America is the primary hub for innovation and investment in this sector, with a well-established ecosystem that attracts the majority of venture capital.
In contrast, Central America and the Caribbean, despite accounting for a quarter of the region’s startups (25.4%), struggle to attract a proportional share of funding. Central America, with 16.7% of the startups, only secures 6.2% of the funding, while the Caribbean, representing 8.8% of startups, garners a mere 3.7% of the funding. These figures suggest a significant disparity between the entrepreneurial activity and the financial support available in these sub-regions.
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South America has over 3 times more ranked cities in Energy & Environment than its counterparts.
When analyzing the number of ranked cities in the Energy & Environment sector across LATAM, a clear regional imbalance emerges. South America leads with 31 ranked cities, making it the most significant hub for innovation and activity in this sector. This concentration of ranked cities aligns with South America’s dominant share of startups and funding, reinforcing its role as the central powerhouse within the region.
In contrast, Central America and the Caribbean have far fewer ranked cities, with 7 and 8 respectively. Despite this, these regions still manage to host a notable percentage of startups, particularly in Central America. However, the lower number of ranked cities suggests that these areas may lack the infrastructure, resources, or recognition needed to fully develop their ecosystems to the level seen in South America.
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Best Places for Energy & Environment Startups in Latin America
Based on our analysis of industries using dozens of parameters to identify which locations excel in specific sectors, Latin America accounts for 5.1% of all cities globally in the Energy & Environment industry, as well as 11.7% of all ranked countries for this sector. Below, we have listed the top cities and countries that empower LATAM’s Energy & Environment industry.
Top Cities for Energy & Environment Startups in LATAM
Latin America has 11 cities ranked in the 2024 Energy & Environment industry, making up 5.1% of the globally ranked cities in this sector. Although this is down from 12 cities in 2023 due to Curitiba dropping off the list, the cities that remain should be celebrated for their continued presence. These 11 cities are among a select group leading innovation in the Energy & Environment field on a global scale. While they represent only 9.8% of all ranked Latin American cities in the Global Startup Ecosystem Index 2024, their inclusion highlights their importance in driving progress in the Energy & Environment industry.
Sao Paulo’s Commanding Lead in LATAM’s Energy & Environment Sector
Sao Paulo continues to dominate the LATAM Energy & Environment sector, with a score that is 72.5% higher than that of Mexico City, the second-ranked city. This significant lead underscores Sao Paulo’s unparalleled strength in the industry, reflecting its well-developed ecosystem and its role as a central hub for innovation in the region. The vast gap between Sao Paulo and other cities highlights the city’s exceptional capacity to attract investment and foster industry growth.
Mexico City: A Strong Regional Leader with Growth Potential
Mexico City holds the second position in the Energy & Environment sector, but there is a 29.7% gap between it and Bogota, which ranks third. This substantial difference suggests that while Mexico City is a strong regional leader, it still has considerable room to grow to catch up with Sao Paulo. Interestingly, Mexico City’s overall regional rank is closer to its industry-specific rank, indicating a consistent performance across various sectors, though it has the potential to further specialize and close the gap with Sao Paulo.
Bogota: A Rising Star in Colombia
Bogota has made a notable rise to third place in the LATAM Energy & Environment rankings, narrowing the gap with Mexico City to just 29.7%. The city has also managed to place higher in this industry compared to its overall regional ranking, indicating a stronger performance in the Energy & Environment sector. This 3-position jump from 2023 signals Bogota’s growing influence and competitiveness, particularly in comparison to Santiago, which it now surpasses by a narrow 0.5%. Bogota’s rise suggests it is rapidly becoming a key player in the region, with the potential to challenge Mexico City’s position in the future.
Medellin: A Consistent Performer with Strong Industry Focus
Medellin, ranking 5th in the Energy & Environment sector, shows a 10.3% gap behind Bogota. Despite a slight drop in ranking, Medellin’s performance in this industry is notably stronger than its overall regional rank, indicating that the city has a particular strength and focus in this sector. This consistent presence in the top ranks underscores Medellin’s solid and specialized ecosystem, making it a significant player in Colombia’s energy and environmental innovations.
Cordoba: Rapid Advancement in Argentina
Cordoba has made significant progress, moving up two spots to 7th place, and reducing the gap with Medellin to 15.4% from 36.6%. What’s particularly impressive is that Cordoba outperforms its overall regional ranking in this specific industry, highlighting its growing specialization and influence within Argentina. The city’s ability to close the gap with higher-ranked competitors indicates that it is on a promising upward trajectory in the sector.
Porto Alegre: Stability with Competitive Edge
Porto Alegre, despite a slight drop in the rankings, maintains a 11.6% gap with Cordoba, compared to 2023’s gap of approximately 31.5%. The city’s industry-specific ranking is stronger than its overall regional rank, suggesting that Porto Alegre has carved out a significant niche in this sector. Its steady performance amidst increasing competition points to a well-established ecosystem that continues to play a key role in the region.
Leon joins LATAM’s Top 10 for the Energy & Environment Industry
The capital of Guanajuato, Leon has climbed to the 10th position, with a narrow 3.3% gap behind Porto Alegre. This rise highlights Leon’s growing presence in Latin America’s Energy & Environment sector, significantly outperforming its overall regional ranking. Leon’s higher industry rank compared to its general standing suggests that it has developed a specialized strength in this sector, positioning it as an emerging hub with the potential to climb further in the rankings.
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Top Countries for Energy & Environment Startups in LATAM
Brazil’s Steady Dominance with Growing Competition
Brazil remains firmly at the top of the LATAM Energy & Environment sector, maintaining its 1st place position with no change from 2023. Notably, Brazil’s difference from the overall LATAM rank is 0, indicating that its dominance in the Energy & Environment sector aligns perfectly with its overall standing in the region. However, the gap between Brazil and Colombia has narrowed from 40.8% in 2023 to 29.6% in 2024. This shrinking gap suggests that while Brazil is still the leader, it faces increasing pressure from Colombia, which is rapidly closing in.
Colombia’s Rapid Ascent and Sector-Specific Strength
Colombia has risen to 2nd place in 2024, up from 3rd in 2023, replacing Chile, which is no longer ranked in 2024. The country’s industry score is now just 29.6% lower than Brazil’s, compared to a 40.8% gap in 2023. Importantly, Colombia’s rank in the industry matches with the overall LATAM rank, meaning its performance in the Energy & Environment, indicating that Colombia’s growth in this sector is not an exception but rather part of a broader trend of economic and startup ecosystem strengthening. Colombia’s rise in the rankings, coupled with its ability to overtake Chile, shows that it is becoming a more formidable competitor, particularly in this industry.
Mexico’s Significant Improvement and Sectoral Outperformance
Mexico has made a significant leap from 5th place in 2023 to 3rd place in 2024, closing the gap with Argentina and surpassing it. The gap between Mexico and Argentina, which was 62.5% in 2023 (with Argentina leading), has now reversed, with Mexico leading Argentina by 11.3% in 2024. Mexico’s difference from the overall LATAM rank is +1, suggesting that while Mexico is performing well in the Energy & Environment sector, compared to its overall regional performance.
Argentina Holds Steady but Underperforms Relative to Overall Strength
Argentina has maintained its 4th place position in 2024, with no change from 2023. However, the gap between Argentina and Mexico has widened, with Mexico now leading by 11.3%. Argentina’s difference from the overall LATAM rank is +1, indicating that its performance in the Energy & Environment sector is slightly above its overall regional standing.
Mexico narrows down score gap with Argentina
In 2023, Mexico was significantly behind Argentina by 38.5%. However, in 2024, Mexico has not only closed this gap but surpassed Argentina, leading by 11.3%. This turnaround highlights Mexico’s improvement in the Energy & Environment sector, showing that it is now outpacing Argentina and positioning itself as a stronger competitor among the four countries in LATAM. This shift underscores Mexico’s growing competitiveness and its ability to narrow the gap with the leading nations in the industry.
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A Few Key Take-Aways
➡️ For Startups: The Energy & Environment sector in LATAM is still in its early stages, but it’s gaining momentum with significant opportunities for growth. Focus on startup ecosystems that show a strong alignment with your startup’s sub-industry, such as Energy, Cleantech, or Sustainability.
➡️ For Ecosystem Developers: Strengthening the infrastructure and support systems in countries that already show potential, like Brazil and Chile, can further solidify their positions as regional leaders. Given the sector’s capital-intensive nature, policies that attract more large-scale investments and support startups beyond the seed stage could significantly boost industry maturity and long-term sustainability.
➡️ For Corporate Innovators: The LATAM region, especially South America, presents a strategic opportunity for corporate innovation in the Energy & Environment sector. With a growing focus on sustainable practices and green technologies, engaging with local startups in this sector can offer access to innovative solutions and new markets. By investing in and collaborating with these emerging ecosystems, corporations can drive impactful change while benefiting from the region’s unique strengths in renewable energy and environmental sustainability.
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Methodology
We ensure accuracy in our rankings by relying on objective, quantifiable data instead of subjective tools like surveys. Our algorithm, based on data from the StartupBlink map and global data partners, minimizes assumptions and focuses on measurable results. Yearly improvements enhance algorithm accuracy, with momentum changes influenced not only by ecosystem achievements but also by these enhancements.
The algorithm is refined using data from the StartupBlink Global Map, covering 10-15% of global startup entities. Scores are determined uniformly, but sample sizes vary by location and data source. To address low sample size issues, we collaborate with 100 Ecosystem Partners, offering government agencies complimentary administrative access to curate datasets. Rankings involving Unicorns and Exits consider startup valuations, applying filters to exclude government entities and corporate spin-offs.
The Methodology used in the 11 industry rankings, including Energy & Environment and 91 sub-industries is identical to the algorithm of the global rankings while taking into account the startup database of each industry. You can find more information about our algorithm in this article.
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StartupBlink helps governments, multilateral organizations, and leading corporate startup programs with knowledge and tools to map, brand, and accelerate innovation. The StartupBlink interactive startup ecosystem map tracks over 150,000 ecosystem stakeholders worldwide.
The StartupBlink annual Global Startup Ecosystem Index, which ranks the startup ecosystems of over 1,000 cities and 100 countries, is read by hundreds of thousands of decision-makers around the world.
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