LatAm Tech Weekly
#157 - Powered by Nasdaq: Fed cut rates, Latin American Transformation Report by Altantico, deals of the week... and much more!
Happy Sunday!
WHAT A WEEK! I’m not even sure where to begin…
The Fed cut rates by 50bps for the first time since 2020, while Brazil’s Central Bank (Copom) went the other way and raised its benchmark rate by 25bps. Atlantico dropped its highly anticipated Latin American Digital Transformation Report, 40 events took place during São Paulo Tech Week, and I had the privilege of speaking at the renowned Global SME Forum, also hosted in the city. Oh, and Google just rolled out a new AI feature that turns research papers into podcasts—yes, all in one week!
Speaking of the new AI feature, of course I had to try it out with last week’s LatAm Tech Weekly….
I’ve got to say, it sounded pretty good! But I’m still figuring out the best format for it or where to post it. I’ll keep you posted on what I land on. Got any ideas? Feel free to send them my way!
Finally, (but not less important) this week LatAm Tech Weekly reached an important milestone: 10k subscribers with an average open rate of ~60%! Thank you all for supporting my work. It’s been three years, and I could have not imagined it would go so far… Thank you, thank you, thank you
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Opinions expressed here are solely my own and does not represent those of people, institutions, organizations that I may or may not be associated with in any capacity, unless explicitly stated.
On to some market update…It finally happened— the Fed cut rates by 50bps, marking the first reduction since the pandemic began. This move, which had been highly anticipated, brings the target fed funds rate down to a range of 4.75% to 5%. While there was some debate over whether the cut would be 25 or 50bps, the market wasn't surprised by the final decision—hence the slight uptick in the 10Y, moving from 3.68% to 3.72%.
For private market pros, this sharper-than-expected rate cut is a breath of fresh air, especially as it lowers the cost of capital for dealmakers. But before we get too excited, there are still risks on the horizon. While public markets have reacted positively, with stock indexes hitting new highs, the impact on private markets—particularly in VC and PE—could take longer to materialize. Private companies don’t have the same access to easy, collateralized credit as larger, more established firms, so the decision to take on cheaper debt isn’t always straightforward…
Meanwhile, the Fed’s focus is clearly shifting, signaling a move away from aggressive inflation-fighting tactics toward a more balanced approach. Powell mentioned that they’ve gained confidence inflation is heading toward their 2% target, but he also stressed that it remains somewhat elevated, so they're not out of the woods yet.
Looking ahead, we can expect more rate cuts before the year is out. This easing is good news for dealmakers, as it could finally help close the gap between buyers and sellers, particularly in smaller M&A deals and PE add-ons. However, for the larger, market-defining deals like jumbo tech IPOs and big buyouts, we’ll likely need more easing to see real movement.
In the bigger picture, the path forward is still uncertain. The Fed is searching for the elusive “neutral rate,” which even Powell admits is hard to pin down. While the current easing cycle is meant to boost growth, the broader impact on private markets will take time to fully unfold. It’s a delicate balancing act between supporting the economy and avoiding inflation flare-ups, but for now, it’s a step in the right direction… the last quarter of the year should be, to say the least, exciting!
Moving on, before you ask, no, my summary of Atlantico’s report didn’t come from an AI-generated podcast (though I did test it out!). There’s nothing like reading the full report to really digest the information and give you a thoughtful summary. While the summary below is a good alternative if you are feeling lazy, nothing replaces the full read. Without further ado, let’s dig in!
"LatAm Leads the Way" is the theme for the 5th annual Atlantico Latin America Digital Transformation Report, which introduces the "Triumphant Three" and emphasizes why market dynamics are more important than market size. Latin America has a 666M population, and a combined GDP that would make the world’s 3rd largest economy (when combining Brazil, Mexico, Colombia, Chile and Argentina). We also make up for the third largest internet user base in the world - surpassing even the U.S. On the flip side, it is also true that LatAm is very unequal with expressive variations both within a specific country, and also among the different nations.
In a region shaped by scarcity and adversity, champions emerge stronger and more resilient. Latin American companies not only achieve lasting success with stickier market caps but also deliver higher returns and market share. The focus on market dynamics over size is key, with returns like ROE and ROIC being the highest in the world, proving that commanding scarce resources leads to significant gains.
The region’s venture capital returns are also notable, with 24% of LatAm VC funds ranking among the top 5% globally and 52% being in the top quartile. As Latin America continues to close the gap in tech penetration compared to global peers, it is set to create hundreds of billions of dollars in new value for the local economy.
The region’s "Right to Win" comes in part from its leadership in the usage of WhatsApp, both for personal and business purposes, and its reliance on digital influencers, which opens new frontiers for tech innovation. Latin America also excels in fintech, with Brazil's Pix instant payments system becoming one of the most successful financial services products ever launched, based on user penetration and frequency. Furthermore, as the world turns its attention to sustainability, Latin America's global prominence in natural resources like forests, essential minerals for energy transition, and clean water supplies positions the region to lead in climate innovation.
General news:
Insight Partners is nearing the close of its 13th fund, expected to exceed $10 billion in capital commitments, according to the Financial Times. Recently, two portfolio companies were acquired: Recorded Future was sold to Mastercard for $2.65 billion, and Own was acquired by Salesforce for $1.9 billion, significantly lower than its 2021 valuation.
Visa has launched its "click to pay" solution in Brazil, allowing users to complete online purchases with a single click. After six months of testing with retailers like Ingresse, Lojas Renner, Cantu Pneus, and Daki, this new payment method aims to reduce cart abandonment and enhance security through tokenization.
EBAC, a Brazilian EdTech focused on employability and career transitions, is on track to meet its 2024 revenue target of R$ 150 million. The company aims to scale its operations and expand geographically across Spanish-speaking LatAm, building on its existing hub in Mexico, with the goal of reaching R$ 500 million in revenue over the next four years. Its last funding round in 2021 raised $15 million from investors such as Baring Vostok, Begin Capital, FJ Labs, and Concentric.
UK-based healthtech MANUAL has raised £29.2M ($213M) in its latest funding round, backed by Felix Capital, Cherry Ventures, and new investors like Octopus Ventures. MANUAL, which acquired Brazil’s Toni Saúde in 2021, plans to expand its presence in the country, its second-largest market. The startup focuses on men's health, offering treatments for hair loss, insomnia, and erectile dysfunction, with recent expansion into weight loss solutions using GLP-1 drugs.
In August, Crunchbase's unicorn club welcomed eight new startups, adding $25 billion to the group's total valuation. So far in 2024, 79 new unicorns have been added, totaling $152 billion in value, though still short of 2023's figures.
Rodrigo Terron, former CEO of Rocketseat and Shawee, has launched NewHack, a R$ 5M early-stage venture capital fund.
Deals:
Brazilian HRtech Sólides has acquired RHGestor to expand its reach into mid-sized and large companies. This move comes just six months after Sólides bought a payroll business. RHGestor, founded in 2019, has over 500 clients and 250,000 users on its platform. The acquisition strengthens Sólides’ ability to serve the growing demand in mid-sized companies, while also enabling cross-selling with its payroll tools.
Zamp, now controlled by Mubadala, has expanded its portfolio in Brazil by acquiring the local franchise rights for Subway, in addition to its existing Burger King and Popeyes brands. This move follows its recent purchase of Starbucks Brazil from the troubled SouthRock Capital, which also managed Subway until late last year.
Koggi, a Colombian proptech startup founded in 2021, has secured $3.1 million from Second Century Ventures (SCV), the investment arm of the National Association of Realtors. This funding will enhance its AI-driven platform, aimed at simplifying home buying in LatAm by connecting major construction firms with buyers and streamlining financing.
General news:
Microsoft and BlackRock have announced a $30B fund to invest in AI infrastructure technologies. The Global AI Infrastructure Investment Partnership will focus on energy efficiency for data centers, addressing the rising energy demands of AI.
Brazil’s state-owned postal service, Correios, is embracing fintech to diversify revenue and ensure sustainability. With declining demand for traditional mail services, Correios plans to transform its 12,000+ branches into financial service hubs, offering digital accounts, payments, and loans, especially in underserved regions. Inspired by France’s La Poste, this move aims to create a new revenue stream and enhance financial inclusion, while positioning Correios as a digital bank, fostering economic growth and customer loyalty in Brazil.
The Central Bank of Brazil has authorized Wise to operate as a payment institution, allowing the UK-based fintech to issue prepaid accounts and connect directly to Brazil's payment systems, including Pix. This move will enable Wise to offer accounts with Brazilian banking details and Pix keys globally.
Pomelo, a fintech specializing in card infrastructure, has appointed Carlo Enrico, former Mastercard President for Latin America, as an independent board member and investor.
Sebrae and ApexBrasil have launched a R$ 175 million initiative to support the internationalization of micro and small enterprises (MPEs) in Brazil, particularly in the North and Northeast regions. This partnership aims to enhance competitiveness in global markets through training and promotional efforts.
The Brazilian government, in partnership with Banco do Brasil, has launched the MEI Card, tailored for individual micro-entrepreneurs (MEIs). Available in debit and credit options with no annual fee, it aims to streamline business operations.
Salesforce Ventures has expanded its Generative AI fund to $1 billion, aimed at accelerating investments in AI startups globally. The fund will support innovative companies utilizing AI to drive growth across sectors like health, finance, and customer service.
CANIETI proposes turning Cancun into a global tech hub by leveraging its tourism infrastructure and attracting tech companies through tax incentives. The initiative aims to create a local ecosystem for software development and innovation, driven by collaboration between academia, government, and business sectors.
Ripio has launched a DeFi-based credit card in partnership with Visa, allowing users to use digital assets as collateral in liquidity pools. This innovative product offers a decentralized alternative to traditional credit, without selling crypto holdings.
Amazon plans to end remote work and require all employees to return to the office by 2025. CEO Andy Jassy emphasized that in-person collaboration leads to greater efficiency and innovation, criticizing the rise of unnecessary virtual meetings during the work-from-home period.
Google has announced it will redesign its environmental plan for a data center in Cerrillos, Santiago, due to concerns about its impact on the Santiago Central Aquifer.
Deals:
Finkargo, the colombo-Mexican fintech addressing financing gaps in international trade for SMEs, has secured $95 million in an extension of its Series A round. Led by QED Investors and Community Investment Management, with contributions from existing investors like Quona and Flybridge, the funding includes $20 million in equity and $75 million in debt.
Healthtech startup Horuss AI raised R$ 17M in a Seed round led by Headline Ventures, with participation from investors including Ricardo Vilella Marino (Itaú Unibanco) and Sergio Eraldo de Salles Pinto (Legend Investimentos).
Connectly has raised R$ 110M in a Series B round led by Alibaba, with participation from Unusual Ventures, Volpe Capital, RX Ventures, and Falabella Ventures. Founded in 2020, the Silicon Valley-based startup uses AI to enhance marketing and sales through WhatsApp.
German quick-commerce startup Flink has secured $150M in a new funding round, defying the sector's recent struggles. The round, led by BOND, Mubadala, and Northzone, with retail giant REWE and two undisclosed investors, included $115M in equity and $35M in debt. While Flink didn’t disclose its valuation, sources say it's close to $1B.
General news:
Between 2019 and 2023, venture capital funds invested R$133 billion in Brazilian startups. However, a recent study reveals that VCs now need R$400 billion in liquidity through M&As and IPOs to generate sufficient returns for investors.
The cancellation and sale of licenses by fintechs in Brazil are on the rise, reflecting market challenges and a "natural selection" process. After a surge in approvals for payment institutions (IP) and Direct Credit Societies (SCD), companies like Klavi are acquiring licenses, while others, like Ame Digital and N26, are looking to sell. Experts view this as part of the market's maturation, with some fintechs struggling to sustain regulated operations. Despite tougher competition, there is room for growth, especially in niche markets, as the fintech landscape consolidates.
Amazon has launched Sabiá, a carbon credit platform in partnership with BovControl and Belterra, aiming to become a market maker in the voluntary carbon market. The initiative seeks to drive reforestation and agroforestry in Brazil, with a goal to enroll 3,000 farmers and cover 20,000 hectares by year-end.
Executives from eB Capital, Maraé Investimentos, and BCG have launched the Brazil Climate Institute in New York. The platform aims to unite private capital and global markets to address climate issues in Brazil.
Weg will invest R$ 670 million over five years to expand and verticalize its transformer and electric motor operations in Brazil and Mexico. The funds will support a new wire manufacturing plant in Atotonilco de Tula, Mexico, and upgrades at factories in Itajaí and Guaramirim, Brazil.
Despite its wide range of features, WhatsApp Business remains underutilized by companies, even in Brazil. According to Guilherme Horn, head of WhatsApp for Brazil, India, and Indonesia, businesses struggle to adopt a "conversational mindset" and often replicate outdated call center experiences on the platform.
Despite the Brazilian Supreme Court's ban on X (formerly Twitter), users found the app functional on Sept. 18 due to an update that altered its operational structure. The update, using Cloudflare's dynamic IPs, makes blocking the platform harder as these IPs are shared with essential services.
US Media has appointed Bruno Belardo as VP of Sales in Brazil. With nearly 20 years of experience at companies like Spotify, Facebook, BuzzFeed, and LinkedIn, and as former GM for Latin America at Jellysmack, Bruno is expected to drive innovation in online advertising.
Beacon Founders, a private banking platform for startup founders, is expanding into Latin America and has announced Vanessa Muglia as a new partner. Joining founders Igor Piquet and Ricardo Duarte, Muglia will help raise a second equity pool targeting startups from Argentina, Chile, Colombia, and Mexico, aiming for 30-40% representation.
SONDA Brasil has launched its Innovation Hub, part of its Natural Resources vertical, focused on driving sustainability and operational excellence in the Oil & Gas, Mining, and Steel industries. The hub will promote digital transformation by co-creating advanced tech solutions with academic institutions, startups, and tech providers.
LetyMind, a Peruvian startup innovating in Talent as a Service (TaaS), recently won the Startup Perú competition and joined Microsoft for Startups.
Deals:
Bicycle Capital, led by Marcelo Claure, spearheaded a $55 million Series B funding round for Brazilian startup Cayena, which streamlines transactions between suppliers and buyers in the wholesale food sector. The round saw participation from Picus Capital, FEMSA Ventures, Globo Ventures, and Canary. With the new funds, Cayena plans to expand from 100 to 500 cities in Brazil and aims for $200 million in sales by the end of 2024.
Newly launched ROCK has secured R$300M in funding from Hindiana to become Brazil’s first "encantech"—a company focused on customer engagement. Formed through the acquisitions of companies like Directo.ai and Propz, ROCK offers data-driven loyalty and CRM solutions to over 320 clients, including Itaú Shop and Arezzo.
Mevo, a Brazilian healthtech, secured R$110M in a Series B led by San Francisco-based Matrix, marking Matrix’s first investment in Brazil. With backing from Jefferson River Capital, the funding will drive Mevo’s tech development and expansion of its digital prescription platform, aiming to serve over 10 million patients.
General news:
VOX Capital is launching its fourth fund, "Tech for Good Growth II," aimed at investing in startups with social and environmental impact. Set to operate by October or November, the fund will invest between R$10M and R$40M per startup, targeting around 10 companies.
André Penha, co-founder and former CTO of Quinto Andar, will take over as CEO of IBBX, a Brazilian company developing wireless energy transmission technology. Starting October 1st, Penha's goal is to make IBBX the global standard for wireless power. With clients like Embraer, Nestlé, and Unilever, IBBX holds global patents and has a pipeline worth over R$250M.
Alibaba has launched the Qwen2.5 family of open-weight AI models, ranging from 0.5B to 72B parameters. These models, which include specialized versions for coding (Qwen2.5-Coder) and mathematics (Qwen2.5-Math), are designed to support a wide range of tasks. Despite the scale and capabilities, Qwen models appear to be heavily censored, often returning errors when queried about sensitive topics related to Chinese history.
Meta, alongside companies like Spotify and Prada, has warned the EU that its tech regulations could stifle AI innovation. In an open letter, over 20 companies said the bloc's inconsistent rules risk Europe falling behind in the AI race, limiting productivity and growth.
Deals:
Eletromidia has announced the acquisition of 4yousee, a provider of software solutions for digital signage and ad campaign management. This move strengthens Eletromidia's position in the out-of-home (OOH) ad market by enhancing its ability to offer advanced analytics and data-driven insights.
Curitiba-based AI startup MeetRox has raised R$ 2.5M in a Seed round led by Stamina VC, with participation from Alta Escala, Raio Capital, and angel investors from Ebanx, Olist, and Pipefy.
General news:
A new study reveals that 54% of investments in Generative AI, totaling $41.7B over the past four years, are concentrated in three companies: OpenAI (21.4%), Anthropic (18.9%), and xAI (13.3%). While Latin American venture capital funds favor application-layer startups due to high costs of training models like LLMs, concerns about inflated valuations persist. Brazil is set to invest R$23B in AI by 2028, with key sectors including marketing, health, and finance. Responsible AI adoption is crucial, addressing challenges like bias and data privacy.
Time Two Coffee, a Brazilian startup founded by André Ribeiro, has launched an innovative "virtual coffee shop" that turns informal conversations into learning opportunities. The platform connects users with experts ("cafezeiros") who share real-life experiences in a casual setting, offering guidance on various challenges.
Lemon has become the first crypto app in Peru to enable interoperable payments with both local currency (Peruvian soles) and cryptocurrencies. Users can now make QR payments and receive Bitcoin cashback.
The Arab-Colombian Chamber of Commerce and Dubai University have launched the SoftLanding Program to support Latin American tech startups in expanding into new markets. Taking place from October 6-17 in the UAE, the program includes participation in Gitex Global-North Star, where selected startups can pitch to international investors.
A study by Febraban and Accenture highlights 28 trends and 135 underlying technologies set to reshape Brazil's banking sector. Generative AI (GenAI) stands out, potentially boosting productivity by 25-35%, while also enhancing customer experiences through hyper-personalization. Other key technologies include quantum computing, digital identity, tokenization, and blockchain.
Qualcomm has approached Intel for a potential acquisition, which could become the largest deal in tech history, according to the Wall Street Journal.
OpenAI's $6.5 billion funding round is oversubscribed, with demand exceeding billions. Investors will find out on September 20 if they made the cut, valuing OpenAI at $150 billion, up from $86 billion previously. Key backers like Microsoft, Nvidia, and Apple are likely to participate, while Sequoia Capital will not, as it has invested in a rival AI startup. Thrive Capital is leading the round with a $1.25 billion investment. OpenAI has not commented on the funding details.
Deals:
Noodle, the fintech for influencers, secured a R$ 5M seed investment from QED, known for backing major startups like QuintoAndar. Founded in 2020, Noodle initially targeted musicians but found success after pivoting to influencers and content creators in 2023, growing transaction volumes over 10x. The platform offers AI-driven credit based on social media data, allowing influencers to receive advances on future earnings.
Pinbank has acquired Polocred, with approval from Brazil's Central Bank, expanding its credit portfolio and customer base by over 250% by 2025.
Quona Capital has made a new investment in a Brazilian fintech focused on credit, payments, and cash flow management for SMEs. While the company's name remains undisclosed, Quona's managing partner, Jonathan Whittle, highlights its potential to democratize financial tools typically reserved for large corporations.
Salvadoran fintech Ábaco secured $4M in a pre-seed round to develop financial products and expand into new Latin American markets. Founded by Alejandro McCormack, Carlos Villalobos, and Moisés Hasbún, Ábaco offers a fully digital platform for SMEs, providing liquidity solutions and managing invoices.
If you like tech events, I encourage you to access my LinkedIn post that has the entire list!!!!
Gartner CIO & IT EXECUTIVE
Dates: Sept 23-25
Location: São Paulo
Overview: Future of IT
Microsoft AI Tour - São Paulo
Date: September 26
Location: São Paulo
Overview: AI (including opening with Satya)
Bossa Summit 2024
Dates: Sept 25-26
Location: São Paulo
Description: his event is a major gathering for the Venture Capital market, featuring over 400 speakers, extensive networking opportunities, and a range of workshops and mentoring sessions. It's designed to bring together more than 10,000 attendees, offering around 200 hours of content on business and innovation.
LAVCA Week 2024
Date: October 8-11
Location: Conrad NY Downtown
Description: LAVCA Week convenes leading private capital investors from Latin America and around the globe each year for a series of meaningful discussions and private meetings covering the latest trends in private equity, venture capital and other private capital strategies. Participation at LAVCA Week is carefully curated and capped. LAVCA Members, non-member private capital investors and qualified institutional investors are invited to attend. LAVCA Members have access to special early bird rates through 29 August 2024.
Snowflake World Tour - The Era of Enterprise AI (São Paulo)
Date: October 8
Location: São Paulo
Description: Snowflake’s global event gathering the technology industry to discuss innovations to accelerate AI development within enterprises. The event will have over 15 learning sessions and several networking opportunities.
AsaaS Connect
Date: October 10
Location: São Paulo
Description: This event is designed to bring together leaders and professionals interested in the latest trends in technology, business, and finance. The one-day event offers a comprehensive experience, including presentations from top industry experts, networking opportunities, and insights into innovative solutions that can drive business success. Asaas Connect 2024 follows the success of its previous edition, which attracted around 1,500 participants and featured notable speakers such as Randi Zuckerberg, who discussed the future of the metaverse. I will be a speaker… see you there?!
REC ‘n’ Play
Date: November 6-9
Location: Recife
Description: Annual innovation and technology festival aimed at fostering creativity, technology, and entrepreneurship. It brings together professionals, students, and enthusiasts through workshops, lectures, and cultural activities, providing a platform for learning, networking, and collaboration. The event highlights Recife's role as a growing hub for innovation in Brazil, connecting participants with industry experts and new trends.
Stats Conf
Date: November 8-9
Location: São Paulo
Description: Bitcoin only technology event - crypto, finance, blockchain
#fswk24 - O Momento Atual dos VCs na Saúde
Date: November 6
Location: Rio de Janeiro
Description: This event focuses on the current landscape and opportunities for venture capital investments in the healthcare sector. Attendees will gain insights into the latest trends, challenges, and strategies for investing in health tech startups and innovative healthcare solutions.
The Latin American Digital Transformation Report 2024 - By Atlantico
The GenAI impact in LatAm - By Grão VC
Top 8 Cheat Sheets on AI - By Medium
Wild Wild Country - Netflix documentary (my new binge on the treadmill)
“We can’t pray or wish for diversity. We need intervention, attention, mentoring and development of those minorities to ensure all are represented in our organizations.”
Indra Nooyi, former CEO of PepsiCo