LatAm Tech Weekly
#146- Powered by Nasdaq: New Layout, Q2 figures, deals of the week… and much more!
Happy Sunday!
This week we will dig in on the just released venture figures for Q2 2024. Yep, you read it right – in a split second we are already at mid year. The good news is that things are starting to improve… let’s take a look at the data!
P.S: Do you like the new layout? Comments, suggestions, feedbacks… always well appreciated!
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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.
Per CB Insights State of Venture Report: No surprises: AI startups continue to steal the show. Per Carta’s First Cut – State of Private Markets Q2 2024, valuations continued to rise, albeit gently and not uniformly across stage and round sizes seem to have plateaued in many places.
In Q2’24, venture funding grew 8% QoQ to $65.7B – driven primarily by mega-rounds in the AI sector, such as xAI’s $6B deal. Up for the second straight quarter. On the other hand, the number of deals slid for the 9th quarter.
28% of all VC dollars went to AI startups – the hype is real.
Average deal size globally is $14.4M, +17%; in LatAm $1.9M
Median pre-money valuations ticked upward at most venture stages, while Series D and E+ saw rapid increases (on very low volume).
Global unicorn count at 1,239 – with 14 new unicorns in the quarter
Top 5 investors globally: SOSV, A16z, General Catalyst, Lightspeed Venture Partners, Khosla Ventures
Looking at LatAm, the region saw 123 deals with $0.8B in funding – 74% being early stage
Top 5 rounds in the region:
66 M&As, IPO: 0
General news:
Starting today, Brazil's new regulation, CMN Resolution No. 5,112, allows credit card debt portability. Customers can now transfer their outstanding balances, including revolving credit and installment payments, between institutions for free. Additionally, transparency in credit card statements has been improved with BCB Resolution No. 365 to help reduce default risks and over-indebtedness. This move aims to enhance financial clarity and consumer protection in the credit card market.
Google Play Points has launched in Brazil, rewarding users for engaging with apps on the platform. Users earn points by purchasing games, movies, books, and in-app items, as well as by using featured free apps and games. The program, originally introduced in the US in 2018 and now benefiting over 220 million users globally, also boosts developer earnings with potential revenue increases of up to 30%.
Kavak, a Mexican startup, has tokenized R$ 30 million to finance used cars in Brazil. This initiative marks a significant move in leveraging blockchain technology to streamline automotive financing. By converting this amount into digital tokens, Kavak aims to provide a more efficient and secure way for consumers to purchase pre-owned vehicles.
Clara appoints Gabriel Coelho as new Director of Startups and Innovation for Brazil. Coelho, founder of Empodere-se in education, brings over 25 years of experience, including roles at Chiefs.Group and Go.K. At Clara, he aims to elevate the company as a leader in corporate payments, leveraging its B2B solutions for credit card issuance, bill payments, and real-time expense management software across Brazil, Colombia, and Mexico.
OpenUAI, known as the "Pão de Queijo Mafia" due to their bakery chain success, is now venturing into AI startup investments. Based in Brazil, they are set to allocate substantial funds to support emerging companies at the forefront of artificial intelligence innovation. This strategic move aims to accelerate technological advancements across various industries, reinforcing Brazil's position in the global AI landscape.
Peter Thiel, PayPal co-founder, regrets not buying more Bitcoin (BTC), unsure if its value will rise further in the coming months. Despite investing $200 million in cryptocurrencies through Founders Fund earlier this year, with half in BTC below $30,000, Thiel remains cautious. Having previously invested in 2014 and exited post-2022 crypto crisis, he now views Bitcoin's future less optimistically, seeing traditional finance limiting its revolutionary potential.
Deals:
Axelera AI has raised $68M in Series B funding to rival Nvidia with its AI processing units (AIPUs) for edge computing. The funds will help Axelera expand its Metis platform, which balances performance, efficiency, and ease of use, to new markets. The round was led by Invest-NL Deep Tech Fund, European Innovation Council Fund, and Samsung Catalyst Fund.
General news:
The Brazilian National Data Protection Authority (ANPD) has banned Meta, the parent company of Facebook and Instagram, from using Brazilian users' data to train its AI. This decision cites violations of Brazil's General Data Protection Law (LGPD), noting a lack of transparency and risks of harm. The ban includes data from minors, and violations could result in daily fines of R$50,000. Meta's recent privacy policy changes, which enabled data use for AI training without clear user consent, prompted this ruling.
Brazil is emerging as a hotspot for cross-border tech M&As. Foreign investors see opportunities in sectors like technology, media, and telecom. In 2023, 20% of 1,200+ deals involved foreign capital, with the U.S. leading investments. Challenges include high taxes, legal uncertainties, and cultural differences. Founders must navigate complex processes and ensure alignment with stakeholders to succeed. Despite these hurdles, Brazil’s growing startup ecosystem attracts significant international interest, promising transformative growth.
Fintech Cora has received approval from Brazil's Central Bank to operate as a financial institution, moving from a Direct Credit Society (SCD) to a Credit, Financing, and Investment Society (SCFI). This change allows Cora to offer new credit and investment products, expanding beyond its existing business account and credit card services. The new license enables Cora to raise funds through public instruments like RDBs and LCs, and offer products like remunerated balances similar to CDBs. Cora aims to achieve sustainable growth and profitability, targeting a 50% revenue increase in 2024.
Stockash, a fintech specializing in credit solutions for executives with stock option plans (ESOP), has structured an R$18 billion financing deal for Equatorial Energia employees. This is the first time such a product has been offered off-the-shelf in Brazil, according to founder and CEO Luiz Gidrão.
São Paulo's Butantã district is set to become a major innovation hub, integrating the University of São Paulo (USP), the Institute of Technological Research (IPT), and the Energy and Nuclear Research Institute (IPEN). This initiative aims to foster collaboration between academia, industry, and government, driving technological advancement and economic growth. The project will focus on areas like health, energy, and advanced materials, promoting research, development, and entrepreneurship.
Canastra Ventures has launched a R$ 20 million fund to invest in 40 early-stage AI startups in Brazil. Founded by Pedro Dias, Artur Dias, and Larissa Bomfim, the firm aims to transform AI innovation and foster sustainable growth. They plan to invest R$ 500,000 for a 7% stake in startups across various sectors, including health, retail, and B2B software. Canastra Ventures will also offer residency and acceleration programs, and collaborate with universities and innovation hubs like Cubo and Instituto Caldeira.
Urbano Bank FDIC Creditory Investment Fund net worth has reach R$ 50 mm and forecast R$ 130 mm until the end of the year.
Submarino, once a leading Brazilian e-commerce platform, is shutting down after 25 years and will merge into Americanas. This move aims to streamline operations and enhance efficiency following financial difficulties, including a massive accounting scandal at Americanas.
Banco BV has redefined itself to lead Brazil's financial innovation scene. Since 2017, it has invested in startups, embraced new technologies, and transformed its internal culture. Key initiatives include BVx, a dedicated innovation ecosystem, and the Open Innovation Program. The bank has reduced contract times with startups significantly and invested in numerous fintechs, reshaping its revenue sources.
Deals:
Tivita, a fintech specializing in financial management solutions for medical clinics, raised R$32 million in a seed round led by FinTech Collective. Investors include K50 Ventures, MAYA Capital, and SSV. With the new funds, Tivita plans to expand its technology and grow 20x in two years. Their platform automates financial tasks, enhancing operational efficiency for clinics and healthcare providers. Founded by Claudio Franco and Amilton Paglia, Tivita has processed over R$5 million in payments since January 2024.
General news:
WeWork's financial troubles have shaken São Paulo's REIT market. Major funds like Vinci Offices (VINO11), Rio Bravo Renda Corporativa (RCRB11), and Santander Renda de Aluguéis (SARE11) reported missed rental payments for June. This has raised concerns about dividend impacts for investors. Efforts are underway to mitigate risks and recover owed amounts. Despite the global crisis and restructuring efforts, WeWork's Brazilian unit continues to operate independently.
Cumbuca, a fintech focused on shared expenses, received approval to operate as a Payment Transaction Initiator (ITP) via Pix in Brazil's Open Finance. Founded by Daniel Ruhman in 2021, Cumbuca offers a joint account app and a shared Mastercard. In June, Pix payment initiation moved nearly R$ 200 million. With Cumbuca, there are now 32 institutions authorized as ITPs, including major banks and tech firms.
PicPay has appointed Rodrigo Penteado, former Itaú executive, as its new Director of Financial Services for individuals. Penteado will lead initiatives to enhance PicPay's financial offerings, leveraging his extensive experience at Itaú to drive innovation and growth.
Visa has appointed Vanessa Fernandes as its new Vice President of Business Development. With a strong background in the financial industry, Fernandes will lead strategic initiatives to drive growth and innovation at Visa.
U.S. venture capital funding hit its highest level in two years, driven by a surge in AI deals. Investments in AI startups have significantly boosted overall funding, showcasing the technology's growing impact and potential. This trend highlights the increasing confidence in AI's transformative capabilities across various industries.
Santander has formed a joint venture with Pluxee, formerly Sodexo, to enhance its offerings in the benefits and rewards sector. This strategic partnership aims to leverage both companies' strengths, with Santander contributing its financial expertise and Pluxee providing its benefits and rewards solutions.
General news:
The Rio de Janeiro Stock Exchange is set to reopen in the second half of 2025, announced by Mayor Eduardo Paes and ATG CEO Claudio Pracownik. The initiative aims to boost the city's financial sector, currently contributing R$1.5 billion in taxes. New legislation reduces ISS tax to 2%, incentivizing the exchange's operation. Expected to attract significant investment, this project marks a significant step in revitalizing Rio's economy and establishing it as a key financial hub in Brazil.
A SoftBank Group unit has reportedly engaged in discussions with banks regarding funding for a significant energy project. This initiative underscores SoftBank's commitment to expanding its presence in the renewable energy sector, aligning with global sustainability goals. The project aims to bolster renewable energy infrastructure, potentially influencing broader energy markets. These discussions highlight SoftBank's strategic efforts to drive innovation and sustainability in the energy industry.
Invisto has launched "single-company funds" focusing on growth-stage investments. This initiative began with their investment in Asaas, a fintech from Joinville, during its Series C round. Through Invisto Select, they plan to invest up to R$ 80 million annually in similar opportunities, targeting startups with SaaS and B2B models. They aim for investments ranging from R$ 5 million to R$ 20 million, prioritizing companies with strong growth potential and robust corporate governance.
Asaas, a fintech focused on digital accounts for SMEs, has reached R$1.25 billion in receivables prepayment, halfway to its R$2.5 billion target for 2023. This milestone follows a R$50 million FIDC operation last year. Receivables from credit cards make up 75% of the total volume, with the rest from invoices. The company aims to enhance cash flow and financial management for its clients through integration with other banks, leveraging Open Finance and CERC technologies.
Chilean tech company Drivin aims for $10M in global revenue in 2024, with a strong focus on Brazil. Since entering the Brazilian market four years ago, Drivin has seen a 40% growth rate, reaching $500K in revenue in 2023 and projecting $1M for 2024. Brazil now accounts for 10% of Drivin’s global revenue.
The Brazilian Central Bank will introduce contactless PIX payments in February 2025, improving online shopping convenience and security. Key dates include:
- July 31, 2024: Release of non-redirect payment rules.
- November 14, 2024: Start of production testing.
- February 28, 2025: Official public launch.
New rules will streamline payment initiation and expand Open Finance participation, aiming for 95% user coverage. This initiative enhances user experience and security in Brazil's payment systems.
Deals:
Unimed Brasil has acquired a stake in DPOnet to enhance data protection and compliance with Brazil's LGPD. This partnership grants Unimed's 340 cooperatives access to DPOnet's privacy and governance services, including digital training and risk analysis. This move aligns with Unimed's strategic goals to improve data security and service quality in the healthcare sector.
General news:
Latin American startups raised $2.18 billion in venture capital in H1 2024, marking the highest funding volume since H2 2022, according to Distrito. This represents a 40.7% increase from H1 2023's $1.55 billion. Despite fewer rounds (377 vs. 414 in H1 2023), the average ticket size rose from $3.74 million to $5.78 million. Late-stage funding played a key role, especially in fintechs. Brazilian startups received $928.3 million, up 14.8% from H1 2023, but down 25.6% from H2 2022, capturing 42.6% of Latin America's total funding.
A life-saving insurance policy that helped cure their mother's rare disease inspired Chilean brothers Della Maggiora to create Betterfly. Their startup revolutionizes access to insurance, aiming to make it more affordable and accessible to all. With rapid growth and significant investment, Betterfly has achieved unicorn status. Betterfly's platform combines insurance with wellness incentives, offering users coverage that grows as they engage in healthy activities. This approach not only encourages healthier lifestyles but also provides financial security, creating a positive impact on both physical and financial well-being.
Deals:
Proptech startup Pipeimob, co-founded by Roberto Nascimento, a serial entrepreneur and former CEO of Zap Imóveis, has secured R$ 2.5 million in a pre-seed funding round led by DOMO.VC. The funds will accelerate the development of its real estate process management platform and expand operations. Pipeimob aims to revolutionize the real estate sector with innovative technologies, enhancing efficiency and transparency.
LAVCA Tech Brasil 2024
Date: August 21
Location: Google HQ na Faria Lima
Description: LAVCA Tech Brasil is an annual meeting of LAVCA's network of Brazil-focused VCs and tech investors in São Paulo. This year's meeting will include keynote fireside chats, breakout sessions and networking opportunities designed to build meaningful relationships amongst investors active in the region.
Brazil Tech Summit:
Date: August 9
Location: São Paulo
Description: This international summit features 100 global speakers and focuses on catalyzing entrepreneurial and business ecosystems in emerging markets. It includes panels on trends and opportunities in Brazil, industries of disruption, and the role of technologies like AI and blockchain.
Digitalks Expo:
Date: August 23-24
Location: São Paulo
Description: A major event that brings together professionals from various tech sectors to discuss digital transformation, innovation, and technology trends.
Colombia Tech Week:
Dates: August 26 - September 3
Location: Bogotá and CaliOverview: Colombia Tech Week 2024 is set to be a major event in the Latin American tech scene, bringing together startups, venture capitalists (VCs), accelerators, corporates, and international tech communities. The event aims to position Colombia as a hub for investment and innovation, with a focus on fostering connections and creating business opportunities across the region.
Sao Paulo Tech Week
Dates: Sept 16-22
Location: São Paulo
Description: Several events focused in LatAm Tech taking place in the city.
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: 8-11 de Outubro
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.
#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.
Other events:
Product to the Rescue (donations directed to the South of Brazil) LET’S HELP!
MMA INNOVATE BRASIL 2024, Fintech View, Score Summit, Roga DX
PS: If you want to be featured here, please send me an e-mail with your event following the format above: title, date, location, description, link for more info.
CB Inisghts State of Venture
Carta’s First Cut
BG2Pod with Bill Gurley & Brad Gerstner
Soooo good. Next week I'll send you a summary :)
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