LatAm Tech Weekly
#154 - Powered by Nasdaq: Dynasties in the making, Unlocking Gen AI in LatAm, deals of the week... and much more!
Happy Sunday!
This week was filled with great reads and insightful sector overviews. I also caught some interesting documentaries on Netflix, which I’ll dive into a bit. You see, I’m training for a marathon, so I’ve been working on increasing my running volume throughout the week. Given that, and the chilly weather in São Paulo recently, I found myself gravitating toward the treadmill. Now, I used to think long runs on the treadmill were unbearable, but I found a way to make the time pass more easily: Netflix documentaries (podcasts just weren’t cutting it).
With the crazy mileage I logged this week, I managed to watch two: Dancing with the Devil and What Jennifer Did. Both have a bit of a dark side, but I really enjoyed them. They got me thinking about a few themes worth noting: a) the power of the internet/social media and how it captivates people, b) how easily some people can be influenced, and c) how the same narratives play out repeatedly in society, with only the characters changing. If you’re into documentaries, I highly recommend both!
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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.
Starting out with a great read by Gilgamesh Ventures, "Dynasties in the Making: 15 Companies Cultivating Tomorrow’s Fintech Leaders," which delves into the concept of "Fintech Families," or companies that have become breeding grounds for future fintech entrepreneurs. Similar to how the ‘PayPal Mafia’ has influenced the tech world, this report identifies fifteen influential fintech companies in the U.S. and Latin America that have spawned nearly 2,600 founders, with 12% founding fintech startups.
The research highlights that despite a slowdown in fintech investments, a new wave of startups is emerging, driven by alumni from these "Fintech Families." Notably, 27% of these founders launched their companies in 2023, a year marked by economic challenges, indicating resilience and an opportunity-driven mindset among these entrepreneurs.
A significant finding is the dominance of product and engineering leaders in founding new companies, with 50% of the observed founders coming from these backgrounds. Interestingly, the report notes that fintech founders often venture beyond the fintech industry, with some companies like Brex and Affirm having a stronger inclination to produce fintech-specific entrepreneurs.
Latin American fintech companies, particularly those from Brazil, also play a crucial role. However, the report finds that non-Brazilian companies like Mercado Libre and Rappi have produced more founders compared to their Brazilian counterparts, suggesting a broader regional influence.
Looking forward, the report anticipates that the impact of these "Fintech Families" will become even more pronounced over the next decade, as more startups founded by their alumni reach maturity. The analysis underscores the importance of strong branding and talent attraction in building such dynasties, and it predicts that the next wave of fintech leadership will likely come from today’s emerging industry giants.
If you’re an avid reader, you might remember that I attended the Latin American Forum 2024 earlier this year, hosted by Riverwood Capital. Recently, they shared a research paper from BCG titled "Unlocking the Gen AI Opportunity in Latin America," based on insights gathered during the event.
The study surveyed 170 participants, revealing that 95% believe Gen AI will have a significant or transformative impact on their organizations. However, only 20% feel they have a well-defined vision and strategy in place. Key use cases identified include product enhancement (42%), new product development (29%), and code generation assistance (26%). The research also highlighted some impressive benefits from Gen AI, such as a tenfold reduction in customer inquiry costs, a 25% decrease in marketing content creation time, and a 30% increase in content production efficiency—all leading to better customer satisfaction and quicker issue resolution.
Traditional companies are taking a strategic approach to Gen AI, focusing on clear ambitions and prioritizing scalable use cases based on impact and feasibility. However, establishing specialized teams with defined roles and governance remains a challenge, with only 28% of these companies successfully implementing such teams. On the other hand, Latin American tech companies are moving quickly with Gen AI, applying it across various functions and use cases, both for quick wins and to reshape core business areas.
LatAm tech companies face three main challenges with Gen AI: Talent, Responsible AI, and Data Mastery & Tech Readiness.
1. Talent Recruiting skilled personnel, training existing employees, and preparing leadership are significant hurdles. To address AI talent shortages, companies should partner with specialized recruitment firms and develop tailored AI training programs that incorporate external expertise. Additionally, adopting a new educational approach is crucial for upskilling current employees.
2. Responsible AI Ensuring data privacy, transparency, and compliance with policies and regulations is critical. Companies need a holistic approach to stay agile in responding to current and future regulations, build stakeholder trust, and achieve overall benefits.
3. Data Mastery & Tech Readiness Mastering data and ensuring technological readiness involves tech integration, data governance, and model training. Investing in advanced data capabilities, dedicating resources to data design, and establishing robust data governance frameworks are necessary steps for companies to excel in this area.
The research also highlights practical AI use cases from LatAm tech companies like DLocal, Rappi, and Sensedia. One standout example is DLocal's implementation of a GenAI Copilot for Cloud Engineers. This tool detects errors and automatically suggests fixes, reducing the Cloud Platform team's human support by 90%. As a result, the team can focus on platform development while engineering teams receive immediate assistance, accelerating delivery speed and enhancing overall satisfaction. Future plans include enabling the Copilot to directly fix code issues, further speeding up error resolution.
If you're interested in how LatAm tech companies are leveraging Gen AI to overcome challenges and drive innovation, these examples are definitely worth exploring!
General news:
Venture capital investment in crypto is showing signs of recovery. PitchBook's Crypto Report reveals that 503 deals were closed with crypto startups in Q2, a 12.5% decline from the previous quarter but a 4.6% increase year-over-year. The total deal value reached $2.7 billion, up 2.5% from Q1 but down 9.8% from 2023. Notably, early-stage valuations rose sharply, indicating growing competition, while late-stage valuations dropped. This suggests a shift in investor focus towards earlier-stage opportunities.
MercadoLibre has filed a complaint against Argentina's leading banks, accusing them of cartelization for allegedly colluding to limit competition in the financial services market. The company claims that these banks are restricting access to credit and financial products, undermining the growth of digital platforms like MercadoLibre's fintech arm, Mercado Pago.
Peruvian fintech Hapi has reached half a million customers, marking a significant milestone in its growth. The company celebrated this achievement with a series of initiatives, showcasing its expanding impact in the financial technology sector and its commitment to driving financial inclusion in Latin America.
HRtech Sólides has appointed Wladmir Brandão as its new Chief Artificial Intelligence Officer (CAIO), marking a strategic move to enhance its AI-driven innovation.
RapiCredit has partnered with Alianza In to tackle digital credit fraud in Colombia. This collaboration aims to enhance security measures and protect consumers by leveraging Alianza In’s expertise in financial crime prevention. RapiCredit, a leading fintech in the country, continues to strengthen its commitment to providing safe and reliable credit solutions amid rising fraud concerns.
A new PIX scam is targeting merchants in Brazil, using fake banking apps to forge payment confirmations. Criminals present realistic-looking proof of payment using these counterfeit apps, leaving stores before the fraud is detected. A recent victim lost nearly R$19,000 to this scheme.
Chilean startup Owo is expanding its collaborative economy model to Mexico, offering flexible income opportunities through product sales.
Two more insurtechs, Qsaúde and Vitta, have received final authorization from Brazil’s SUSEP to operate as fully regulated insurance companies. This approval highlights the growing maturity of the insurtech sector in Brazil, which is increasingly aligning with regulatory standards. Both companies are expected to expand their offerings and contribute to the evolution of digital insurance services in the country.
ComparaOnline has been recognized as the first LatAm insurtech to integrate Generative AI (GenAI) into its operations, according to the Latam Insurtech Journey 2024 report. Operating in Brazil, Chile, and Colombia, the company leverages GenAI to enhance customer interaction, risk mitigation, and product personalization.
General news:
Brazil's upcoming tax reform is raising concerns among banks about potential impacts on their financials. The reform, which aims to simplify the tax system and reduce the overall burden, could affect profitability and operational costs in the banking sector. Key issues include changes in tax rates and new compliance requirements that may impact financial stability and growth.
idwall has become the first Brazilian company to earn the iBeta 2 certification, confirming its status as a global leader in biometric security. The certification, awarded after 1,700 rigorous fraud detection tests, places idwall among just 42 companies worldwide to meet the ISO 30703-3 international standard. This achievement underscores idwall's commitment to combating complex digital threats with 100% homegrown technology, solidifying its competitive edge in both the local and international markets.
BancoEstado and Wayra have selected three startups—SoyMomo, NetLinQ, and Ubki—for their acceleration program aimed at boosting fintech innovation in Chile. These startups will receive support to scale their solutions in areas such as child safety, digital connectivity, and credit data management, aligning with BancoEstado's mission to enhance financial inclusion and digital transformation.
DocuSign is evolving beyond digital signatures, launching the Intelligent Agreement Management (IAM) platform to revolutionize contract lifecycle management. With IAM, DocuSign aims to accelerate document review cycles, extract valuable insights, and reduce risks, transforming contracts into strategic assets. This move aligns with growing global demand, especially in Latin America, where DocuSign is expanding its presence.
In 2023, startups in Espírito Santo secured over R$ 45 million in investments, with a median amount six times higher than those in Santa Catarina, according to EDP's Mapeamento Inovação Capixaba. The state now ranks 13th in Brazil with 134 active startups, showing resilience despite global market challenges.
Google has announced the start of construction for its new Engineering Center at the Instituto de Pesquisas Tecnológicas (IPT) in São Paulo, set to be completed by January 2026. This center, part of a 10-year partnership with the São Paulo government, will focus on cybersecurity, privacy, and accessibility. It will include the Google Safety Engineering Center (GSEC), the first of its kind outside Europe, and the Accessibility Discovery Center.
Deals:
Basemaker, a Brazilian adtech, raised R$1.7M in its second investment round, led by DOMO.VC with participation from Anjos do Brasil and Antler. The startup, founded by William Vilar and Matheus Monteiro, offers a first-party data solution that allows social media creators to "rent" their audiences to brands targeting specific niches.
Bertha Capital invested R$20M in fintechs in 2024, with more to come. The venture capital firm has backed five fintechs this year, including Saks, Zemo Bank, Consignei, CashU, and Moss.
Meu Pescado has acquired Vai Aqua, Brazil's leading aquaculture communication channel, as part of its strategy to digitalize the sector through educational content. This move, finalized in July, aligns with Meu Pescado's goal to revolutionize information dissemination in aquaculture.
Mercately, a LatAm startup, raised $2.6M in a seed round led by Inventus Capital Partners and SVQuad, with support from Techstars and Meta's program. The company provides B2B software to help brands sell directly on WhatsApp, integrating with platforms like Stripe and HubSpot.
General news:
Endeavor has announced 38 companies for its second-semester Scale-Up Program. Notably, two-thirds of these companies have at least one diversity marker, showing a significant increase from the previous cohort. This includes 10 companies led by women founders, 10 with Black founders, and 13 with diverse origins.
Tuna, a payment orchestration platform, is preparing for a Series A round by late 2024 to expand its operations into Latin America and the offline retail market. Founded by ex-Peixe Urbano executives, Tuna aims to capitalize on the vast opportunities in physical retail, which remains a fertile ground for technological innovation.
The Brazilian Federal Police (PF) launched Operation Concierge, targeting a criminal organization and illegal fintechs involved in financial crimes and money laundering. The group allegedly moved R$7.5 billion through unauthorized fintechs T10 Bank and InovePay, using accounts "hosted" by regulated financial institutions.
Conta Simples, a Brazilian corporate expense management platform, has appointed Conrado Tourinho as its new CMO. With a background at Coca-Cola and Gympass, Tourinho will focus on solidifying the company's position as a national leader in corporate expense solutions.
Veloe is entering the freight market, targeting R$ 300 million in annual revenue from this new venture. With a potential market size of R$ 250 billion, the company aims to expand its fleet management services, building on its current strong performance in automatic toll tags and fleet management. In 2023, Veloe generated R$ 5.4 billion in revenue, a 20% increase from 2022.
Deals:
Mombak, a carbon credit startup focused on reforesting the Amazon, secured a R$160M loan from BNDES for projects in Pará.
Pedro Moll, an investor and board member of Rede D'Or, is entering the private payroll loan market by investing R$10 million in TudoNoBolso, a fintech founded by ex-executives from Credit Suisse, Neon, and other major financial institutions.
Sankhya, a leading ERP group from Uberlândia, has made its eighth acquisition, buying HR tech startup Vixting. This strategic move, marking Sankhya's third acquisition this year, strengthens its position in the HR sector with an all-in-one HR suite.
Grupo Elsys, a veteran in Brazil's tech industry, has accelerated its M&A strategy by acquiring a stake in dtLabs, a deep tech startup specializing in AI software development.
AutoAgroMachines, a Brazilian startup specializing in autonomous agricultural machinery, secured an R$8 million investment to develop the Forest.Bot Reforma, a hybrid AI-powered reforestation machine.
General news:
Brazilian corporate venture capital (CVC) funds dominated the Latin American landscape in early 2024, with 10 of the 16 most active CVCs in the region being Brazilian, according to LAVCA. CVCs accounted for 25% of all venture capital deals in the region during the first half of the year. While there was a slight dip in the total value of CVC investments compared to 2023, the commitment from major corporations like Bradesco's 2bCapital and Vivo Ventures remains strong, particularly in seed and early-stage funding.
Creditas has entered a new phase of profitable growth in 2024, achieving a record gross profit of R$209.4M in Q2 while cutting costs by 15%. With a 45% YoY increase in gross profit and the highest quarterly revenue in its history at R$493.5M, the company is now self-financing its expansion. Creditas plans to invest in technology, expand into new geographies like Mexico, and enhance customer experience to drive further growth. The fintech has also revised its annual growth target to 25%, maintaining its profitability focus.
TIVIT is entering the financial services market with a R$25 million investment to launch TIVIT Techfin, an evolution of its 2021 brand TBankS. This new division aims to double its financial vertical revenue by 2024, offering a flexible ecosystem for financial services like payments, credit operations, and receivables.
OpenAI is reportedly in talks to raise a new funding round that could boost its valuation to over $100 billion, according to The Wall Street Journal. Thrive Capital is expected to lead the round with a $1 billion investment, alongside potential contributions from Microsoft and others.
PicPay reported a net profit of R$ 62M for H1 2024, nearly doubling its 2023 earnings, with revenue surging 50% to R$ 2.4B. The fintech's growth is driven by portfolio diversification, including credit services and cross-sell strategies. Active users reached 36M, moving R$ 175B, a 77% YoY increase. PicPay's focus on efficiency and innovation, including AI integration, continues to fuel its expansion as the 7th largest bank by clients in Brazil.
Deals:
Brazilian startup Cellva Ingredients raised R$8.5 million in funding, backed by investors like Proveg, Rumbo Ventures, and AirCapital. The funds will support expanding production infrastructure, hiring specialized professionals, and internationalizing operations. Cellva aims to scale up to 10 tons of sustainable food alternatives monthly by 2026 and plans to enter global markets, including the U.S., with innovations in nutraceuticals, microcarriers, and cultivated fats that reduce environmental impact.
General news:
Brazil has ordered the suspension of Elon Musk's X (formerly Twitter) from using user data for AI training. The National Data Protection Authority (ANPD) demands that the platform halt its data collection practices for AI until it complies with local data protection regulations. This move follows concerns over potential privacy violations and the need for explicit user consent.
dLocal is significantly expanding its presence in Brazil, where it now generates a quarter of its revenue in Latin America. The Uruguayan fintech has grown its local team by over 40% in the past year, reaching 130 employees. With a recent license from the Central Bank of Brazil, dLocal is set to integrate directly with the Pix system and is also preparing for the upcoming Pix Automatic feature. Additionally, dLocal plans to leverage Open Finance to enhance its payment initiation services. The company serves over 600 merchants globally, including major names like Amazon and Google, and is keenly watching the online betting market.
Paraguay has seen over $1.1 billion in crypto mining investments in the past three years, driven by its cheap green energy. However, illegal mining is causing $3 million in monthly energy losses and prompting government crackdowns. With rising costs and regulatory uncertainty, some companies are considering relocating to Brazil.
Tech giants like Google, Microsoft, and Amazon are aggressively recruiting top talent from AI startups to bolster their own AI capabilities. These companies are offering lucrative deals to attract engineers and researchers, intensifying the competition in the AI space. This trend highlights the escalating battle for AI dominance, with big tech leveraging resources to absorb cutting-edge expertise from smaller innovators.
Meta has received authorization from Brazil's ANPD to use user data for training its AI models, including information from public posts. This update to Meta's policies, effective June 16, allows for the use of publicly available and licensed data, while ensuring that personal messages are excluded. Users will be notified via Facebook and Instagram, as well as email, with options to opt out.
Nomad has appointed André Hübner as its new Managing Director of Investments. With over 30 years in finance, including roles at HSBC, Dresdner Kleinwort Wasserstein, and Citibank, Hübner will focus on enhancing Nomad's international investment platform for Brazilians.
Deals:
Mandi Ventures, the Brazilian VC firm, has added Alice Mushrooms, a U.S. brand specializing in chocolate made with functional mushrooms, to its portfolio. The funding round, led by L Catterton and joined by celebrities like Zac Efron and Kevin Hart, marks Mandi's focus on nutrition-as-medicine. Alice Mushrooms, launched in 2022, offers products aimed at enhancing focus, desire, and sleep. This investment aligns with Mandi's strategy of supporting innovative foodtechs, with previous investments in agtechs and startups like Cultivated Biosciences.
Ume, a Brazilian platform specializing in Pix-based credit and payments, has raised $15M in Series A funding led by PayPal Ventures, with contributions from NFX, Globo Ventures, and others. The company also secured a $20M credit rights fund from partners including Verde and Itaú. Ume plans to enhance its Pix-centric services, helping SMEs offer flexible payment options and streamline transactions. Since integrating Pix in early 2023, Ume has quintupled its retail partners, tripled consumer engagement, and reduced delinquency by 33%. The investment will support growth in sales, marketing, and tech.
First of all I would like to thank you all for sending me several interesting tech events that will happen in the upcoming months!! The list is very extensive, and I’ll create soon a notion with all of them (to avoid this section being too long). Here, I’ll share the ones I found more interesting - which is not necessarily true given that it is based on my own opinion! If you like tech events (while the Notion is not ready), I encourage you to access my LinkedIn post that has the entire list!!!!
WSO2 Experience Brazil 2024
Date: September 5
Location: Rosewood (Sao Paulo)
Overview: Discussions on the latest technological innovations, with a focus on Artificial Intelligence and the Platformless approach. Additionally, we will address the challenges and opportunities that Brazilian companies currently face, such as optimizing customer experience and building a resilient digital infrastructure.
Inteligência Artificial no Agronegócio
Date: September, 12
Location: STATE Innovation Center, São Paulo.
Description: Grão Direto, the largest digital grain commerce platform in Latin America, has partnered with Microsoft, ADM, BASF, and PwC to host a super event featuring renowned market speakers, exclusively for selected participants. Pre-register here and seize the opportunity to participate in an immersive technology experience in agriculture. The event is free!Sao Paulo Tech Week
Dates: Sept 16-22
Location: São Paulo
Description: Several events focused in LatAm Tech taking place in the city. Notably, Cubo Conecta will happen on September 18.
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.
There’s no free lunch - Unknown