LatAm Tech Weekly
#155 - Powered by Nasdaq: Global & LatAm Venture volume for August, deals of the week, and much more!
Happy Sunday!
It’s wild that we’re already in September — this year has flown by for me. Venture numbers are in, and we might finally see the Fed give us that long-awaited interest rate cut. The next few months should be, to say the least, exciting. In Latin America, activity has bounced back, with Sling Hub reporting 51 equity rounds and $259M invested—a 49% jump from last month. Shoutout to Stori, the Mexican startup that raised $105M from Notable Capital and BAI Capital. Buckle up—2024’s got just four months left!
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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.
Despite the positive momentum in LatAm, Crunchbase reported a slow August for global VC funding. It was the weakest month of 2023, with a 23% year-over-year drop and a 36% decline from July’s $28.4B.
Across all stages, 24% of startup funding ($4.3B) flowed into AI in August, being the leading sector for the month globally. The second-largest sector, healthcare and biotech companies raised $3.5 billion.
Shifting to the investor side, Pitchbook released its Global League Tables for Q2 2024. Antler topped the charts as the most active VC firm globally, with 99 deals. Heavyweights like Andreessen Horowitz and Sequoia landed in 10th and 11th, with 47 and 44 deals, respectively.
Another interesting read by Pitchbook was an analysis of how founder-led startups grow faster in value than non-founder led ones.
Paul Graham, co-founder of Y Combinator, emphasizes that startups led by founders have a significant competitive edge over those managed by professional CEOs. According to PitchBook data, founder-led companies often experience faster valuation growth, as founders tend to take bigger risks and have a deeper commitment to their companies. However, survivorship bias is a factor, as successful founder-led companies are more visible, leading to ongoing debate about whether founders should stay at the helm as their companies scale.
General news:
Google is strengthening its presence in Latin America with a significant investment of over $850M in a new data center in Canelones, Uruguay. This marks the company's second data center in the region, following its 2015 facility in Chile.
Crownstone Ventures, a venture builder with Swiss and American capital, is aggressively entering Brazil's sports betting market by acquiring smaller, unlicensed companies unable to meet new regulatory demands. With R$ 50 million already invested and plans to allocate another R$ 300 million by 2025, Crownstone aims to consolidate these companies under new brands like Elisa.Bet.
Americanas has decided to shut down its fintech Ame Digital and is seeking to sell its assets, including its payment institution license.
Redeban, a leader in payment processing in Colombia, has partnered with Capgemini to enhance access to Open Finance benefits. This strategic collaboration aims to boost financial inclusion by enabling consumers to manage their financial information more easily.
Hypr, a startup leveraging geolocation data for targeted marketing, has brought on Mateus Lambranho, formerly of SPX Capital, as a new partner and Director of Operations. Lambranho, the son of GP Investimentos co-founder Fersen Lambranho, aims to scale operations and formalize financial and commercial processes. Founded in 2020, Hypr has generated R$ 110M in revenue, half of which came this year. With 290 clients, including PepsiCo, Unilever, and Heineken, the company is preparing for potential future funding rounds under Lambranho's strategic leadership.
Mercado Diferente has appointed Luiza Zaidan as its new Head of Chef. Zaidan, known for her expertise in blending gastronomy and innovation, will enhance the foodtech’s personalized recipes and weekly basket offerings. Her role includes developing new recipes, optimizing ingredient use, and improving the company’s AI-driven PitaIA and Tedi virtual assistant.
BoBags, a luxury fashion circular platform founded by Bel Braga, has raised its fourth fund to invest in high-end accessories like Chanel, Gucci, Hermès, and Prada. The latest fund, totaling R$ 575,000, is part of a broader R$ 2 million investment in this model. BoBags operates through a Sociedade em Conta de Participação (SCP), allowing individuals and investors to profit from luxury item rentals. The company, which started in 2009, has seen significant growth and aims to open a new fund later this year.
Vivo has received authorization from Brazil's Central Bank to operate as a Direct Credit Society (SCD) under its Vivo Pay financial platform. With a capital of R$ 4.7M, this fintech can now issue electronic currency and manage prepaid payment accounts.
Chilean fintech UPAGO has established itself as a leader in online collections and billing in Mexico, building on its five years of experience across Latin America. After two years in Mexico, UPAGO has enhanced collection efficiency by up to 30% for companies. With a comprehensive suite of services and integrations with local payment gateways, the startup aims for significant growth, targeting a 5-10% market share by 2025.
Venture capital investments in SaaS startups surged 70% in Q2, reaching $21.9B, driven by AI innovations, according to PitchBook. Despite a 2% drop in deal volume, the average round size increased, highlighting the sector's growing value.
The Brazilian government plans to propose a tax on big tech companies starting in 2025, with an expected annual revenue of R$5 billion. The proposal, which will be separate from the 2025 budget, aligns with OECD recommendations for a 15% minimum tax on multinationals.
The regulation of AI in Brazil is a hot topic as the Senate’s temporary AI committee repeatedly delays the vote on Bill 2338/2023, aimed at establishing a comprehensive AI framework. Inspired by European legislation, the bill proposes a risk-based approach to regulation, emphasizing transparency, ethics, and data protection.
Deals:
Vetwork, a platform providing management and financial services to veterinary clinics and pet shops, has secured R$ 20M in credit funding from SRM Ventures. With this investment, Vetwork aims to triple its client base from 1,000 to 3,000 by 2025.
Voke, a hardware rental company backed by Spectra, has acquired CSI Locações for R$ 17.9 million, marking its sixth acquisition. This move aims to strengthen Voke's presence in the North and Northeast regions of Brazil. Co-CEO Renê Almeida highlights that CSI's loyal customer base will help expand Voke's geographical footprint.
VTEX has acquired Weni, a customer service AI solutions provider, in a strategic move to enhance its post-sale services. The acquisition, valued under $5 million, aims to bolster VTEX’s capabilities in post-sale support, complementing its strong performance in engagement and conversion. VTEX plans to offer Weni's solutions to its 2,600 e-commerce clients, with an expected 20-30% adoption rate over the next three years. Weni will also expand to the U.S., targeting supermarket chains.
General news:
The suspension of X (formerly Twitter) in Brazil is having little impact on local businesses, according to industry sources. Despite the controversy surrounding the decision by the Supreme Court and Elon Musk's reactions, executives report minimal disruption to marketing or brand strategies. X had already lost its relevance for many brands, and the platform's monetization struggles predated the ban.
Florianópolis is set to be recognized as Brazil's National Capital of Startups. The title, approved by the Senate's Education and Culture Commission in August, now awaits presidential approval.
Stori, the Mexican fintech unicorn known for revolutionizing consumer credit, is expanding into Colombia. This move follows its success in Mexico, where it serves over 3 million clients. Stori's entry into the Colombian market is marked by the launch of its S Card, offering credit lines from 200,000 COP regardless of credit history. The startup, having recently raised $212 million, plans to invest $100 million in Colombia over the next three years.
Fintech companies Bamboo Payment and Ontop have announced a strategic partnership aimed at revolutionizing payment solutions in Latin America. This collaboration accelerates payment processing times and improves fund accessibility for workers, significantly reducing transaction delays and costs.
WeWork is facing increasing challenges in Brazil, with the company accumulating eviction actions and losing office spaces across the country. Amid ongoing financial difficulties, the coworking giant has had to surrender several locations due to unpaid rent. This marks a significant setback for WeWork in one of its key Latin American markets, as it struggles to maintain its presence and financial stability.
A recent study by Cielo, reveals how innovation is reshaping Brazilian retail, with Pix now matching credit cards in face-to-face payments, and surpassing them in online transactions. The rise of platforms like WhatsApp for sales underscores the importance of direct customer connections. While AI adoption remains low at 18%, there’s a growing awareness among entrepreneurs of its potential to enhance personalized shopping experiences.
CredAluga, a platform offering financial solutions for real estate agencies, has formed a strategic partnership with CUPOLA, a real estate intelligence consultancy.
Brazilian healthfintech Arvo secured a R$25 million funding round led by Canary and K50, with participation from Latitud, Preface, and Endeavor Scale-Up Ventures. The funds will enhance Arvo’s AI-driven platform, aiming to cover all stages of healthcare transactions, from pre-authorization to final payment.
Deals:
Brazilian fintech Neon has raised over R$ 500 million in its latest Series E funding round, marking its first capital raise in over two years. The round, totaling R$ 518 million, was completed in two tranches, with R$ 310 million secured in December 2023 and R$ 208 million in August 2024. The funds were contributed by existing investors, continuing Neon’s growth trajectory since its pre-seed days.
General news:
Brazil's Central Bank is set to launch "Pix by proximity" in early 2025, enhancing payment speed and efficiency. Building on the success of Pix, which processed 42 billion transactions in 2023, this feature will allow users to make contactless payments through digital wallets using NFC technology, without needing to scan QR codes or log into banking apps.
MercadoLibre announces a $75 million investment in a new fulfillment center in Argentina. This facility aims to enhance logistics and delivery efficiency, supporting the company's expansion and improving service for its growing customer base.
The Central Bank of Brazil has revealed 13 selected use cases for the next phase of Drex's pilot program, focusing on innovations like receivables assignment, collateralized credit, and transactions involving real estate and vehicles. The projects, chosen from 42 proposals, will be tested by 16 consortia. This phase aims to explore the integration of financial services using smart contracts and will run through mid-2025.
Broota, Chile’s leading crowdfunding platform for startups, has launched three new financing programs: Broota Ignite, Broota Early Growth, and Broota Scale. These initiatives aim to support startups at various stages, from early ideas to those preparing for international expansion.
Conta Simples, a corporate expense management platform, has launched a Buy Now, Pay Later (BNPL) solution for B2B transactions. This new product offers flexibility for companies to make payments via Pix, boleto, or TED with up to 30 days or in installments.
DM, backed by Vinci Partners, has outlined an ambitious plan to become the go-to financial institution for Brazil's low-income population, positioning itself as an alternative to Caixa. Following the acquisition of Credz, DM now leads the independent private-label credit card market, with a portfolio exceeding R$4.1 billion and annual revenue of R$3.2 billion.
AWS launches its first GenAI Loft in São Paulo to boost startup innovation. Running from September 4 to November 20, the GenAI Loft provides a collaborative space for exploring generative AI technologies.
Goodmeal, a Chilean startup, has partnered with NotCo to tackle food waste. The collaboration uses NotCo's AI technology to improve Goodmeal's strategies for reducing surplus and optimizing supply chains, aiming to enhance sustainability and efficiency in the food industry.
Start-Up Chile kicks off its BIG 8 acceleration program with 50 tech startups from Chile and abroad, including Argentina, Peru, Brazil, Colombia, Mexico, Spain, and India.
Chilean real estate crowdfunding platform Fraccional has closed its second House Flipping project in record time. The project, based in Providencia, Santiago, raised around $246K from 151 investors.
Deals:
Brazilian healthfintech Arvo secured a R$25 million funding round led by Canary and K50, with participation from Latitud, Preface, and Endeavor Scale-Up Ventures. The funds will enhance Arvo’s AI-driven platform, aiming to cover all stages of healthcare transactions, from pre-authorization to final payment.
Brazilian proptech Plaza has raised R$5.5 million in a pre-seed round led by Magma Partners, with participation from Urca Angels, Latitud, and notable industry figures. Plaza plans to use the funds to develop its AI-powered virtual assistant, designed to streamline real estate processes by automating documentation and improving transaction efficiency.
PsycoAl, a healthtech using AI to automate healthcare processes, secured a R$2.5M pre-seed round led by Dr. Consulta. Key investors include Ricardo Bottas (ex-CEO of Amil) and Paulo Chapchap (ex-president of Hospital Sírio-Libanês). PsycoAl aims to enhance patient engagement and streamline tasks for healthcare providers.
Gringo, a Brazilian startup that simplifies life for drivers, secured R$ 70 million in a new funding round led by Moore Capital. This brings its total funding to nearly half a billion reais over five years. The investment will fuel the expansion of its credit products, protection services, and vehicle solutions.
General news:
Brazil's Open Finance system is nearing 50 million connected accounts, with 49.2 million active consents as of early August. This milestone, reached in just over three years, outpaces other global implementations. Recent advancements, including smart transfers and no-redirect payment journeys, are driving growth.
L4 Venture Builder, backed by B3 (Brazilian stock exchange), has invested 45% of its R$ 600M capital in just 18 months. Operating as an independent fund, L4 seeks startups adjacent to B3's business but isn't limited to strategic synergies. With investments across Brazil, Israel, the UK, and Sweden, L4 plans 2-4 more deals this year, focusing on Series A/B. The fund's flexibility also allows for earlier and later-stage investments, targeting scalable businesses in diverse sectors such as cybersecurity and AI.
Mercado Pago has surpassed Stone and PagBank in profits, according to Itaú BBA. In H1 2024, Mercado Pago reported a net income of R$1.8 billion in Brazil, outpacing Stone's R$881 million and PagBank's R$852 million.
SpaceX has withdrawn foreign employees from Brazil and advised others to avoid the country following a court order freezing Starlink's accounts, part of an investigation into Elon Musk's companies. The move raises safety concerns, with Starlink appealing the decision and planning to suspend X (formerly Twitter) in Brazil.
Zenvia, a Nasdaq-listed consumer experience tech firm, saw its EBITDA surge 126% to R$33.7M in Q2 2024, signaling robust financial progress. With revenue up 20% year-over-year to R$231.2M for the quarter and R$443.8M for the semester, the company is focused on boosting cash flow and achieving profitability.
Brazil’s Securities and Exchange Commission (CVM) has expanded its equity crowdfunding regulations through Resolution 88/2022, raising funding limits from R$5M to R$15M and easing restrictions on startups seeking capital.
After a brief pause, EB Capital’s Loja do Mecânico is set to resume its expansion of physical stores in 2025. Following a period of strategic adjustments and leadership changes, the company plans to open 10-15 new stores annually, focusing initially on areas near its distribution center and major cities. The revamped strategy includes new insurance products, a loyalty program, and enhanced store formats. The company aims to double its size and achieve nearly R$ 4 billion in revenue by 2028.
Brazil's e-commerce sector reached $196.1 billion in 2023, growing 4% from the previous year, according to the National E-Commerce Observatory. São Paulo, Espírito Santo, and Minas Gerais accounted for 60% of transactions, with the Southeast region leading at 73.5% of sales.
Deals:
Verizon's $10.5B acquisition of Frontier signals a major shift in Brazil's fiber optic market. This move highlights growing interest from global telecoms in Brazil's telecom infrastructure, following recent trends of consolidation and expansion. The deal positions Verizon to leverage Frontier's extensive fiber network, potentially setting new standards for connectivity and competition in the region. This acquisition underscores the increasing value and strategic importance of fiber assets in emerging markets.
Vale Ventures, with a $100 million budget, has made its third investment, contributing to a $30 million Series A round for U.S. startup Mantel. Founded in 2022 at MIT, Mantel specializes in low-cost carbon capture using molten borate technology. The investment, led by Shell Ventures and Eni Next, supports Mantel’s development of a facility capable of capturing 1,800 tons of CO2 annually.
Fuse Capital has invested in Mexican startup Etherfuse as part of a $3M seed round led by White Star Capital and North Island Ventures. Etherfuse tokenizes emerging market bonds, providing 1:1 backing with real assets and enabling users with just a mobile device and crypto wallet to access these bonds. With plans to offer over 3,500 tokenized assets, including short-term government debt, the startup is now targeting Brazil. Fuse Capital aims to support Etherfuse's entry into the Brazilian market, leveraging its expertise in blockchain and traditional finance.
Rappi has acquired the assets of Indian AI-based supply chain company Fountain9, aiming to enhance its technological capabilities. The deal, which includes Fountain9’s intellectual property and team, will improve Rappi's supply chain efficiency by leveraging AI to predict demand, optimize pricing, and reduce waste.
Unico IDtech is expanding internationally with two new acquisitions: Oz Forensics, from the UAE, and Trully, from Mexico. CEO Sérgio Chaia highlighted these moves as part of the company's global growth strategy initiated in early 2024.
General news:
Argentinian startup /q99, recognized by Quantum World Congress as a top innovator in quantum computing and AI, is set to bring the first quantum computer to Latin America. This breakthrough positions Argentina as a key player in the next tech revolution.
Mexican company Kavak is enhancing its used car sales operations with AI to streamline processes such as vehicle inspections, repair costs, and financing options tailored to each market. Kavak’s AI-driven approach includes computer vision for 360-degree car inspections, making evaluations more objective.
Chilean startup IC Innovations has been selected by Plug and Play, a leading Silicon Valley accelerator, making it the first Chilean company to join their program.
Arrow Mobility, a Brazilian electric van startup, is expanding production with a new factory in Caxias do Sul. Backed by Mercado Livre, which has bought nearly all its output, Arrow is now testing its vans with other e-commerce giants.
Delivery Much has partnered with OSuper to digitalize supermarkets in smaller cities across Brazil. Starting with Supermercado Willner in Santa Catarina, the initiative aims to register 100 supermarkets by 2025.
The Central Bank of Brazil has approved Shopee's acquisition of credit fintech Blu. This move marks Shopee's entry into the Brazilian financial sector, enhancing its e-commerce ecosystem with financial services. The deal is expected to integrate Blu's credit solutions into Shopee's platform, expanding financial options for users and potentially driving growth in both sectors.
Deals:
Topaz, part of the Stefanini Group, has made its fifth acquisition in three years, buying 60% of Info Solutions to expand its fintech offerings. With a presence in 25 countries, Topaz aims to bring Info Solutions' wealth management software to international markets. The company is also targeting a U.S. acquisition worth over $100M to boost growth.
AltScore, a Lending as a Service startup, raised $8.5M in a Series A round led by Haymaker Ventures, with support from Kamay Ventures and others. The Ecuadorian company, based in Mexico, aims to empower small and medium-sized businesses (SMEs) across LatAm by enabling B2B companies to become fintech lenders in just weeks. Notably, Coca-Cola uses AltScore’s infrastructure to provide digital loans to underserved SMEs.
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. 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, I encourage you to access my LinkedIn post that has the entire list!!!!
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.
“Pressure is a privilege” Billie Jean King
Very glad to having arrived at this newsletter. Super relevant overall. By the way would love to read a deep-dive of you about NuBank and their forthcoming strategy all over Latam, would be awesome