LatAm Tech Weekly
#126- Powered by Nasdaq: Cybersecurity & AI, deals of the week, and much more!
Happy Sunday!
As many of you know, the Carnaval holiday in Brazil stretches until midday Wednesday. I must admit, I too was caught up in the festivities, traveling and momentarily stepping away from the LatAm Tech scene. However, by Wednesday morning, I was back on track, swiftly catching up with the latest developments. If I happen to overlook any major news, I ask for your patience. Remember, I'm only human too! :)
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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.
A very interesting read this week was Pitchbook’s analyst note on the sectors that led the pack in 2023. Cybersecurity and AI sectors emerged as the top-performing industries among unicorn companies, according to research and analysis presented in the Morningstar PitchBook Global Unicorn Vertical Indexes. This achievement was particularly notable in a year characterized by challenging fundraising conditions, which led many startups to reduce their valuations.
The PitchBook research revealed that the value of cybersecurity unicorns grew by 24.3%, while AI unicorns saw an increase of 22.9%. These indexes, which provide daily valuation estimates, utilize a methodology that combines the prices of private startups with those of comparable public companies to gauge their worth.
The PitchBook report also highlighted the performance of the global unicorn index, which tracks the overall performance of all venture capital-backed startups valued at over $1 billion. This index rose by 12.77% in 2023. However, there was a notable decrease in the number of companies achieving unicorn status, dropping to 81 from 330 in the previous year. The success in the cybersecurity sector can be attributed to companies such as Wiz, which reached a $10 billion valuation in February, Keyfactor with a valuation of $1.3 billion in November, and Prove Identity, surpassing the $1 billion mark in October. The growth of public cybersecurity firms like Palo Alto Networks and CrowdStrike also contributed significantly to the sector's performance.
The research pointed out that AI and machine learning specialists accounted for 44% of the new unicorns last year, driven by a growing interest in generative AI. This sector saw significant fundraising activities, with Inflection AI raising $1.3 billion in June, Anthropic receiving a $4 billion investment from Amazon in September, and OpenAI securing a $10 billion investment from Microsoft at the beginning of the year.
Conversely, the agtech sector was the worst-performing unicorn index in 2023, experiencing a decline of more than 20%. The downturn in this sector was primarily influenced by the performance of two companies, Bowery and Indigo, both of which saw significant drops in their valuations. Bowery, specializing in indoor farming, faced multiple rounds of layoffs after Fidelity wrote down the value of the company’s shares by 85%. Similarly, Boston-based Indigo, a crop protection specialist, reportedly experienced a substantial valuation decrease, despite raising $250 million in August.
General news:
Marcelo Claure bought a stake of less than 5% in the general partnership and management company of Hedosophia, a tech-focused investment firm.
Warburg Pincus plans to raise about USD2.5bn globally for its third fund, focused on financial services companies.
Deals:
4MDG, Brazilian developer of a master data governance software intended to offer management, sanitation and enrichment of all types of records, raised USD ~ 1mm with BR Angels and Darwin Starups.
General news:
Founder of Magalu, Luiza Trajano Donato, one of Brazil’s biggest retailers, passed away. She was 97.
Abu Dhabi-based Advanced Technology Research Council allocated USD200mm to an initiative it will use to fund tech innovation in developing nations, such as Latin America.
Deals:
Biomakers, operator of a precision medicine center intended to develop personalized drugs from Argentina, raised USD 1.5mm in a round led by undisclosed investors.
General news:
According to Qualcomm ventures, Brazil could be a hub for the development of artificial intelligence.
Nvidia has surpassed Amazon and approached Alphabet in market value on US stock exchanges. Over the past 12 months, the chip manufacturer has risen nearly 240%, driven by the boom in artificial intelligence.
Voguer, an app for renting boats and yachts on a daily basis, similar to Airbnb, aims to rent speedboats - with daily rates of up to R$150,000. One of the vessels costs R$55 million. The entrepreneur's goal is to generate revenue of R$10 million in the first year of operation.
Uber Technologies will repurchase up to $7 billion in shares to return capital to shareholders after reporting its first full year of operating profit and consistent positive free cash flow in 2023. The buyback plan is a vote of confidence in the company's strong financial momentum.
Deals:
Circclo, Argentinian operator of an online retail platform designed for consumers to buy essential products with zero waste, raised an undisclosed seed round with investors such as Antom and Faccundo Garreton.
General News:
Company connecting retailers with delivery drivers earns R$ 70 million. Founded in 2016, the startup Eu Entrego connects retailers with a network of independent delivery drivers who make same-day deliveries.
Itau Unibanco is currently offering over 21k spots for women entrepreneurs to join the program “Empreenda & Renda”
Deals:
Bold Financial Software, fintech from Colombia that focuses on SMBs, raised a USD50M round led by General Atlantic.
General News:
Angels of Brazil will launch a new investment vertical focused on seniortechs, startups targeting individuals over 50 years old. The initiative will be carried out in partnership with the Seniortech Ventures innovation hub, part of the FCJ Venture Builder group. The aim is to foster social impact businesses that create solutions to contribute to longevity.
Mexico’s fintech landscape continues to flourish, with Finnovista’s Fintech Radar Mexico 2024, co-presented by Visa, reporting 990 fintech companies operating in the country by the end of 2023. This represents a 18.4% compound growth over the past five years, with a notable increase from the 650 firms recorded in 2023.
What am I reading?
VEF released a very interesting paper on Brazilian startup GRINGO. The article, called Gringo: Revolutionizing the Brazilian Driver Experience, describes how Gringo is tackling the opportunity to digitize the end‑to‑end driver experience in Brazil. Very worth the read!
What am I listening to? What am I watching?
Acquired podcast on VISA (done! Very worth it!)
Netflix: The Billionaire, the Butler & the Boyfriend. 3-part docuseries that discusses the last years of Liliane Bettencourt, who at the time of the 2017 death was the wealthiest woman in the world. She was worth over €30 billion, due to holding the largest number shares in the massive cosmetics conglomerate L’Oreal.
Quote of the week:
“An organization, no matter how well designed, is only as good as the people who live and work on it” Dee Hock, VISA founder