LatAm Tech Weekly
#133- Powered by Nasdaq: Q1 2024 VC figures, are tech IPOs back?, deals of the week and much more!
Happy Sunday!
I'm currently writing from the heart of Silicon Valley, gearing up for a bustling week filled with events! Kicking things off here in Palo Alto, an event called Brazil @ Silicon Valley is taking place on Monday and Tuesday. This gathering is a collaborative effort by students from Stanford and Berkeley. We're expecting some high-caliber speakers, including Dan Schulman, the former CEO & President of PayPal, Pedro Franceschi, Co-Founder and Co-CEO of Brex, and Luis Silva, Founder, Chairman, and CEO of Cloudwalk. I can't wait to see what insights and innovations they'll share.
Immediately following this, I'm off to Miami for the Latin American Forum, an exclusive, invite-only event organized by Riverwood.
If you're unable to attend any of these events, don't worry—I've got you covered. Stay tuned for a special edition next week where I'll share all the key learnings and highlights with you! 😊
Follow me on LinkedIn , Instagram or Twitter for daily updates!
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.
Just like that, Q1 of 2024 has come to a close, and the US market continues its upward trajectory. The S&P 500 saw a 3.2% rise in March, culminating in a 10.6% increase year-to-date (YTD), while the Nasdaq 100 grew by 1.2% in March, reaching 8.7% YTD. This growth indicates a renewed interest in publicly traded companies, buoyed by a resurgence in public listings from PE and VC-backed firms. Take Reddit, for instance: it launched at $34 per share and has maintained a steady climb, now trading around $49. Why does this matter? It's a sign that this positive market sentiment could eventually ripple through to the private sector.
Delving into the CB Insights State of Venture report for Q1 2024, globally we saw an 11% quarter-over-quarter increase in funding, reaching $58.4 billion, propelled by some significant investments, like Amazon’s massive $2.75 billion infusion into the generative AI firm Anthropic. However, it's worth noting that despite this quarterly upswing, funding is still down by 21% compared to Q1 2023 and 62% against Q1 2022. Deal numbers continued their downward trend for the eighth consecutive quarter, falling by 7% to 6,238. In regional terms, venture capital deal activity in Asia and Europe experienced declines of 8% and 9%, respectively. In contrast, the US defied global patterns with a slight 1% increase in deal numbers quarter-over-quarter. A particularly bright spot in this landscape is the rise in mega-rounds (deals worth $100M+), which grew by 30% quarter-over-quarter to 105. These substantial deals accounted for 45% of the total funding this quarter, a notable increase of 11 percentage points from the previous quarter. Corporate investors like Amazon, Disney, and Alibaba played significant roles in some of the quarter’s biggest deals.
Shifting our focus to Latin America, the venture capital scene presents a nuanced picture. Although raw data indicates a dip in venture rounds, the outlook for the market is increasingly positive. This optimism is underpinned by stable macroeconomic conditions. As global circumstances continue to improve, we can expect to see more encouraging figures in the next quarter.
Speaking of market trends, the IPO market, which has been somewhat sluggish over the past two years, is anticipated to gain momentum in the latter half of 2024. In preparation for this significant surge in liquidity, analysts from PitchBook's Emerging Tech Research have recently spotlighted the 20 VC-backed companies that are prime candidates for an IPO. They've paired this list with the latest valuation and revenue data in their latest analyst note. This potential wave of IPOs is a promising sign for the industry, potentially boosting exit activities significantly. Let's keep our fingers crossed that these IPOs materialize and invigorate the market.
General news:
B3, Brazil’s prominent stock exchange, secures approval to introduce Bitcoin futures trading starting April 17. The futures contracts will reflect 10% of Bitcoin’s price in Brazilian reais, using the Nasdaq Bitcoin Reference Price for valuation. Amid growing crypto adoption, Brazil moves forward with regulatory adjustments and market expansions, including BlackRock’s recent ETF launch.
After raising US$20 million, Traive begins its internationalization with Mexico. As a financial technology infrastructure for agriculture, Traive received US$20 million in a round led by the CVC of Banco do Brasil.
OneSubsea, a provider of submarine technologies and equipment, expects Brazil's share of its global revenue to increase from the current 20% to 25% within three years. The company, which does not disclose its annual revenue, was established in October as a result of a joint venture between SLB (70%), Aker Solutions (20%), and Subsea7 (10%), with headquarters in Oslo, Norway, and Houston, Texas, USA. The estimated synergy potential in the new business is over US$100 million per year in the medium term.
Visa Introduces AI Solutions to Combat Fraud. Visa’s new AI fraud prevention tools enhance security across payment platforms. Visa unveils three AI-powered tools within its Visa Protect suite, targeting fraud in digital payments across various platforms. The expansion includes network-agnostic fraud management and a focus on token fraud prevention, with a $10 billion investment in technology over five years.
Chilean Telecom WOM Files for Bankruptcy Amid $348M Debt Crisis. Seeking Chapter 11 in the US, WOM aims to restructure finances while securing $200M from JPMorgan for operations continuity.
Argentina Implements Mandatory Crypto Exchange Registry. In a regulatory shift, Argentina’s CNV introduces a registry to oversee crypto exchanges, aiming to align with international standards amid rising crypto adoption.
Deals:
Fluency Academy, a language school that combines the creator economy with digital education, has just announced the acquisition of Awari, a platform for career development for professionals in the technology market. The acquisition, of undisclosed value, aims to increase the value generation of both companies throughout Brazil, supporting portfolio diversification and growth and distribution strategies nationwide.
Blar, developer of financial data query platform intended to instantly provide interactive charts and tables from Chile, announced an early stage undisclosed amount round from Collide Capital.
Livre, Brazilian operator of a motor vehicle company intended to help physically handicapped people have mobility raised an undisclosed amount in Later Stage VC funding lead by Kviv Ventures.
General news:
Mercado Bitcoin Launches Startup Exchange and Invests in Private Offerings. In another step towards diversification, Mercado Bitcoin is utilizing tokenization to create a 'startup exchange.' The inaugural offering by MB Startups was with the fintech Asaas and raised R$29 million.
Sinqia, a technology provider for the financial market, announces its first strategic move (in terms of portfolio) after being acquired by Evertec in July 2023. The company enters the payments market with a new unit dedicated to the segment, led by Daniel Oliveira, Vice President of Payments at Evertec Brazil.
Deals:
Ada, Brazilian developer of an online coaching platform designed to teach programming languages, raised an undisclosed amount in Later Stage VC funding lead by Wayra.
Kanastra announces the purchase of 100% of Limine. The value and terms of the transaction were not disclosed. With the deal — still pending approval from the Central Bank — the founders, Elton Porpino and Nivea Yoshida, will remain with the company.
General news:
Web Summit: Swiss Startups Aim to Enter Brazilian Market. Switzerland will bring 11 startups to showcase their solutions and products at the event.
Deals:
Lawtech Lexter.ai Raises R$ 16 Million (US$ 3 Million) in Seed Round Led by Alexia Ventures, with participation from existing investors Grão.VC and Canary. Endeavor Scale-Up also joins the venture. The company has developed a platform for legal document analysis using artificial intelligence models, combining proprietary algorithms with advanced platforms like OpenAI's GPT-4.
Medical cannabis startup Ease Labs raises R$ 25 million and targets the international market. The funding comes from Brazilian management firm Airborne Ventures and American firm L5 Capital Partners. The funds will also be used for international expansion, starting with Thailand.
General News:
Corporate wellness start-up Gympass conducts a rebranding as Wellhub. According to the company, the new brand reflects its evolution beyond gyms, positioning itself as a comprehensive solution for employee well-being. In addition to the rebranding, Wellhub introduces product updates for HR leaders, benefit administrators, subscribers, and network partners.Per the Financial Times, the group valued at $2.4bn, whose backers include SoftBank, says it has begun work for an eventual IPO.
This startup turns AI into sales in banks - and now aims to reach the US. With 12 clients in Brazil and a $30 million check, Hyperplane utilizes artificial intelligence to enhance recurrence and accuracy.
TerraMagna, an agriculture fintech, forecasts revenue of R$ 150 million in 2024. Last year, the startup granted R$ 1.5 billion in credit and anticipates releasing over R$ 2 billion in 2024.
Monica Saccarelli, founder of Grão and Rico, joins Domo.VC as a new partner, participating in the raising of the fifth fund.
Zoho, Indian multinational SaaS company, launches payments in Brazilian Real. With exponential growth in Brazil, the company aims to facilitate the hiring of its services.
Alura Strengthens Female Leadership with Former Executives from Meta and Accenture. Palomma Contatore joins as CHRO, and Tavane Gurdos arrives at the company as CRO.
Deals:
With a recently acquired license from Susep to operate in the personal segment (life and personal accident insurance), insurtech Akad has just raised US$ 22.5 million (approximately R$ 110 million) at a valuation of US$ 120 million (pre-money). The round was co-led by Valor Capital and Across, with participation from Actyus, Endeavor Catalyst, and Scale-Up Ventures funds.
General News:
The venture capital firm Astella recently partnered with the global asset platform HMC Capital to offer startup investments to institutional investors such as family offices, pension funds, banks, and development financial institutions. The capital advisory company will assist Astella in the offering and distribution of the products.
Deals:
Oxygea, a CVC and CVB fund focusing on sustainability and digital transformation in the industry, has just made its first international investment. They contributed with a $1 million check in the $5 million round raised by the American company Circular.co.
InstaCarro, a startup specializing in the buying and selling of used cars in Brazil, has secured a funding round of R$ 55 million, led by the investment funds J Ventures, FJ Labs, and Rise Capital. With the launch of its asset-backed loan product, the company is nearing breakeven and will utilize this funding to build its financial arm and dealer-to-dealer sales platform, while accelerating its growth.
CashU, a fintech focusing on B2B digital credit, has just raised R$ 7.5 million in a bridge round led by Bertha Capital, an existing investor in the cap table. The investment also saw participation from existing investors ABSeed Ventures and Caravela Capital. Additionally, the funding round was joined by undisclosed angel investors.
Pulpos, a startup focused on transitioning Mexican small and medium enterprises (SMEs) to the cloud, has closed a $4M seed funding round. Andreessen Horowitz, H20 Capital Innovation, Latitud, and Newtopia participated in the round.
Avantia, specializing in technology solutions for security, intelligent video analysis, and IT infrastructure, has completed its first fundraising round, which could reach up to R$ 150 million through the fifth fund of private equity firm Crescera Capital.
What am I reading?
What am I listening to? What am I watching?
Quote of the week:
“It’s important to surround yourself with smart and talented people. Collaboration and diverse perspectives lead to better outcomes.” Jim Simmons