LatAm Tech Weekly
#60 - Powered by Nasdaq: Regulation Changes, Cubo Conecta, Belvo, Integra Groupe, deals of the week, and much more!
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It is no news for readers that VC activity slowed down globally in the past few months. However, things are starting to pick up again. First and foremost, according to The Information, U.S. VC investors are sitting on USD 290 bn of dry powder – with USD 162bn being reserved for new investments. This figure is 46% greater than what was seen in 2020. Therefore, startup founders should expect a pickup in venture capital interest next year as a record level of dry powder pressures the VC funds to speed up their investment pace.
Moreover, it is also true that inflation, high interest rates and a sharp decrease in software stock prices pulled back the speed of dealmaking, but opportunities remain and investor sentiment is improving. The latest Quantitative Perspectives report released by Pitchbook on Q3 shows that total value of venture-backed companies in the US has reached $3.3 trillion, trailing the total PE-backed market cap by only 3%. Also, aggregate unicorn valuations now surpass $2.3 trillion, even given the slowdown in unicorn creation in 2022.
Moving on to LatAm, Bloomberg Linea released the 2022 edition of LatAm’s 500 Most Influential People. Looking at the names, tech is very well represented! To name a few: Ualá’s Pierpaolo Barbieri, Rappi’s 3 co-founders, Bitso’s Barbara Gonzalez, dLocal’s Sergio Fogel and Meli’s Marcos Galperín.
Brazilian regulators announced a few changes that could have a marginal impact on profitability in the card/acquiring industry but could impact significantly selected fintechs. In a nutshell: interchange fees for card issuers on pre-paid cards will now be capped at 70 bps. They will also be subject to a shorter, debit-like settlement period of two days. Debit card interchange is also getting a clearer 50-bp cap, from 70 bps or a ~50-bp average previously. The measures will become effective as of April 1, 2023.
PetLove, Brazilian eCommerce site offering pet products for dogs, cats, fish, reptiles, rodents, and more, raised an undisclosed amount in a Series C round by Globo Ventures.
Deribit, professional-grade cryptocurrency derivatives platform based in Panama, announced a Series A of USD 40mm with the participation of 10T Fund, Akuna Capital, and QCP Capital.
Despite recent announcements, SoftBank affirms that it is eager to keep investing in LatAm. Rodrigo Costa, a partner at the firm, says he hopes to announce new investments soon.
Solfácil, Brazilian platform for financing solar energy announced an extension to its Series C of USD30mm by Fifth Wall Ventures.
The Latin American open finance platform, Belvo, has been authorized by the Central Bank of Brazil to operate as a Payment Transaction Initiator (ITP). The company is now working on an account-to-account payment initiation solution that will allow its customers in the country to process Pix payments end-to-end within their own apps and websites through bank authentication, reducing friction for the consumer.
Ali, Brazilian fintech company that offers financial wellbeing solutions and payroll-deductible loans to company’s employees announced a Series A of USD 25.2mm with investors such as Jan Karsten, former MD at Citibank, and BoostLab.
The Brazilian Central Bank announced that the “Real Digital” will be launched by 2024.
More than 1000 people attended the Cubo Conecta event in São Paulo –founders, investors and corporates interested in the ecosystem. Cubo is the biggest tech hub in Latin America, owned by Itau Unibanco. At the opening of the event, Milton Maluhy, CEO of the Bank reinforced that Itau’s corporate venture capital strategy is in the making and more news will come in the following months. The initiative, led by former Redpoint Anderson Thees and Manoel Lemos, is being long awaited by the market since it was first announced at the Itau BBA Founders Summit, flagship event for technology.
Francesca Whalen and Alfredo Vargas, two executives with plenty of experience in financial markets, met at Stanford a couple of years ago and decided to use their knowledge in the service of contributing to the development of startups in Latin America. They founded Integra Groupe, a venture capital firm that invests in early stage, with an eye on companies that bring technology to different sectors and that have ESG criteria. The firm's differential lies in a tool launched to the market this month, called iScore, the first on the market to quantitatively measure the progress of startups in ESG.
SoftBank's Vision Fund unit is set to cut around 150 people, or 30% of its staff globally. The firm fired 10 people from its LatAm team.
I participated in the AWS Starups Journey event held in Belo Horizonte, Brazil. Super interesting to get to know new startups and also to exchange ideas about the tech enviornment. I am happy to see Brazil’s tech ecosystem thriving in several areas of the country.
Cortex, Brazilian growth intelligence platform for the marketing and sales journey that helps businesses make smart and data-driven decisions announced a Series C of USD48mm led by Lightrock with the participation of previous investors Riverwood and Softbank.
The fast delivery market has a new competitor: joining forces with Uber's Cornershop, Carrefour launched its own solution, called Carrefour Já, with deliveries in 15 minutes. Developed in partnership between the two companies, the new brand starts with its operations in São Paulo and uses the structure of Carrefour Express stores for the selection and delivery of products.
What did I learn from readers?
ZeroHash CEO Edward Woodford sent over a great article written by him on the Company’s blog. In essence, it discusses that what we call “traditional finance” firms are converging to “crypto companies”. He argues that every finance company will become a crypto company, and every crypto company will become a finance company. Very straight forward and easy read for those interested in the subject - with concrete examples. Worth the read :)
What am I reading?
What did I listen/watch?
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Quote of the week:
“You never really understand a person until you consider things from his point of view—” “Sir?” “—until you climb into his skin and walk around in it.” To Kill a Mockingbird, Harper Lee.