LatAm Tech Weekly
#136- Powered by Nasdaq: Itau week in NY, Rubrik IPO, tech earnings, deals of the week... and much more!
Happy Sunday!
This past week was packed with exciting tech events in Brazil. I had the privilege of speaking at DOMO VC's annual LP event, discussing tech trends. For those unfamiliar, DOMO is an early-stage Brazilian venture capital firm that invests in tech startups throughout LatAm, with a focus on disruptive and innovative founders. Additionally, Upload Ventures, another impressive fund operating in Brazil and Mexico, spans strategies from early to growth stage and hosted their annual event in Sao Paulo. This year, Cristiano Guimares, a partner and member of the executive committee at Itau Unibanco and also head of Corporate and Investment Banking, participated in a panel discussing the tech and markets landscape. Below are some photos from the events!
On another note, but still on the events theme, coming up soon we have the Itau week in New York! Each passing year, the bank reinvents itself and strives to do something different—always with an eye on the future.
In the year that Itaú Unibanco celebrates its 100th anniversary, we have created an event that will become an annual fixture: The Itaú BBA Next 100 Years. I am fortunate and honored to be one of the organizers of an event that will kick off an incredible week. Speakers like Al Gore, Miachel Miebach (Global CEO of Mastercard), Adam Selipsky (Global CEO of AWS), Bill Ackman, Ali Ghodsi (CEO of Databricks), and Judson Althoff (Global CCO of Microsoft) will grace our stage, moderated by the renowned Nina Easton.
The week will continue with the well-known 17th Itaú BBA CEO Conference, the 4th Itau BBA Tech Summit, and the Women Leaders Itau BBA cocktail.
Wow! I don't even need to say how excited and eager I am!
PS - Our CEO conference will also feature sports names like Kelly Slater, Ronaldo, Rickson Gracie, and Flávio Canto. I CAN’T WAIT!
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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.
Continuing on with our usual market update, the past week presented a mix of outcomes. On the positive side, tech earnings were notably strong. The "Magnificent 7 stocks" performed well, highlighted by several key players. Microsoft reported a 17% increase in revenue, reaching $61.9 billion for the quarter, with operating margins improving by 2 percentage points to 45%. This was driven by growth in Azure and cloud services, and an outstanding performance from the Xbox division following the Activision acquisition. Alphabet also saw significant gains, with revenue up 15% to $80.5 billion and operating margins increasing by 7 percentage points to 32%, spurred by growth in Search, YouTube, and Cloud. The Google parent company further buoyed investor confidence by announcing a $70 billion stock buyback and a $0.20 cash dividend, which led to a 12% rise in its stock. Intel and Snap also reported strong results, with Intel’s revenue up 9% year-over-year to $12.7 billion and Snap's revenue increasing 21% to $1.19 billion, boosted by enhancements to its advertising platform.
In other exciting news, Rubrik made its public debut, marking a significant exit for Lightspeed and a notable milestone in the tech sector's resurgence. Rubrik's stock soared by 16% on its first trading day, valuing the company at $6.6 billion based on outstanding shares. This surge reflects growing investor confidence that the IPO window for venture-backed companies is reopening. Established in 2014, Rubrik is a provider of data and cloud system solutions that focuses on protecting enterprise data. The company saw its annual recurring revenue from subscriptions increase by 47% in 2023. Despite reporting a $354 million net loss in the last fiscal year, Rubrik's IPO serves as a litmus test for the market's appetite for high-growth, venture-backed companies that are yet to turn a profit. The stock ended the week at $37.29, significantly higher than the $32.00 IPO price, suggesting a strong investor interest.
Also on the positive front, but looking at LatAm, QI Tech (Brazilian fintech) is the newest unicorn on the block! QI Tech has extended its Series B round, raising additional equity with current investor General Atlantic, as well as Across Capital. Following the extension, QI Tech has achieved unicorn status, six months after raising its $200m Series B round in October 2023.
On a less positive note, recent data revealed a slowdown in U.S. GDP growth to 1.6% in the first quarter, coupled with an acceleration in the core price index to 3.7%. This combination of slower growth and higher inflation presents a challenging scenario. It complicates the Federal Reserve's task significantly, as cutting rates to stimulate short-term demand becomes more difficult when inflation remains persistently high, hovering between 3-4%, well above the 2% target. This situation underscores the delicate balance the Fed must maintain in its monetary policy decisions…
General news:
Banco de la República de Colombia and Montran launch a new central securities depository. The new platform by Montran is set to enhance the efficiency, risk management, and transparency of Colombia’s capital markets.
With a R$700 million investment, John Deere begins to "nationalize" smart machines. The multinational agricultural machinery company announces details of its investment in expanding the Catalão factory in Goiás, from where the sprayers will be equipped with Artificial Intelligence.
Credicuotas and Pomelo launch new credit card to enhance financial inclusion in Argentina. The prepaid card powered by Pomelo aims to streamline credit usage for underserved markets in Argentina, featuring physical and virtual versions.
Deals:
Zig, a complete payment platform for events and nightclubs from Brazil but present in 25+countries, raises R$110 million in a round led by the funds Cloud9, Across Capital, and Endeavor Scale-Up Ventures. Use of proceeds will be to expand geographically and invest more in AI.
Newsco, creator of an AI-powered news aggregator app (a sort of Spotify for news), enters the market supported by a R$1.6 million pre-seed round led by Strive — the accelerator invested R$750,000, with the remainder coming from some angel investors.
General news:
SoftBank will invest $960 million to adopt generative artificial intelligence. Once the investment is completed, SoftBank's computing power will likely rank among the highest in Japan.
iFood, Mercado Pago, and Arco Educação have joined forces in a campaign to boost donations for the Maratona Tech, a project aimed at sparking the interest of public school students in technology. The initiative, led by the Cactus Association in partnership with the Tech 2030 Movement, has trained approximately 4,000 teachers and engaged the participation of 187,000 students from all Brazilian states in its last edition.
Deals:
LiveMode, a sports and media agency with CazéTV as one of its main businesses, has just announced the sale of a significant minority stake to General Atlantic and the private equity fund from XP. The company did not disclose the amount of its first fundraising.
General news:
Brazil leads the Latin American edtech market and has moved $475 million in 10 years. The country accounts for almost 70% of the total number of edtechs in the region, 80% of the investment volume, and 76.7% of the funding rounds, according to the Distrito report.
The number of customers of digital banks and fintechs in Brazil continued to grow in March, driven by the increase in the user base of platforms such as PicPay, PagBank (formerly PagSeguro), and Mercado Pago. Conversely, Nubank, experienced a decline in the number of active users between February and March.
CAF, a digital identity company based in Brazil, has just launched a platform for user authentication in the sports betting segment, known as 'bets'. Named Bet ID, the new solution allows access to information about athletes and their personal connections in public databases through a network of APIs.
Investments in digital advertising reached R$ 35 billion in the Brazilian market last year. This represents a nominal increase of 8% compared to the R$ 32.4 billion in 2022 (taking into account that inflation in 2023 rose by 4.6%, according to IPCA/IBG).
EDP's CVC is investing over R$ 500 million in startups. Founded over 10 years ago, the structure, known as EDP Ventures, has invested R$ 340 million so far and holds an active portfolio of 39 startups.
Founded in 2021, the São Paulo-based startup Vixtra aims to become the platform for Brazilian importers. Through its platform, it intends for all types of importers to be able to solve their tasks. To accelerate funding, the company has just completed a fundraising round via FDIC of R$150 million. In this investment modality, unit holders have earnings linked to resources from a company.
Opportunity for startups: Sebrae program trains companies to attract investments. Startups from all over Brazil can now apply for the new cycle of Capital Empreendedor, a program by Sebrae that facilitates connections between innovative companies and investors. This is the seventh edition of the initiative, which prepares small businesses to attract investments through a completely free journey. The deadline for registration ends on May 10th. In the six previous years, the volume of investments through the program has already reached approximately R$327.4 million, across 263 startups.
Deals:
Data4Sales, Provider of information services intended for e-commerce stores based in Montevideo, Uruguay, raised $2,3M in Seed Round funding led by DGF.
Brazilian fintech Greg receives a R$2 million investment from Hiker Ventures. This investment marks a new phase for the startup previously known as Contself, which now aims to expand its sector of operation.
Gasparin , namely CUB, a startup that provides financial solutions for the real estate sector in Brazil, has just raised R$14 million from Alexia Ventures. This investment is part of a seed round, initiated back in 2022 when the fintech was founded and funded by TerraCotta Ventures, one of Brazil's main investors in proptechs, and Graphene Ventures from the United States.
General News:
QI Tech is the first Brazilian unicorn of 2024. After receiving an investment of US$200 million at the end of last year, the fintech has now added another US$50 million in the extension led by General Atlantic and Across Capital. (read more above)
Data management software maker Rubrik began trading on the New York Stock Exchange (read more above).
Merama, a holding company of digital-native brands in Latin America, has just announced raising $80 million in a five-year debt with JP Morgan. CEO and co-founder Felipe Delgado stated that the funds will be used for refinancing existing debts and maximizing organic growth. Merama is also keeping an eye on some M&A opportunities.
Study shows more than 750 dedicated startups exploring AI in Brazil. A survey carried out by Liga Ventures in partnership with IFood calculates 772 unique startups that apply AI in their solutions.
Meta drops almost 15% on the stock market and puts pressure on technology stocks. The fall in the company's shares before the markets opened reduced the company's market value by more than US$180 billion.
Deals:
Neowrk, Brazilian startup that has developed advanced and unique hardware, software, and artificial intelligence technology to optimize workspace management, is receiving a R$ 10 million investment in a round led by Indicator Capital with R$ 8 million, complemented by current partners and Real Estate market investor Daniel Cherman.
Yet Another Company, developer of a fintech platform intended to build the financial future internet natives deserve using cryptography and markets from Argentina, raised $20M in Early Stage VC led by HackVC.
Fintok, developer of an application programming interface designed to integrate with financial institutions from Chile raised $7M, led by Propel Venture Partners.
The cashback company Méliuz announced that it signed a contract for the acquisition of 19.4% of Zoppy, a company that provides CRM management services for small and medium-sized retailers, for R$2.9 million.
General News:
InDrive announces former Kovi executive as country manager in Brazil. Stefano Mazzaferro aims to integrate global strategies with local insights to accelerate the company's growth in the country.
BeConfident: the AI startup created by students that attracted Latitud Ventures reached a milestone. In just six months, the startup using AI to teach English reached a revenue of R$ 1 million; B2B expansion is planned for 2025.
São Paulo-based startup Food To Save aims to help companies reduce food waste while offering consumers affordable dining options. With this technology, the company generated revenues of 30 million reais in 2023, marking a growth of 1000% compared to 2022. And the plan is not to stop there — quite the opposite. The goal is to more than double in size in 2024, reaching 72 million reais in revenue.
Deals:
Vinci Partners has just announced the acquisition of MAV Capital — a small transaction, but one that enhances the asset manager's presence in agribusiness. MAV Capital manages R$550 million in assets, compared to Vinci Partners' $51 billion (approximately R$265 billion at today's exchange rate).
SQM Lithium Ventures Invests $2 Million in Chilean Startup Movener.
Movener becomes the first Chilean company in SQM’s venture portfolio, aiming to transform traditional trucks into hybrid-electric vehicles.
What am I reading?
The Information- Rubrik IPO
What am I listening to? What am I watching?
Finished the latest Acquired episode on Microsoft!!!! Couldn’t recommend more. Next week I’ll try to do a TL;DR version for my readers - given that the podcast is 4 hours long.
Quote of the week:
“The world won’t care about your self-esteem. The world will expect you to accomplish something BEFORE you feel good about yourself. “ Bill Gates