LatAm Tech Weekly
#147- Powered by Nasdaq: Q2 in tech, Coatue’s 2024 EMW Conference, deals of the week... and much more!
Happy Sunday!
Continuing from last week, I've received more data on the tech ecosystem for Q2 2024. This post will once again focus on the detailed figures in tech for the quarter.
P.S: Do you like the new layout? Comments, suggestions, feedbacks… always well appreciated!
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Doubling down in LatAm – when we take into account equity and credit card receivables funds, the quarter was stellar for the region. According to Sling Hub data, $2.2B was invested, with over half of that amount pouring into Brazilian startups, marking an impressive +160% YoY increase. Notably, this is the first time we've surpassed the $2B mark since Q3 of 2023. Some of the standout rounds this quarter include Cloudwalk ($308M), Celcoin ($125M), and Vercel ($250M). M&A activity also saw a boost, with 47 deals conducted in Q2, representing a 24% rise and a 38% YoY growth.
When focusing solely on equity rounds, the volume stands at $1.24B – a QoQ increase of 76% and a YoY increase of 69%.
The median round size was $1.2M, which might seem modest at first glance. However, considering that the most common deals were in the pre-seed stage, this figure makes sense and naturally lowers the overall median. This does not mean that growth rounds did not happen, but rather the contrary, Series E was the stage that raised the most in USD when looking at the quarter.
Moving on to sectors, Fintech continues to be the name of the game in LatAm, raising 58% of the total volume. It was followed by Deep Tech (13%), and Energy (5%).
I believe the general sentiment is improving, and we continue to see foreign interest in the region. This quarter we had two new investors betting on local companies: Bond Capital & Summit Partners.
Overall, we are starting to see more activity in private placements, and bigger growth rounds when compared to 2023. It is fair to expect an overall improvement of markets in the second half of 2024.
On to Coatue’s EMW Conference (link below) - it is a MUST WATCH not only for tech enthusiasts but also to those who simply follow public & private markets in general. The presentation is divided into public & private markets. Below a couple of highlights and graphs.
Public Markets Highlights:
Economic Resilience:
Despite challenges such as inflation and geopolitical issues, the public markets have shown resilience. Macro is becoming “less important”…
Technological Innovations:
The rise of AI and automation technologies is seen as a significant growth driver in public markets. Companies leading in these areas are expected to disrupt industries and offer substantial investment opportunities. AI, AI, AI. With that said, is software dead? The answer is NO.
Private Markets Highlights:
Generative AI:
Generative AI is highlighted as a major area of investment in private markets due to its transformative potential across various industries.
Innovation and Long-Term Growth:
Emphasis on innovation and adaptability for private companies to sustain growth. Investors want everything - that is why IPOs are not back (yet) - profitability + growth + size + acceptable valuation
General news:
AI-powered humanoid robots are being adopted by Big Tech to address the global labor shortage. Companies like Tesla, Amazon, Microsoft, and Nvidia are investing billions in robots designed to perform human tasks. Currently used in warehouses, these robots may soon work in homes and offices.
Lexart, a leader in cloud solutions, software development, and cybersecurity, has launched operations in Brazil to bolster tech innovation. Founded in Uruguay in 2015 and expanding globally, Lexart caters to startups and tech companies with tailored services in cybersecurity, product acceleration, and advanced software development.
Apple announces RCS arrival on iOS 18, fulfilling a long-awaited dream. At WWDC, Apple revealed integration of this messaging system in its latest OS update, set for release between September and October. This update promises significant benefits for Brazilian businesses, enabling robust communication tools to reach targeted audiences effectively.
Magroove, a digital music distributor, seeks R$ 5M to expand services for musicians. With 70% of its artists in the US and Europe, the Brazilian-founded startup aims to enhance its offerings for emerging artists with up to 1M monthly listeners. After raising R$ 8M with DOMO.VC in 2023, Magroove plans to use the new funds to provide album cover design, streaming platform pitches, and royalty advances.
Former Julius Baer CEO launches app to scout soccer talents like Vini Jr. The app aims to identify young players with potential and provide them with exposure to professional scouts and clubs.
Brazil's Pix system hit a new record with 224.2 million transactions in a single day, moving R$ 119.4 billion. This milestone reflects Pix's growing adoption and its role in the national financial system. Since its launch in November 2020, Pix has reached 165.8 million users and significantly impacted financial inclusion by providing 24/7 free transfers.
Deals:
Realize raises R$ 1.4M to enhance EAD with scalable content production tools. Led by Investidores.vc, the investment round attracted 48 investors and strengthens Realize's position in the edtech market. Founded in 2020 by Isabella Stulp and Gustavo Quirino, Realize provides solutions for educational institutions to streamline online content creation, manage production processes, store materials, format educational content, and integrate with any LMS/AVA.
General news:
Uruguay is rapidly becoming a magnet for tech talent, attracting prominent figures like Marcos Galperin of Mercado Libre. With a welcoming regulatory environment and a strategic focus on innovation, Uruguay aims to establish itself as a key hub for technology and entrepreneurship in Latin America. This growth is bolstered by strong governmental support and an influx of skilled professionals seeking opportunities in a dynamic and business-friendly landscape.
A recent study by Fortinet reveals a significant shortage of cybersecurity professionals in Brazil, with an estimated 750,000 specialists needed. Globally, the demand is for 4 million professionals to mitigate risks and manage digital threats. In 2023, 87% of companies experienced security breaches due to this skills gap, resulting in significant financial and reputational losses.
Startups like Vittude and Serena are providing crucial psychological support to flood victims in Rio Grande do Sul, emphasizing emotional assistance through technology and partnerships.
AI in healthcare is now a reality, as discussed at the Health Roundtable event hosted by Brazil Journal. Experts highlighted how AI is revolutionizing diagnostics, treatment plans, and patient care. With AI's ability to analyze vast amounts of data quickly and accurately, the healthcare industry is experiencing significant advancements in efficiency and outcomes. The event underscored the importance of continued innovation and collaboration to fully realize AI's potential in transforming healthcare.
Brazilian fintech Up.p, specializing in secured credit, plans to hit $1 billion in operations by 2026, fueled by growth in private payroll loans.
Urbano Bank, a fintech of Grupo H&P, and Stark Bank have received authorization from Brazil’s Central Bank to operate as regulated financial institutions. Urbano Bank can now issue electronic money and post-paid instruments like credit cards. Stark Bank, with a capital of R$ 76.5 million, is approved to function as a payment institution, offering services including corporate accounts and credit.
General news:
São Paulo's new "Não se Cale" law is revolutionizing the tech and startup event scene by enforcing strict measures against sexual harassment. The law requires staff training, clear anti-harassment protocols, and safe, anonymous reporting mechanisms. This legislation represents a significant step towards creating a safer, more inclusive environment for women in these traditionally male-dominated spaces.
Alexandre Riccio Oliveira is appointed as the new CEO of Inter in Brazil, while João Vitor Menin takes on the global CEO role for the super app.
Dan Yamamura from Fuse Capital appointed as Endeavor Brasil's new ambassador. He aims to support scale-ups, particularly fintechs, in growth challenges like investor relations, M&As, and governance.
A BCG study reveals that while 83% of executives prioritize innovation, most companies are not ready to implement it effectively. Only 3% of organizations are deemed innovation-ready in 2024, down from 20% in 2022. The tech, media, and travel sectors lead in prioritizing innovation, but less than half align their business and innovation strategies effectively. In Brazil, risk-averse culture and unclear strategies hinder progress, with only 50% seeing innovation as a top priority. Companies using generative AI (GenAI) are 80% more likely to be innovation leaders.
Solfácil, a solar energy ecosystem, has secured a record-breaking R$ 750 million through CRI to finance over 22,000 distributed solar projects across Brazil. This marks their second CRI issuance in 2024, bringing their total capital raised this year to over R$ 1.5 billion. Coordinated by Itaú BBA and XP, the funding highlights growing investor demand for low-risk, high-yield investments with positive environmental impact.
EqSeed has announced a leadership change, with Igor Monteiro taking over as CEO from co-founder Greg Kelly, who will now serve as Executive Chairman.
Deals:
Farmtech has secured a $10 million investment from Bewater to expand its rural digital credit services in Brazil. The partnership aims to boost Farmtech’s market presence and accelerate the release of new financing products for rural producers.
Legaltech startup Jurídico.AI has raised R$800,000 in angel investment to enhance its AI-powered virtual assistant, which helps lawyers with repetitive tasks like drafting legal documents. With around 2,000 clients, the funds will be used to refine their proprietary technology and expand their product offerings.
Paraguayan-Bolivian startup BucksApp secures $1M in pre-seed funding to revolutionize revenue growth using transactional data in Latin America. Their AI platform turns raw data into actionable insights for financial and non-financial sectors.
HR Path secured a €500 million investment from Ardian to expand its global operations, including in Brazil. This funding will support international acquisitions and strengthen HR Path’s presence in key markets such as the US, Canada, Germany, and Australia. In April, HR Path bolstered its Brazilian footprint by acquiring Intelligenza IT, a consultancy specializing in HR technologies.
VRA, a startup leveraging AI to decode SMEs, has successfully raised capital. The company, founded by Pedro Costa and Daniel Silva, aims to transform how small and medium-sized enterprises access and manage financial services. With this new funding, AVRA plans to enhance its AI capabilities and expand its market.
General news:
Verve Capital shifts focus to Brazil with its second fund, targeting $10 million to invest in up to 25 early-stage Brazilian startups over four years. The fund aims to leverage local insights, focusing 95% of its investments in Brazil while reserving 5% for international opportunities in Latin America. With $6 million already raised, Verve plans to invest in sectors like fintech and retail, emphasizing practical solutions over hype trends.
Clara launches Insights, an AI tool to optimize business expenses by analyzing hundreds of thousands of corporate payments, helping companies achieve savings.
Small businesses often struggle to collect payments, leading to financial vulnerability. Cobranza Online, a social impact platform, has been addressing this issue for 6 years. 82% of their small business clients face 6 unpaid invoices annually, impacting their liquidity and access to credit. Chilean startup Cobranza Online helps businesses with effective debt collection, processing over 10,000 unpaid invoices for 45,000+ debtors.
The Central Bank of Brazil has relaunched its Financial and Technological Innovations Laboratory (LIFT Lab) to accelerate seven blockchain and DeFi projects. This 2023/2024 edition received 256 proposals, selecting 82.
A new study reveals a sharp decline in boleto acceptance, with BNPL (Buy Now, Pay Later) poised to overtake it as the third most popular payment method in Brazilian e-commerce. Boleto acceptance has dropped to 47.5%, while BNPL is rising at 42.4%.
General news:
SoftBank, after acquiring Arm, has now purchased British chip startup Graphcore. This move underscores SoftBank’s aggressive push into the semiconductor industry, aiming to enhance AI and data processing capabilities. Graphcore, known for its innovative Intelligence Processing Units (IPUs), complements SoftBank’s tech portfolio, potentially reshaping the AI hardware landscape.
Senators and cybersecurity experts advocate for the creation of a national cybersecurity agency in Brazil, aiming to involve both government and private sector stakeholders.
Expectations are high for Startup Summit 2024, set to be a landmark event in Brazil's startup ecosystem. Organized by Sebrae/SC and ACATE, it anticipates 40,000 attendees, blending virtual and in-person participation from August 14-16 in Florianópolis. I will be there, come say hi!
Deals:
Monkey Exchange secures a funding round with B3, focusing on digital invoices. The partnership aims to enhance liquidity and efficiency in the receivables market, leveraging B3’s expertise. Monkey Exchange's platform allows companies to trade receivables, improving cash flow and financial management. This move strengthens their position in the fintech space, driving innovation and growth in Brazil's financial market.
LAVCA Tech Brasil 2024
Date: August 21
Location: Google HQ na Faria Lima
Description: LAVCA Tech Brasil is an annual meeting of LAVCA's network of Brazil-focused VCs and tech investors in São Paulo. This year's meeting will include keynote fireside chats, breakout sessions and networking opportunities designed to build meaningful relationships amongst investors active in the region.
Brazil Tech Summit:
Date: August 9
Location: São Paulo
Description: This international summit features 100 global speakers and focuses on catalyzing entrepreneurial and business ecosystems in emerging markets. It includes panels on trends and opportunities in Brazil, industries of disruption, and the role of technologies like AI and blockchain.
Digitalks Expo:
Date: August 23-24
Location: São Paulo
Description: A major event that brings together professionals from various tech sectors to discuss digital transformation, innovation, and technology trends.
Colombia Tech Week:
Dates: August 26 - September 3
Location: Bogotá and CaliOverview: Colombia Tech Week 2024 is set to be a major event in the Latin American tech scene, bringing together startups, venture capitalists (VCs), accelerators, corporates, and international tech communities. The event aims to position Colombia as a hub for investment and innovation, with a focus on fostering connections and creating business opportunities across the region.
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.
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: 8-11 de Outubro
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.
#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.
“AI will probably most likely lead to the end of the world, but in the meantime, there'll be great companies.” –Sam Altman