LatAm Tech Weekly
#49 - Q2 venture numbers, Itau + Avenue, logos discussion, deals of the week... and more!
Happy Sunday!
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As mentioned before, I am trying week after week to be (more) positive. However, numbers don’t lie - and Q2 figures for the venture world were released. I did say (several times) that things would get worse before getting better. There is a time lag between a funding negotiation, close and the acutal announcement. Therefore, funding amounts can take a few months to catch up with the current investment climate.
It is important to note that despite the numbers, I am still very bullish on tech. Every industry has its adjustments and cycles, and what is happening now is actually very healthy for the tech industry as a whole. Good companies continue to attact capital and have no major issue crusing through the months. The ones that have poor fundamentals and unit economics… will struggle. This is life. Darwinism coming into play :)
Crunchbase data shows that global funding drastically decreased in Q2 of 2022 - marking the first quarter with a significant drop in funding since the start of 2020. Q2 funding fell 26% QoQ from $162 billion in Q1 and 27% YoY from $165 billion in Q2 of 2021.
It’s worth noting that YoY comparisons are against 2021, which was a record year for venture funding. Funding for the second quarter of 2022 still exceeded every quarter in 2020. The graph below shows the evolution quarter after quarter for every stage.
As seen above, funding reached ~$110 billion, the lowest amount recorded for a single quarter since the beginning of 2021.
CB Insights also released its State of Venture Report, and points out that Global venture funding saw $108.5B raised across 7,651 deals last quarter — marking the biggest quarterly percentage drop in deals (and the second-largest drop in funding) in a decade. They also found that for the first time since Q4’20, fintech startups accounted for less than a fifth of all funding. A surprising data point, , at least for me, was that M&A deals trended down for the first time in 8 quarters, dropping to 2,502 — a 6-quarter low. I had thought M&A deals would tend upwards given the current enviornment - with more consolidation and more interesting valuations in terms of acquisition. Nevertheless, the numbers this quarter, shows a different trend.
Now, let’s go ahead to this week’s news…. Please note the new section on what I learned from readers - continue to send interesting articles my way!
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Endeavor released a report showing that women make up just 22% of Latin America VC Fund partner count. Another report by Distrito found that only five of 100 CEOs of top Brazilian startups are women. I get personally sad when I read such data. We still have a long way to go.
Endeavor announced the final closing of Endeavor Catalyst Fund IV, its largest vehicle to date with $292 million to invest in its global network of Endeavor entrepreneurs. Its most active markets over the past years have been Brazil, Mexico, and Indonesia. Latam portfolio companies include R5, Novopayment, Ualá, dLocal, Tribal, Bitso, and Creditas.
The open banking market will be worth $43 billion in 2026, according to the Open Banking Market by Financial Services and Distribution Channel report by Allied Market Research.
Colombian Startups look to Brazil for growth & investment: Executives from Rappi, Tul, Chiper, Muncher and Frubana went to Brazil to offer tips to local players on how to make the transition to international markets and also to attract investment for their operations.
Loft, Brazilian Proptech, layoffs 380 employees – which represents 12% of its staff.
The Brazilian startup Hotmart acquired eNotas, company that automates the issuance of electronic invoices. Numbers of the transaction were not disclosed. Founded in 2012, eNotas has systems to automate the issuance of invoices in more than 1,500 cities in Brazil and a 130,000 user company base. The founder and CEO of Hotmart, João Pedro Resende, says that the acquisition was a natural evolution of the relationship between the companies, as eNotas provides services to the platform's customers.
Frete.com will invest BRL300mm in logtech startups in the next two years. The idea is to buy control of businesses that have synergies with the company. Federico Vega, CEO and founder of the platform, mentioned he has already 20 startups under his radar.
Mexican unicorn Kavak plans to invest $180mm in the next couple of months to enter new countries. $120 million in Colombia, Chile and Peru and at least $60 million in Turkey. On the other hand, the startup also announced that cost cutting will be done in Brazil, Mexico and Argentina.
Frubana, technology company that allows producers of agro products to sell directly to retailers, food services, and other large consumers, raised a USD 63.3mm Series C with GGV Capital.
Vectis Partners announced the acquisition of AAWZ, company that provides a portfolio management platform for investment and financial advisories. It also provides strategy, M&A, and other consulting services. The numbers were not disclosed.
Rajeev Misra, head of SoftBank Group Corp.’s giant venture-investing arm, will step back from his role to run a new outside investment outfit as the tech-investment giant struggles with the fallout of the tech rout.
Itau Unibanco Holding SA (ITUB4.SA) acquired control of Avenue, a brokerage that provides Brazilians with access to foreign markets. Itau Unibanco will spend BRL 493 mm for 35% of Avenue, including a cash injection of BRL 160 mm and a secondary share purchase. Two years after the closing of the first tranche, it will purchase an additional 15.1% stake for an amount yet to be determined, reaching a controlling stake of 50.1%. Itau will also be able to exercise a call option for the remaining equity interest held by Avenue shareholders five years after the closing of the first part of the deal.
Creditas focuses on their path to profitability, which should take place in 2023. To that effect, the fintech announced a USD 50mm extension to their round and acquired Kzas for BRL 500mm – essentially the banking license they needed to continue pursuing their strategy.
What did I learn from readers?
I recieved from a reader a very interesting article from Radek Sienkiewicz’ VeltvetShark: Why do so many brands change their logos and look like everyone else?
There is a trend in logo design that started around 2017-2018. It’s as if many companies decided that being unique was a handicap and that it was better to be like everyone else - the font is called Sans serif. Why? Brand specialists name a couple of reasons: i) ‘modern utility’ of sans serif typefaces: cleaner and more legible, they are better suited to a variety of media and work particularly well online. ii) simplification and need of blending in as a “trusted” company iii) Readability: Especially on mobile, but everywhere else as well: from huge billboards to tiny footer links at the bottom of mobile websites.
What am I reading?
What did I listen/watch?
NoMaximo20 Podcast with Marcella Quintella, Co-Founder of Education Journey
JOB POSTS
Incognia is hiring! The Company provides zero friction mobile authentication to banks, fintech, and mCommerce companies for increased mobile revenue and lower fraud losses. Incognia’s location technology uses signals and motion sensors to silently recognize trusted users based on their unique behavior patterns and is a key enabler for zero-factor authentication. It was founded in 2020, by Andre Ferraz – extremely bright, 2nd time founder and a good friend of mine. The company is based in Palo Alto, California.
Please see opportunities below:
Sales – USA
Copywriter – USA
Customer Success – Brazil
Research Engineer – Brazil
Data Engineer – Brazil
Stie reliability engineer – Brazil
Here is what other top tech companies are looking for…
Tech Content Analyst - Undisclosed firm (reply to this e-mail)
Early VC Investor - Undisclosed firm (reply to this e-mail)
Banking Analyst: Nomad
Head of Sales - Rural
*respond to this newsletter if you want to post a job or if you have interest on the openings above*
Quote of the week:
"The tranquillity that comes when you stop caring what they say. Or think, or do. Only what you do. (Is this fair? Is this the right thing to do?)” —Marcus Aurelius
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