LatAm Tech Weekly - Special Edition III
#89 - Powered by Nasdaq: Itau BBA Tech Summit NY, State of Private Markets Q1, selected news & much more!
Happy Mother’s Day Sunday!
Special date indeed. Congratulations to all moms out there - you are truly super heroes and definitely irreplaceable.
They say “third time's the charm”, therefore this will be the last of my special editions - next week we will go back to the standard format as things calm down (a bit). This time around we will kick off with a brief summary of Itau BBA’s Tech Summit, then go ahead to an overview of a recent report by Carta on the State of Private Markets Q1 and close with selected news that amidst everything that was happening, I was able to grasp. Important note: I do post daily tech news on my Twitter account. If you are interested and can’t wait until Sunday, please make sure to follow me there too!
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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.
ITAU BBA THIRD ANNUAL TECH SUMMIT
Itau BBA hosted its third tech summit in NY on Monday, and gathered more than 220 people from the ecosystem. The participants were in the vast majority founders from Brazilian startups and partners from global venture capital and growth funds looking at the region. The afternoon was composed of panels and intense networking. The event was sponsored by AWS and Snowflake, and also supported by law firms Machado Meyer and Wilson Sonsini. Thank you all for the partnership!
Below you will find a brief summary on what was discussed on each of the panels. Thanks again to my SaaSholic friends - these guys are true examples! They not only attend the events, but also take notes - and now I can share those with you here ;)
Artificial Intelligence & The use of Data
Ben Gotfredson, Global Startup Program Manager (Snowflake ); Cesar Gon, Founder & CEO (CI&T); Thiago Maceira, Head of Tech Investment Banking (Itau BBA)
The panel with Ben Gotfredson and Cesar Gon discussed the increasing relevance of AI and its surge in products, emphasizing the need for governance and security in implementation.
Three important factors for companies to consider when implementing AI were discussed: organizational structure, management systems, and leadership models, with an emphasis on simplicity and financial optimization in data processes.
Challenges related to data creation and movement were highlighted, and caution is urged in the implementation of AI with thoughtful consideration of data ownership, intellectual property, and applications.
Web & Applications
Kathryn Nuys, Global Head Specialized Industries (Amazon Web Services); Alexandre Assolini, Founder&Executive Chairman (Vortx); Brian Brooks, Founding Partner (Valor Capital)
The panelists highlighted the importance of stable coins, infrastructure, and regulatory clarity in the crypto industry. It also emphasized the potential of blockchain and cryptocurrency in financial markets, particularly for financial inclusion and the tokenization of real assets.
The next frontier: Cross Border Financing
Roberto Lee, Founder & CEO (Avenue); Anderson Thees (Itau Unibanco) ; Joao Del Valle, Co-Founder & CEO (EBanx); Julia De Luca, Global VC Coverage (Itau BBA)
Panelists discussed the challenges faced by companies in the financial industry, such as regulations, infrastructure, and technology, and suggested that combining infrastructure could be a solution.
The speakers emphasized the importance of not waiting for the market to turn before seeking or making investments. Founders should be even more focused on building great companies during uncertain times.
Internationalization of Brazilian startups: understanding foreign markets, and having a team on the ground is of extreme importance for success. Top management need to be involved in order to adapt to cultural differences when expanding a business.
Which direction is e-commerce heading?
Geraldo Thomaz, Co-Founder & Co-CEO (VTEX); Diego Barreto, CFO (iFood); Kai Schoppen, Founder & CEO (infra.commerce); Fernando Cirne, CEO (Locaweb); Roderick Greenless, Head of Global Investment Banking (Itau BBA)
Panelists discussed the future of commerce in a digitalized e-commerce landscape, including the incorporation of physical stores and the importance of AI and machine learning.
The session also covered the challenges of working with a large amount of data in the context of a company, and the use of AI to efficiently route orders, optimize pricing, and improve customer experience.
The speakers mention the importance of on-premise concepts in finance and working on cyber security measures to protect customers and businesses in online transactions.
The challenges and opportunities related to the gig economy in the context of e-commerce, including companies providing benefits and protections for gig workers is becoming increasingly important specially in Latin America.
STATE OF PRIVATE MARKETS - Q1 (Carta)
I know you all might think that Q1 analysis is “old news”. However, Carta released its most recent State of Private Markets on May 1st, and while it is true that the data might be “old” - I truly believe that the analysis made is of great value and worth sharing with my readers. I’ll highlight some below, but strongly recommend you to go through the link in its integrity. Hope you like it!
Note that this analysis is based on the US market - which is, as I have repeated several times here - a good indicative of what will happen in LatAm.
Even though total venture capital raised by startups plunged 80% from Q1 2022 to Q1 2023, there are signs of a “venture spring” as valuations from seed to Series C ticked up from recent lows and median round sizes mostly stabilized. Are we in face of a possible rebound?
As the bid and ask price gap continue to close and companies run out of cash, down rounds spiked in frequency: ~20% of all venture investments in Q1 were down rounds, the highest proportion since 2018. That is, one in five venture rounds raised in Q1 came at a lower valuation than the company’s previous round. That figure is 3.6x higher than a year ago.
Bridge rounds as a top pick: For companies ranging from Series A to Series C, bridge rounds have emerged as an increasingly attractive option. At least 40% of all investments in Series A and Series B companies were bridge rounds in Q1.
More M&As to come as capital is more scarce: The number of venture-backed companies that were acquired or merged with another company increased by 20% in Q1 compared to Q4 2022, with 57% of those M&A deals valued at $10 million or less.
Q1 saw a significant increase in the frequency of VCs receiving both participating preferred stock and attractive liquidation preferences in their startup investments, a sign that the market is continuing to grow more investor-friendly.
The median Series B pre-money valuation was up nearly 10% in Q1, while the median Series C was up 21%. Both of those are the largest quarterly increases at their respective stages since Q4 2021. After several straight quarters of declines, these upticks are still a very good sign…
SELECTED NEWS FROM THE WEEK
These were all from my Twitter updates! I am sure I missed a lot of stuff as I was participating in several events during the week.
I wanted to take the opportunity to congratulate the Itau BBA Team who put together during this past week its 16th CEO Conference in New York focused on listed equities. 130 companies participated, with the vast majority being represented by its CEOs along with 500+ investors!
Monday, May 8
At Brazilian Bionexo, it's time to capture synergies after seven M&As. Rafael Barbosa, CEO of Bionexo, says that the focus now is to capture synergies from the seven acquisitions. He also details the company's plan to invest BRL 60 million in R&D in 2023.
*** Third Annual Itau BBA Tech Summit ***
Tuesday, May 9
*** Start of Itau BBA CEO Conference *** / *** Itau BBA Women Leaders in NY with Ingrid Silva***
Wednesday, May 10
LightHouse, an investment VC firm focused on seed rounds, has launched a fund of BRL 100 million to support startups over the next five years.
High-tech bakery creates carb-free bread and receives million-dollar investment. Hero Bread, which subverts traditional flour by creating a low-carbohydrate formula, has received a US$ 15 million investment.
Google is expected to announce a more conversational version of its flagship search engine, fueled by artificial intelligence.
***Itau BBA CEO Conference ***
Thursday, May 11
Shein, in an effort to get closer to Brazilian sellers, has just announced a partnership with Bling, from Locaweb, to integrate the ERP into its online sales platform. This is the first partnership the Singapore company has made with a Brazilian player.
*** End of Itau BBA CEO Conference with Andre Agassi ***
Friday, May 12
Linda Yaccarino: Twitter’s next CEO is a well-connected media executive whose deep ties to Madison Avenue could help lure advertisers back to the platform at a critical time.