LatAm Weekly Tech Update
#39 - Seed vs. Late Stage funding numbers, Brazil Web Summit, Deals of the week... and much more!
Happy Sunday!
More readings this week on the general slowdown in tech investments and late stage valuations. Crunchbase released that global venture funding totaled USD 47 billion in April 2022—the lowest amount invested in private companies in the past 12 months. OK – no overreaction here, the dip isn’t MASSIVE, but it does signal that the slowdown we saw in the first quarter of this year is the start of a longer-term shift in funding, particularly at late stage, even more so with the recent increase in interest rates by the Fed. The opportunity cost of investing in tech has risen – and thus investors are more skeptical and selective.
It is interesting though when we look at the funding by stage, some more nuanced trends emerge:
• Seed stage companies raised USD 3 billion in April 2022. Seed funding fell month over month, but still grew year over year by 14%;
• Early stage funding was the lowest it’s been in 12 months, at USD14.3 billion. This stage of funding fell month over month, and was flat year over year compared to April 2021;
• Late stage funding, which tends to fluctuate more than any other stage, was flat month over month, but down by 19%year over year.
One trend that’s clear: the largest decline by stage, year over year, is taking place at late stage funding. New unicorn counts also fell year over year, with 34 new unicorns minted last month. That’s down from 51 created in April 2021.
There are some industries that continue to draw robust venture investor interest – raising more than what was seen in 2021 – highlightinclude blockchain, supply chain management, renewable energy, marketing tech, and gaming.
As I mentioned next week, layoffs continue to occur in the tech space in Brazil. In the US, it is not different: First was Robinhood, announcing it would layoff 9% of its full-time employees. Then Netflix, cutting (but not shutting down!) much of its newly formed in-house publication, Tudum. Then came Thrasio, Cameo, On Deck and MainStreet.
Why now? I think it has something to do with what I mentioned above (and have been mentioning in the past weeks)….
Still on the same topic, if you are Portuguese-speaking, I recommend the article by Eduardo Vasconcellos, from Valor Capital Group. He calls it “The New Normal” and provides a deep view focused on Brazil’s idiosyncratic reasons for a “greater hit” when compared worldwide (such as the country’s elections, the exit of key executives from Softbank LatAm Fund, and the hike in our local interest rates SELIC).
This week I am writing from New York. Tomorrow Itau BBA will hold a Tech Forum at the New York Stock Exchange. The objective is to share knowledge to Brazilian investors and executives on the American tech landscape – with key companies that are setting an example worldwide such as Snowflake and Chubb. We will also have a Web 3.0 and Crypto conversation between Hashdex and Paulo Passoni – apart from other very insightful panels. Look out because next week the edition will be special as I will share with you all of the insights I learned.
Itau BBA is also holding its 15th annual conference in New York this week with over 150 companies– and I will also be meeting with many key venture capital funds while I am here. Everything I hear and find worth sharing will be on next week’s special edition as well.
Finally, I am also attending the Brazil @ Silicon Valley Conference and I am VERY excited! I know many of my readers will be there – feel free to reply here if you will be there too so we can meet up.
As for the new Jobs Section – I got a lot of positive feedback and new positions to highlight. Be sure to take a look below.
Now – let’s go ahead to the week’s news… Please bear in mind that these are strictly my opinion, based on my background and personal interests. Feel free to share this newsletter with anyone who might be interested – to subscribe, just click on the link below!
Solinftec, Brazilian agritech specialized in tropical digital agriculture providing farmers with real-time and online decision support tools raised a USD 60mm growth equity round with TPG Alternative & Renewable Technologies, The Lightsmith Group, Unbox Capital and other undisclosed investors.
Xepelin, Chilean digital financial platform created for small and medium-sized enterprises (SMEs) to grow, raised a USD 111 Series B round with investors such as Kaszek, Paypal Ventures and Battery Ventures.
Brazilian banks started to structure areas dedicated to Open Banking in 2020 – but this year, the demand for employees focused on the theme hiked 38% as Open Banking becomes a reality in the country. Itau Unibanco, for example, has 600 people dedicated to the theme.
The Brazilian Comissão de Valores Mobiliários updated their rules related to equity crowdfunding: it tripled the limit for every offer, going from BRL 5mm to BRL 15mm. With the change, the top range of gross revenue goes to BRL 80mm – 4x what it was before. Last year, this type of investment was of BRL 188mm, double the size of 2020. The lead platform was Captable, followed by SMU and Eqseed.
Do you know that the Sun also has its own holiday? Yes, it is on May 3rd that the whole world annually celebrates the Sun Day! If you know me, you know I am a sun addict (HELIOPHILIA) and a yellow lover. I had to mention this today 😊
B4A, Brazilian beauty-tech company operating digital ecosystems around beauty, allowing consumers and influencers to connect and interact with beauty brands raised USD 6 mm in a Series A round with AcNext Capital and DXA Investments.
Henry, Argentinian startup that provides access to software development education ata $0 initial cost model raised USD 10mm in a Series A round with funds such as Accion Venture Lab and Kayyak Ventures.
YoCripto, Mexican digital platform that offers a credit card with Bitcoin rewards of up to 3% on every purchase raised a USD 4mm Seed VC round with DILA Capital.
The Brazilian operation of e-commerce Shoppee was granted the authorization by the Brazilian Central Bank to become a payment institution – thus being able to have a simple bank account and provide certain financial services. Interesting move for a company that has 45.8mm users worldwide.
Rio de Janeiro is the chosen city to host the 2023 Brazil Web Summit. The event, which takes place on a yearly basis in Portugal for around 70.000 people, will occure from May 1-4 of next year.
Star Wars Day
May the Fourth be with you!
Fintechs that target lower income classes will be able to offer cheaper loans in which the borrower can offer items such as a mobile phone or a computer can be used as a collateral.
The Brazilian market for e-games continues hot. Therefore, the startup G4B was created to be the link between large companies in the sector. According to founder Marcela Miranda, who created the fintech Trigg, in 2010, many companies want to invest in the segment, but do not know where to start. Thus, G4B wants to be a facilitator of this process, promoting digital content and increasing the visibility of electronic games in the country.
Fitbank, Brazilian neo bank, announced its first acquisition – Easy Credito. This is an important milestone for Fitbank, as Easy Credito bridges the gap between more than 60 companies and 36 financial institutions. At one end there are names like Méliuz and OLX. On the other, partners such as Santander, Itaú Unibanco, BV, Creditas and SuperSim. With this customer base, EasyCrédito already accounts for more than 20 million credit requests.
After a series of layoffs, Quinto Andar announces the hiring of Larissa Fontaine, former Google, as Chief Product Officer and Frederico Sant’anna, former Redpoint Eventures director as Vice President for Solutions focused on brokers registered in the platforms.
Paketá, a payroll lending fintech that recently raised a round with Kinea Ventures, announced it will now start allowing employees to access their earned wages ahead of their pay day, in addition to FGTS backed credit.
What am I reading?
Warren Buffett’s Annual Letters To Shareholders- Dive into 28 key lessons from Buffett in CB Insights report
Neofeed: Edson Rigonatti’s advices to entrepreneurs given the tough times (Portuguese speakers only)
Itau BBA: Question book on the Consumer for the upcoming CEO Conference
What did I listen/watch?
JOB POSTS - NEW SECTION!!!
Here is what top tech companies are looking for…
VP of People - Pipefy
Content Analyst- Education Journey
Head of Sales - Marvin
FP&A - Conexa Saúde
Corp Dev/ Head of M&A - Arquivei
Head of Branding - Beep
*respond to this newsletter if you want to post a job or if you have interest on the openings above*
Quote of the week:
“What you don’t want to believe in is luck. You want to believe in odds.” —Charlie Munger
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