Happy Sunday!
CB insights released this week its State of Payments report for the year of 2021. Shocking – but somehow expected - to see the magnitude of growth in LatAm. The region showed a 156% YoY increase in funding for payments companies, reaching USD2.3bn (surpassing de USD 2bn mark for the first time). As for number of deals, there was also a record high of 49, a 109% growth YoY.
Brazil was a major highlight, as it drove the funding in LatAm, specifically in mid to late stage fund rounds. The top 3 equity deals were all Brazilians:
1. Pismo – USD 108mm in a Series B round with investors such as Softbank and Accel
2. Hash – USD 40mm in a Series C round with investors such as QED and Kaszek
3. Truepay – USD 32mm in a Series A led by Addition
From a global perspective, USD 32.7 bn was invested in payments startups, with a median deal size of USD120m. Tiger Global was the the top investor in the payments sector.
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!
Crypto: Brazil’s Congress is currently looking at the theme as cryptocurrencies popularity increases in the country. There is a law proposal to be approved in the Senate and further discussions on new laws. Despite the advances, there are some points that are generating uncertainty in the market. One of the main fears are related to international crypto entities – while it is included in the law that Brazilian startups need to present their balance information to the Receita Federal, it is not clear if this will apply to the offshore startups as well.
The BRZ, stablecoin pegged to the Brazilian Real, had a record volume of BRL 5.7bn in 2021.
The Zarzur family, owner of one of the main Real Estate companies in Brazil, EzTech, invested in the multifamily office Oikos, which has the objective of combining the traditional world with the startup world through venture capital investing. The family now holds a minority participation at the asset manager as it increases its AUM to BRL 5.5bn.
My take: As the Brazilian technology ecosystem evolves, traditional families are increasingly diversifying their investments to include the new venture asset class – trend that is expected only to grow despite macro uncertainties in the region.
The acceptance of PIX as a payment method in online stores and marketplaces reached a peak in January: 64.4% of websites already accept PIX. The debit card appears to be the main mean of payment affected by the PIX dynamic – as it is currently accepted only by 30.5% of the websites – a 8% decline when compared to January 2021.
Mozper, Mexican fintech, is starting its operations in Brazil. The company is a platform focused on financial education for children and teenagers. It has a debit card and app designed for kids and parents aiming to teach kids good financial habits in aneasy and fun way.
Proptech Vobi raises BRL 7 million in a seed round led by Y combinator. Vobi is a SaaS business management platform for small construction businesses, like home remodeling companies, contractors, architects, and interior designers. It helps them better manage their projects by eliminating administrative and manual tasks so they can focus on what they do best.
My take: Interesting example of a vertical SaaS that aims to resolve a real pain for Brazilians as it comes to construction. With the open banking background, we should expect to see Vobi monetizing through financial products as well.
Meta names Guilherme Horn as Whatsapp Brazil Head of Operations. He is the first Brazilian director of the company.
Uber Motorcycle expands its operations to 38 new cities in Brazil. The ride is cheaper than UberX and has the objective of focusing on short distance rides.
Mandi Ventures, venture capital focused on agtechs founded by Antonio Moreira Salles and Julio Benetti, have conducted three investments since the inception of the fund. The most recent being Les Miraculeux, french foodtech that manufactures vitamins and food supplements in the form of fruity gummies. The fund also invested in Farmers Business Network, world’s most valuable agtech.
Adyen registered a net revenue of € 1 billion in 2021 – an increase of 46% YoY. Focusing on LatAm, the net revenue was of € 74,6 million – representing a 24% increase when compared to last year.
My take: It’s no news that the pandemic significantly accelerated online payments in the region. It is important to note that Adyen only operates in Brazil and Mexico. Safe to say that if other LatAm countries were included, the increase would be even bigger.
Velvet, a platform for buying and selling late-stage venture capital stock options, has just raised USD 200 million from previous investors interested in getting the startup rolling. It is not an equity round but discretionary funding aimed at the startup‘s first acquisitions of its initial portfolio. In January, USD 30 mm has already been used to acquire shares from former employees of Nuvemshop, the Latin American e-commerce unicorn, CrediJüsto, the largest lending fintech in Mexico, and Open, one of India’s largest neobanks. The company will start with a B2B2C model, offering the platform to digital banks, managers, and family offices via API, but it wants to go well beyond that.
Kenoby, the recruitment and digital selection company was acquired by Gupy. The terms of the transaction were not disclosed.
My take: I highlighted last week Gupy’s most recent funding. The acquisition comes in time to consolidate Gupy as the main HRTech in the region.
According to a recent survey by Abecs (Brazilian association of credit card companies) the total transactional volume of cards (credit, debit and prepaid) reached a record of BRL 2.65 trillion in 2021, representing a YoY increase of 33.1%. Of the total, BRL 1.6 trillion came from credit cards, a 36.6% increase when compared to last year. According to Abecs, 1 out of 4 credit card transactions are contactless – and this figure is expected to increase this year. The hike in credit card online purchases was of 41.7%, to BRL 550bn. On the other hand, online debit transactions fell 69.3%, to BRL 13.5bn
My take: The survey shows the clear trend of PIX adoption in the online world. While credit card transactions continue to increase, debit online transactions decreased as users replace debit by Pix. This trend should continue this year.
What am I reading?
Itau BBA PIX Day 4: The Road Ahead
Interesting insights on the new Pix Garantido from industry experts.
The Algebra of Decisions – Scott Galloway
I am a true fan of Scott Galloway - this one is a must read.
Amago Investor Letter – The invisible hand part II (for Portuguese speakers only)
Amago is a Brazilian public equities manager - and also are experts in everything related to China. This letter is the second part of the analysis of the country from several important perspectives - and its impact in Brazil and in the world.
What did I listen/watch?
Quote of the week:
Asking for someone’s advice is an expression of trust — that’s why it’s intimidating. Trust builds trust and deepens relationships. Seek counsel, and your mentor will be invested in your success.” Scott Galloway
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