Happy Sunday!
In the past week, there was a special edition on Brazilian Unicorns in a local newspaper based on a recent study published by Distrito.
Since 2018, 23 startups reached this status in Brazil – and (as mentioned here before) in 2021 there was a record of 9 companies entering the list fueled by the USD 9.4bn invested in the region in more than 770 transactions. For 2022, Distrito points out 22 names that are likely to reach the USD 1bn valuation – 12 being completely new to this list (probably due to their exponential growth in 2021). Again, fintech is the most relevant sector within the list.
The expected “unicorns to be’: a55 (fintech); Alice (healthtech); Buser (mobility); Cora (fintech); Contabilizei (SaaS); Conta Azul (SaaS); Cortex (SaaS); Descomplica (edtech); Fazenda Futuro (foodtech); Isaac (edtech); Kovi (mobility); LivUp (foodtech); Omie (SaaS); Open Co (fintech); Petlove (ecommerce); Solinftec (agtech); Shopper (retailtech); Tembici (mobility); Zoop (fintech); Warren (fintech)
**I’ve eliminated Neon from the list as it became a unicorn this week. Congrats by the way Pedro & Team.
As we all know – private markets are booming. Unfortunately, we can’t same the same about public markets… on that note I read an interesting article by Crunchbase this week that focuses on the secondary markets as IPOs are being postponed due to market conditions, and therefore companies are becoming private for longer. Even though the article refers to the U.S., we are seeing this in LatAm – so it is worth noting.
As companies continue private, employees that have stock options are seeking liquidity. That is, a place where employees and investors can buy and sell their shares. As IPOs are on pause, companies like EquityZen and Carta gain momentum in the US. Last week I mentioned Velvet in the newsletter, which has a similar model focused on emerging markets such as LatAm. In my view – this is a gigantic opportunity. Even if IPOs resume, it is still an interesting HR benefit for future startup hires as (some) need to opt out of the corporate world – isn’t talent attraction one of the biggest challenges?
P.S. – I am doing a quick research on who is attending the SXSW event this year in March! I will be there – and would love to catch up with all of you for a coffee (or beer) – reply to this email if you are attending and interested in meeting up 😊
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!
KPTL and Bossanova, Brazilian VCs, joined efforts in an unprecedented move of launching a BRL 150mm offer in a structure similar to that of an IPO in the Brazilian stock market, in order to raise funds for the investments in 45 startups. This marks the first public offer of a venture capital in the country.
MasterBarter agfintech launches the “DocuSign” of the country side. Essentially, it uses a system of contracts using blockchain based on farmers’ future production to grant a digital account and credit card to the farmer. The producer can easily exchange its production for money through the app. In one year of operation, the company validated its thesis with 10 clients and now the idea is to grow exponentially to 5.000 farms and a TPV of BRL 400mm.
Volpe, Brazilian VC founded by former Softbank André Maciel, raises USD 102mm in its first fund. The average ticket size of its ranges from of USD5mm-USD10mm – and the fund wants to have 15 companies in its portfolio. It has already invested in Caju, SaltPay, Seedz, UOL Edtech, VTEX, CRM&Bonus and Atlas Governance.
Neon Pagamentos, Brazilian fintech with the goal of uniting technology and design to simplify users’ financial experience, raises BRL 1.6bn in a Series D Led by BBVA and becomes the country’s new unicorn. The company launched with a simple digital account and has since expanded its product suite to include investment products, credit cards, and personal loans, serving both consumer and business clients. To date, Neon has raised BRL 3.7bn with well known investors since its inception in 2016. Use of proceeds will be focused in technology, marketing and new products. The bank tripled in size in 2021 – reaching the mark of 15 million clients, 88% belonging to classes C, D and E.
The fight between Brazil’s Electoral Court and the app Telegram is far from over: the president of the regulatory body announced in a interview for a local newspaper that they are currently deciding on whether they will completely block the app in the country. 53% of Brazilian smartphones have Telegram installed – and since the company is based out of Dubai with no legal entity here, there is no way to reinforce local laws (as done with Facebook, WhatsApp and TikTok in the 2020 elections).
Mercado Pago is the first company with the Payment Initiator License to become operational in Brazil. This license was created in the third phase of country’s open banking process – and allows companies to initiate a payment transaction with a third party without needing to change the app. Even though other companies already have the license, Mercado Pago was the first one to operate it. Now, if you want to transfer funds from another bank account to your wallet – you do not need to leave the app – exciting times are coming!!!
Shopee announced it has already 1mm sellers registered in their platform, representing a 600% increase last year. With this milestone, 85% of the sales done in the platform are currently from locals.
Recent study shows that Banks and digital wallets had a total of 22.488 million downloads in Brazil in January. The most downloaded apps were: i) Nubank; ii)Bitz iii) Picpay
Cloud9 Capital, new Brazilian VC Fund founded by former Softbank investors, just raised BRL 280mm to invest in companies “off grid” that have founders as good executors. By “off grid”, they will focus on companies that generate cash and are not necessarily VC backed – mostly from other regions (apart from Rio de Janeiro and São Pualo). The objective is to reach the BRL 400mm mark with check sizes of BRL 20mm.
PayHop, technological platform in Brazil that unites suppliers and retailers to guarantee payments in their commercial transactions, raised USD 2.2mm in a seed VC round with Domo Invest, Serasa Experian and Citrino Gestão.
Warburg Pincus invests BRL 530mm in Sólides, HRtech that develops a behavioral people management software that increases employee productivity and reduces turnover costs focused in SMBs. To date, it is the fund’s biggest investment in Brazil and also the largest investment ever made in HRTechs within the Brazilian tech ecosystem.
CloudWalk, owner of the InfinitePay POS, wants to make available the Pix option free of charge to customers by the end of March. SMBs will be able to accept transactions via instant payment both in the app and in the machine. This is yet another growth bet by the company, which projects an increase of 120% to 200% in its transacted volume this year and has the ambitious goal of being a leader in the acquiring market in the next two years.
According to CloudWalk CEO Luis Silva, the Pix exemption for merchants will be unlimited and permanent.
What am I reading?
What did I listen/watch?
The Tech Friday is back! Watch the video of the interview with Provu, Brazilian BNPL startup here - and also previous episodes with companies such as Loggi and EmCasa and funds such as Canary and Volpe.
Inventing Anna - Netflix Series - worth the watch in a world where social media and appearances are (unfortunately) mattering more than they should (or even at all…)
Quote of the week:
“The measure of intelligence is the ability to change.” Albert Einstein
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