1H 2023 VC Trends in Latin America

LAVCA Week 2023

Registration is open for LAVCA Week 2023 taking place 10-13 October at the Conrad New York Downtown in New York City. 

Program Updates

• Fireside Chat with Francisco Alvarez-Demalde (Riverwood Capital) and Marcelo Claure (Claure Group)
  
  
• AI and IoT in Latin America: Complements or Replacements To The Current Tech Stack?  with Carlos Kokron (Qualcomm Ventures), Patrick Arippol (Alexia Ventures), Jimena Pardo (ALLVP) and Karim Pichara (NotCo).
  
  
• What Global Shifts are Driving Opportunity in Latin America Today?with Gina Sanchez (LACERA), Luis Cervantes (General Atlantic) and Henrique Muramoto (Warburg Pincus).

Participation is open to LAVCA Members, qualified institutional investors and non-member private capital investors, subject to approval.

LAVCA Membershave access to special early bird rates through 31 August 2023. For inquiries, please contact lavcaweek@lavca.org.

New LAVCA Members

LAVCA welcomes new members Cloud9 Capital and 30N Ventures into our investor community.

Cloud9 Capital

Cloud9 Capital is a USD75M fund focused on bridging the gap for off-VC-track tech companies through a growth equity approach. The fund is a late-stage company builder, partnering with execution-first founders in their next phase of growth.

• Investment Focus | USD4m in ARR (Series A / B equivalent); mostly invest in bootstrapped companies
• Preferred Geos | Brazil
• Year Founded | 2021
• Company Portfolio Includes | Clinicorp, Cilia and Onfly
• Key Contacts | Felipe Affonso (Partner) and Noah Stern (Partner)

30N Ventures

30N Ventures partners and supports top-notch founders in fintech, foodtech, and retail across the fastest-growing economies in emerging markets.

• Investment Focus | Late seed and Series A
• Preferred Geos | Fund I is focused in Latin America-focused and opportunistic in Southeast Asia and Africa
• Year Founded | 2023
• Current Portfolio Includes | Foodology
• Key Contacts | Salvador Said (Managing Partner), Tomas Denecken (Managing Partner), Daniel Kranzler (Senior Partner) and Maria Sol Bertlshofer (Principal)

Exits and M&As

▸ EXIT | Movile exited a55, a Brazilian revenue-based lender and payment integration platform focused on SMEs in Brazil and Mexico, through a sale to AstroPay, a UK-based platform for international payments. 

• a55 launched operations in Mexico last year. 
• Movile led a ~USD16.3m Series B in January 2022. 

▸ M&A | Israel-based fintech Rapyd acquired PayU GPO, Prosus’ payment solutions provider for corporates and SMEs in global markets, for USD610m, to expand its operations in Latin America and Central & Eastern Europe.

• The merger excludes PayU GPO’s operations in India, Turkey and Southeast Asia. 
• Rapyd is preparing for an IPO. 
• General Catalyst and Stripe led a USD40m Series B for Rapyd in 2019, with participation from IGNIA Partners. 

▸ M&A | Albo, a Mexican challenger bank, acquired delt.ai, a Mexico-based financial services platform for SMEs.

• Albo raised a USD45m Series B in November 2020; Mountain Nazca led a USD7.4m Series A in January 2019. Magma Partners invested in the seed round in 2018. 

▸ M&A | Grupo Central, a Chilean dark kitchen operator, acquired Ditucí, a Chilean last-mile delivery and fulfillment platform for e-commerce businesses. 

• GFC,  Moonvalley Capital and Opera Ventures invested in Grupo Central in 2022. 

▸ M&A | Saludtools, a Colombian back office management platform for hospitals, acquired Netmedik, a Colombian schedule and invoice management platform for clinics. 

• Latitud and Verge Capital invested in Saludtools in September 2021. 

▸ M&A | Brazilian credit bureau Serasa Experian acquired Mova, a Brazilian credit platform for SMEs.

▸ M&A | Chilean healthtech Medismart merged with telemedicine platform TeleDoc.

• Medismart raised USD6m from Benslie International and Sunrick in April 2022. 

Startups

▸ EDTECH | General Atlantic and Dragoneer took private Arco Educação, a Brazilian learning systems provider.

• Arco Educação listed on the NASDAQ in 2018. 

▸ Pomelo, an Argentine payments infrastructure platform for fintechs issuing prepaid cards and credit cards, launched operations in Chile. 

• Pomelo was just approved by the Brazilian Central Bank as a certified payment institution. 
• Pomelo raised a USD15m round from monashees, Index Ventures, SciFi and Section 32 in September 2022, and a USD35m Series A led by Tiger Global in November 2021.

▸ CLEANTECH | French insurer AXA announced a partnership with Mombak, a Brazilian decarbonization startup, to invest USD49m in reforestation projects across Brazil.

▸ HRTECH | Brazilian recruiting platform Gupy downsized its operations and announced an ongoing restructuring. 

• Gupy just acquired Pulses, a Brazilian employee engagement platform.
• Guppy raised a ~USD93m round led by Riverwood Capital and SoftBank in February 2022 in what was the largest known investment in an HRtech startup in Latin America at the time.

▸ PROPTECH | Casai, a Mexican short-term rental platform, shut down operations in Mexico and Brazil and sold its rental portfolio to real estate operators Blueground, Charlie, Wynwood House, CAPITALIA and Oasis Collections.

• Casai raised a USD48m Series A led by Andreessen Horowitz in 2020. 

CEO Nico Barawid reflects on his learnings throughout the journey:

“…at our height, we were booking almost US$30mm in annualized revenue. Our team designed and operated about 50 buildings with 1.6k live units and a signed pipeline of another 2k more, spread across business centers and leisure destinations in Mexico and Brazil. By unit count, this made us one of the largest short-term rental operators globally, not just in the region. …The cold truth was we were up against an investment drought with a model no longer favored by VC investors to produce venture returns."

Deals

▸ DEBT | Klar, a Mexican personal finance management and lending platform, secured a USD100m credit line from Victory Park Capital. 

• Klar acquired Sefia, a Mexican SOFIPO,  to include consumer savings accounts within its product offerings in April 2023. 
• General Atlantic led a USD70m round in June 2022. 

▸ DEBT | ADQ, a UAE-based USD110b sovereign wealth fund, provided USD100m in convertible debt to Brazilian proptech Loft. 

• The investment comes after Loft underwent a series of restructurings earlier this year. 
• Loft acquired TrueHome and CredPago in April 2022 and raised a USD100m Series D+ led by Billie Gifford in April 2021. 

▸ General Catalyst led a USD45m Series B for Tractian, a Brazilian industrial equipment maintenance management platform, with follow-on from Next47, DGF Investimentos and Norte Ventures.

• Citrino, the manager of the CVC arms of TOTVS and Banco Votorantim, sold a ~USD10m stake in Tractian to monashees through a secondary transaction as part of the deal. 
• Next47 and YC led a USD15m Series A for Tractian in May 2022; DGF Investimentos led a ~USD3.4m round in June 2021. 

▸ CLEANTECH | Danish SDG Investment Fund led a USD31.5m Series C for Bright, a Mexico-based solar energy startup.

• Bright closed a growth equity round from MGM Innova in November 2022 and raised a USD4m seed round in August 2015. 

▸ AGGREGATORS | NAZCA and IDB Invest led a USD15.5m Series A for Wonder Brands, a Mexico- and Argentina-based e-commerce aggregator looking to acquire independent brands selling in platforms such as Amazon and Mercado Libre, with participation from CoVenture, SilverCircle, Korify Capital, Infinitas Capital and GBM Mexico

• ALLVP and NAZCA led a USD20m seed round in April 2021.
• Wonder Brands was co-founded by Groupon alum Federico Malek.

▸ Educbank, a Brazilian financial education platform,raisedUSD14.2m in venture debt from Itaú BBA.

▸ SECURITY | Igah Ventures led an undisclosed Series B for Axur, a Brazilian cybersecurity startup.

• DGF Investimentos led an undisclosed Series A in 2019. 

▸ DEBT | Bancolombia provided a USD12m credit facility to Avista, a Colombian credit placement platform.

• Avista secured a USD22.5m debt facility from Accial Capital in March; Avista secured a USD20m credit line from Accial in May 2021 and a USD75m credit line from undisclosed investors in 2020.

▸ Asaas, a Brazilian payment management platform, raised ~USD10m through a FIDC (Fundo de Investimentos em Direitos Creditorios) from Itaú BBA. 

• Asaas raised a ~USD30m Series B+ in June; Inovabra led a ~USD7.5m round in October 2020. 

▸ WOMEN-LED | Vetalia, a Mexico-based veterinary services startup, raised a USD10m round from Lukas Keindl (BondVet), Andrea Viejo (Laika Mexico), Terry Gutierrez (Rappi Mexico), Sujay Tyle (Merama) and the Gutiérrez Muguerza family office.

•  Vetalia was co-founded by María Gutiérrez and Marion Benítez Landa.

▸ AGTECH | GrainCorp and GrainInnovate led a USD6m Series A for ZoomAgri, an Argentine quality analysis platform for agricultural commodities, with follow-on from SP Ventures and Artesian.

• ZoomAgri raised a USD3.3m round from SP Ventures, Glocal, Artesian and GrainInnovate in August 2021. 

▸ SRM Ventures invested ~USD4m in Cashbanx, a Brazilian B2B cashback platform.

▸ HEALTHTECH | Headline led a ~USD3.5m round for Fiibo, a Brazilian employee health benefits management platform, with participation from Vox Capital. 

▸ HRTECH | Bradesco invested ~USD3.5m in Exato Digital, a Brazilian background check platform. 

▸ Brick & Mortar Ventures and Accion Venture Lab led a USD3.4m seed round for Licify, a Colombia-based procurement and financial software startup for the construction industry, with participation from Dash Fund, G2 Momentum Capital, and Columbia University’s VC fund.

▸ MSW Capital invested ~USD2m in Speedbird Aero, a Brazilian drone delivery service.

▸ LEGALTECH | Tuesday Capital led a USD1.65m seed round for ConfiAbogado, a Mexican automated legal services company, with participation from DTB Capital, Seedstars International Ventures, 500 Global, Invariantes, Goodwater, GAIN Capital and Side Door Ventures.

▸ HRTECH | Canary led a~USD1.6m pre-seed round for Apprenty, a Brazilian technical training platform for young professionals, with participation from Positive Ventures, Latitud, Potencia Ventures and undisclosed angels. 

▸ Zhana Solutions, a Colombian industrial waste management startup, raised a USD1.2m round from the Alphamundi Fund, the Action Fund, the EAN University Impact Fund and the Asiri Fund.

• Angels participating included Felipe Zárate (CrediCorp), Jorge Bermúdez (Más Gallo Media), Peter Rabley (PLACE) and Tim Radjy (AlphaMundi). 

▸ Entre Investimentos invested ~USD1m in Linked Gourmet, a Brazilian restaurant management platform. 

▸ HEALTHTECH | Inklo, a Brazilian health services credit provider, raised a ~USD700k pre-seed round from undisclosed investors. 

▸ CVC |Wayra invested ~USD400k in Tachyonix, an Israel-based SAP applications provider.

• Tachyonix is led by Brazilian CEO Marcelo Korn.

▸ CLEANTECH | Enermatch, a Brazilian clean energy management platform, raised a  ~USD400k pre-seed round from SdP Capital, the CVC arm of Sai do Papel, and undisclosed angels. 

▸ URUGUAY | IC Ventures invested inUSD350k seed round for Adman, an Uruguay-based marketing automation platform.

▸ Fundo Vale invested ~USD270k in Radix Investimentos Florestais, a Brazilian sustainable forestry startup. 

▸Amazon’s Impact Accelerator for Latino founders invested USD250k in Kigüi, a Mexican food waste management software. 

▸ CVC | Google’s Latino Founders Fund invested USD150k in DataScope, a Chilean mobile data collection software. 

▸ HiPartners invested in Aravita, a Brazilian computer vision-powered inventory management platform for supermarkets. 

• Qualcomm Ventures and 17Sigma led a USD2.5m round for Aravita in March.

▸ FOODTECH | Big Idea Ventures’  New Protein Fund II invested in Future Cow, a Brazilian alternative milk startup, and Naturannova, a Chilean AI-based alternative protein startup.

▸ Minga Ventures and NuMundo Ventures invested in Neat Pagos, a Chilean payment platform.

▸ ANGEL | BondUp, a Chilean social network for seniors, raised USD180k from undisclosed angels.

Funds

▸ Ribbit Capital reached a USD800m final close for its tenth flagship fund to invest in fintech startups globally.

• Ribbit’s recent investments in Latin America include Stark Bank, Gorila, Justos and Kavak.

▸ CLEANTECH | Coca-Cola launched a USD138m VC fund alongside eight of its global bottling companies to invest in sustainability-focused startups.

• Graycroft will manage the fund; Arca Continental, the parent company of LAVCA member AC Ventures, participated. 

▸ FOODTECH | US-based VC Supply Change Capital reached a USD40m final close for its first flagship fund to invest in early-stage startups developing solutions within the food industry. 

• Supply Change’s LPs include JP Morgan, Bank of America, Illumen Capital and MassMutual.
• Supply Change led a USD6.4m seed round for Michroma, an Argentina-based developer of fungi-derived food colorants in February.

▸ WOMEN-LED | Positivo, a Brazilian electric device manufacturer, made a ~USD720k commitment to WE Ventures, Microsoft’s fund investing in early-stage women-led startups in Brazil.

• WE Ventures portfolio includes Smarkets, Mobees and PackID.

▸ PROPTECH | IRSA, an Argentine real estate developer, launched SHEFA, a USD100m CVC fund to invest in early-stage retail and proptech startups globally. 

• SHEFA will be led by IRSA board member Ben Eslztain. 

▸ Delta Accelerator launched a USD10m fund to invest in tech startups across Central America.

News

▸ Uruguay-based payments platform dLocal is exploring a potential sale of the company, according to Bloomberg.

• dLocal just appointed Pedro Arnt, former Mercado Libre CFO, as Co-CEO alongside Sebastian Kanovich. 
• dLocal raised USD618m in its IPO on the NASDAQ in July 2021 at a reported USD6.1b valuation; Alkeon Capital and General Atlantic led private rounds previously.

▸ STREAMING | Mercado Libre launched Mercado Play, a free streaming platform. 

• Mercado Play will offer a wide range of content, from movies and documentaries to original productions and online courses.

▸ Amazon partnered with Bradesco to launch its first credit card offering in Latin America. 

▸ CRYPTO | PayPal launched its own USD-backed stablecoin. 

• The cryptocurrency is built in Ethereum and will be issued by Paxos, a crypto platform also powering Mercado Pago in Brazil. 
• PayPal Venture’s recent investments in Latin America include nocnoc, Xepelin and Neon Pagamentos.

▸ AI | Rest of World reviews some of the challenges faced by VC-backed startups in integrating AI into their core business models in Latin American startups embrace OpenAI, but at what cost?

Andrea Campos of Yana: “I’ll probably depend on a third-party AI service forever, whether it’s OpenAI or Google… I’ll have to charge for doing so though; if I provide it for free, the costs would eat up my business.”

People & Programs

▸ Congrats to Paulo Passoni for joining Valor Capital Group as its newest Managing Partner focused on growth equity investments.

• Paulo will be discussing key trends in growth capital in the upcoming virtual session on VC/Tech Mid-Year Trends for Latin America on 29 August at 11 am ET. Registration is now open. 

▸ Congrats to Victor Lazarte, former CEO of Brazilian gaming company Wildlife Studios, for joining Benchmark as General Partner. 

• Victor stepped down from his role at Wildlife and was appointed Chairman of the board. 

▸ Huawei Cloud launched Spark Accelerator, a Chile-based accelerator program focused on startups operating in Chile, Mexico, Colombia and Peru that use public cloud infrastructure technology. Register by 31 August. 

▸ AWS will host AWS Summit Mexico City, an in-person cloud-focused networking event for startups and investors, on 30 August. Registration is now open. 

▸ Finnovista will host FINNOSUMMIT 2023 on 26-27 Septemberin Mexico City. Registration is now open.

Global Tech

▸ Sign up for GPCA’s Global Tech Brief, bi-weekly newsletter that covers tech activity in Asia, Latin America, Africa, CEE and the Middle East. 

LAVCA is now part of GPCA, the Global Private Capital Association, and will continue to operate as a parallel membership organization with its own dedicated team and board.