ON THE MOVE

A special thanks to all the VCs who met us in person the last couple of weeks at LAVCA programs:

Our inaugural VC in NY program welcomed fifteen LatAm fund managers, including LAVCA members from Astella Investimentos, Aurus, Capital Invent, Cygnus, Equitas Capital, Jaguar Ventures, LIV Capital, NXTP Labs, Polymath Ventures, Promotora, RutaN, and Variv Capital, to engage one-on-one with players in New York’s venture ecosystem.

And last week we met with fund managers at Google’s headquarters in São Paulo for our bi-annual Brazil Venture Investors Peer Exchange. This edition welcomed special guests Roy Glasberg, Global Lead of Google’s Launchpad programs, and Ronaldo Lemos, Director of the Instituto de Tecnologia e Sociedade do Rio de Janeiro (ITS-RIO) and one of the creators of Marco Civil da Internet, for a timely session about Brazil’s latest WhatsApp blackout. Discussion leaders included Monashees Capital, Valor Capital, Qualcomm Ventures, KaszeK Ventures, Redpoint e.Ventures, and e.Bricks Ventures. The next edition will be held in Q4 2016.

HEADLINES

Brazil made international headlines (NYTimes, Washington Post, BBC, CNN, TechCrunch, etc.) for suspending WhatsApp, a service used by pretty much every Brazilian with internet access, for the second time in six months. Once again, a Brazilian judge wants access to data for a criminal investigation, which WhatsApp has denied (the service rolled out end-to-end encryption on March 31).

Brazilians represent about 10% of the service’s global userbase of 900,000. As Glenn Greenwald wrote, "It is stunning to watch a single judge instantly shut down a primary means of online communication for the world’s fifth-largest country.” Rival service Telegram announced they added over 1 million new users overnight during the blackout (and added over 5 million in December’s blackout).

As I wrote for TechCrunch last December, Brazilian telco’s have been lobbying for months to convince the government that WhatsApp’s voice service is unregulated and illegal (not entirely unlike the taxi industry’s posture on Uber), and have publicly blamed the “WhatsApp effect” for driving millions of Brazilians to abandon their cell phone lines.

DEALS

> Mountain NAZCA invested MXN$15m in Luuna, a Mexican mattress e-commerce startup. Luuna launched with MXN$1.5m in capital last year.

> Grey Matters Capital made an undisclosed investment in Aulas AMiGAS, a Colombian edtech startup that provides tools and training to the education market in LatAm. CFO George O’Kane says they offer a mix of online and offline resources to 50,000 teachers and are doubling sales year over year.

> Invest Tech invested R$35m in Brazilian company Brasil/CT, which provides solutions for the B2B and B2C markets.

> Performa Investimentos invested R$7m in Intelipost, a Brazilian startup that provides SaaS logistics solutions for e-commerce businesses. Project A Ventures invested in 2014.

> Confrapar and former AMBEV executive Geraldo Camargo made a follow-on investment in ChefsClub, a Brazilian online platform for discounts in restaurants.

> KaszeK Ventures made an undisclosed investment in Brazilian bus ticket platform Guichê Virtual. The startup was founded by three engineers from Instituto Tecnológico Aeronáutico and has relationships with 70 bus companies. They say only 5% of Brazilians book bus tickets online.

NEW FUNDS

> Brazil’s BNDESPar will commit up to R$600m across five PE/VC funds in 2016, investing in logistics, energy, renewable energy, and innovation.

> FIR Capital BZPlan, a joint venture between FIR Capital and BZPlan, has raised R$50m for Fundo Sul Inovação, a new VC fund targeting investments in tech startups in the south of Brazil.

> New Argentine VC fund AR Fintech has raised US$5m. AR Fintech is run by Alejandro Estrada, co-founder of iBillionaire (IPO) and DineroMail (acquired by Naspers), and Andrés Meta, a shareholder of Banco Industrial. VC funds in Argentina have raised over US$256m since 2011.

Get more fundraising data in Latin America Venture Capital: Five-Year Trends, LAVCA’s comprehensive new report on the early stage ecosystem in the region.

PEOPLE & PROGRAMS

> Parabéns AppProva, BankFacil, Edools, Emprego Ligado, GetNinjas, and LoveMondays, the newest LatAm startups accepted into Google Launchpad, a two-week program in Silicon Valley that provides startups US$50k in grant funding and US$100k in credits for Google cloud services. LAVCA's Claudia Rosenbloom and I had a great time welcoming the new class at Google São Paulo last week, along with a number of LAVCA members.

> Alianza del Pacifico is looking for a new general manager for its Fondo de Capital Emprendedor. Backed by BID and FOMIN, the fund expects to invest US$40-US$100m in Chile, Colombia, Mexico, and Peru.

> INADEM’s next call for VC and impact funds is now open.

INVESTOR POV

> Felicis Ventures, which has invested in Mexican solar startup BRIGHT and Brazilian edtech startup eduK, has seen a 8.3X cash-on-cash return over four funds, with eleven companies valued over US$1b. Founder Ayin Senkut, a former Google Asia Pacific executive, attributes the firm’s performance to applying “wholeheartedly” one of the core principles he learned from Google:
"Obsession with questioning the status quo. I took a different path by pursuing companies poised for remarkable future growth (instead of the obvious hot sectors), being extremely flexible with ownership, not taking a board seat, and accepting uncomfortable valuations. The ability to write smaller checks more often allowed for learning much faster than at a typical venture capital firm. That initial approach swiftly netted a dozen exits by 2010, enough to help raise our first institutional fund.”

> Federico Antoni from ALLVP talks about fair terms in a guest post for TechCrunch:
"When we started investing in 2012, we were sometimes shocked by the dilution founders faced from the first capital round and the harsh terms they settled for with investors. Even if we were far friendlier than the rest, our first valuations were probably too low. Fast-forward to 2016 and you will find that most early-stage investors understand that value is created by betting on ambitious projects rather than negotiating petty terms.”

> Cankut Durgun at Aslanoba Capital walks through what to do when a founder has agreed to dirty terms.

> Joe Garza at Founder Institute compares ten of the most commonly used revenue models for startups.

> Gonzalo Costa at NXTP Labs counts six unicorns in Latin America and more on the way in a guest post for The Next Web.

> LAVCA Senior Advisor Ariel Muslera highlights the opportunity for fintech startups to deliver products to low income consumers at IE Business School's FinTech Venture Days in São Paulo.

QUOTABLE

THE FUTURE

> CBInsights has published a report on major acquisitions in artificial intelligence startups by Google, Apple, Facebook, Twitter, Intel, Salesforce, IBM, and Yahoo.

> Google has unveiled Tilt Brush, a 3D paintbrush that lets you construct artwork in virtual reality. Must watch.

#CHANGETHERATIO

> Take Back the Tech! (TBTT), a movement in 16 countries to bridge the digital gender gap and make the internet safer for women, is expanding their work in Latin America. Last year the organization’s campaign reached 1.5 million Latin Americans on Twitter to raise awareness of tech-related violence against women and held workshops on digital rights and online security in Colombia.

> Reprograma, a nonprofit initiative seeking to reduce the demand/supply gap in Brazil's tech sector by preparing young women programmers, especially those in vulnerable conditions with no access to higher education or job opportunities, is accepting applications for its inaugural six week training program.

The LatAm Venture Bulletin is a news platform of the Latin American Private Equity and Venture Capital Association.  

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