LatAm Venture Bulletin July 12, 2017

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LatAm Venture Bulletin


TODAY is the internet-wide day of action for net neutrality, and the only time you will see Facebook, Google, Amazon, Vimeo, Spotify, Reddit, and Pornhub united for a common cause. Read about what net neutrality is, why it’s under attack, and what people can do to protect it in The Guardian’s Why the 12 July protest to protect net neutrality matters.


> The Pacific Alliance (Chile, Colombia, Mexico, and Peru) plans to invest US$120m in entrepreneurial projects with the assistance of local funds. Institutions including BID, INADEM and Bancóldex will contribute US$25m, and the rest will be raised by Angel Ventures.

> Bossa Nova Investimentos partnered with Brazilian retail specialist Gouvêa de Souza to launch a fund that will invest in startups innovating in the retail sector.

Sancor Seguros will invest ARS$750m in a fund for entrepreneurship and the construction of an education-technology center. Sancor Seguros also announced the launch of an investment fund planning to invest in 32 tech and social startups over the next four years.

> Startup Brasil is being re-launched as Finep Startup, and plans to invest R$400m in Brazilian startups over the next four years.

> Startup Peru is looking to fund 350 startups by 2018. 278 startups have gone through the program since its inception in 2013.

> LEAP Global Partners launched its first early stage venture capital fund. LEAP Partners I will invest in Latin American entrepreneurs based in Mexico and in the US.

> Babel Ventures, a Silicon Valley firm founded by Bárbara Kunde Minuzzi and Daniela Arruda, raised a US$30m early-stage VC fund.


> Naspers and Innova Capital made a US$53m growth investment in Movile. Read more in TechCrunch.

> Fondo Pitanga and Tencent Holdings Limited made a US$27m Series B in Satellogic. Existing investors include NXTP Labs, monashees+, Valor Capital, Cygnus Capital, and Tencent.

Meritech Capital Partners led a US$30m Series C in Auth0, an identity verification solution, with participation from previous investors Bessemer Venture Partners, Trinity Ventures, and K9 Ventures. Cygnus Capital and NXTP Labs are prior investors.

> QED Investors led a US$7m Series A in ComparaGuru, a Mexican financial management platform for insurance and banking products, with participation from Seaya Ventures, Struck Capital, Nova Founders Capital, and Peter Thiel.

> monashees+ and Mindset Ventures led a US$8.5m investment in WorkCapital, a Brazilian fintech developer. FJ Labs also participated in the round.

> DGF Ventures made a R$5m investment in Intellibrand, a digital trade marketing platform, to fund international expansion.

> Criatec 2, a VC fund managed by Bozano Investimentos and Triaxis Capital, will invest up to R$10m in ERP Bling, a Brazilian SME management platform.

>, a Brazilian investment fund created by Peixe Urbano Founder Julio Vasconcellos and four other partners, made a US$256k investment in Terramagna, a the Brazilian IT startup.

> Y Combinator made a US$120k investment in Tpaga, a Colombia-based mobile payment platform from the founders of Tappsi. Tappsi merged with Easy in 2015.

> Dalus Capital made a MXN$72.4m investment in Cultura Colectiva, a digital media company creating content for Spanish-speaking millennials. This is the first investment out of Dalus’ second fund.

> Redpoint eventures and Global Founders Capital made an undisclosed investment in Escale, a Brazilian digital marketing agency.

> IGNIA Capital made an undisclosed investment in KarmaPulse, a Mexico-based social analytics company.

> Axon Partners made an undisclosed investment in Neumarket, a tire ecommerce platform operating in Mexico and Colombia.

> Kick Ventures made an undisclosed investment in Brazilian healthtech startup Portal do Médico.

> Angel network Verus Group made an undisclosed investment in Hands, a Brazilian mobile advertising platform with an MDM (mobile data management) platform.

> Ideas & Capital and ON Ventures made an undisclosed investment in Nimblr, an AI assistant for medical appointments based in California.

> STARTUP DIRECTORY: For more information about VC-backed startups in Latin America, check out LAVCA's Startup Directory, including 144+ early stage companies that have received US$1m+ in funding via a minimum of two rounds of investment and are still in operation.



> KaszeK Ventures exited NubeliU, a Brazil-based OpenStack cloud computing company, with a sale to to Logicalis.



> Vox Capital and Fiinlab (Grupo Gentera’s innovation lab) invested R$38.6m in Avante, a Brazilian startup providing financial services to microentrepreneurs.

> The Impact Investing Task Force for Argentina, formed by Acrux Partners and the City of Buenos Aires Government in March 2016, published a new report: Inversión de Impacto en Argentina 2017

> ImpactAlpha interviews Fernando Scodro of Brazilian family office Grupo Baoba about launching the Brazilian chapter of The ImPact, a network of wealthy families looking at impact investment opportunities to restore the environment and improve access to vital services for low-income Brazilians.

> Agri Investor interviews Joy Basu of Rise, TPG’s new US$2b impact investing fund, about their inaugural US$50m emerging markets agtech investment in India's Dodla Dairy, fresh dairy product provider.

> Forbes looks at how millennials are influencing global investing through crowdfunding, new ventures, and impact investing.



> Nibo is a fintech platform for small business accountants in Brazil that raised a R$20m Series A from Swedish investor Vostok Emerging Finance, with participation from existing investors Redpoint eventures and Valor Capital. Nibo co-founder and CEO Gabriel Gaspar talked with LAVCA about the opportunity to take on the most bureaucratic tax and accounting system on the planet:

"Managing a SMB in Brazil is like walking between landmines. There are so many opportunities to make small mistakes that can blow up your business. We believe that accountants are the right professionals to help SMBs succeed in such a complex and risky business environment. But, to do this, accountants need technology and guidance."

> Suyo, a startup making it easier and more affordable for low-income families in Colombia to formalize their houses and land, recently received follow-on financing from Omidyar Network. Suyo CEO Matt Alexander talks with LAVCA about the overwhelming size of the problem and opportunity:

"Approximately 60% of families in Latin America have not formerly registered their property due to the costs, time, and overly complicated processes".



> Chilean IT firm Sonda acquired Compufacil, a Colombian IT company with US$40m in sales in 2016.

> Brazilian retail software company Linx acquired Synthesys, an Argentine software company.

> French multinational Capgemini acquired RDI Brasil, a Brazilian software platform in an exclusive partnership with McDonalds Brasil.



Do 9 out of 10 startups really fail? Erin Griffith for Term Sheet:

It's not true. Cambridge Associates, a global investment firm based in Boston, tracked the performance of venture investments in 27,259 startups between 1990 and 2010. Its research reveals that the real percentage of venture-backed startups that fail—as defined by companies that provide a 1X return or less to investors—has not risen above 60% since 2001. Even amid the dotcom bust of 2000, the failure rate topped out at 79%.

> US$2.7b. The fine Google has to pay the EU for abusing search practices, and double the amount Google was anticipating. Expect an appeal.

> US$800m. How much agtech startups raised in the last five years. CBI looks at funded startups at the intersection of AI and agriculture.

2 billion. How many people are now on Facebook — More than 25% of everyone alive. ProPublica looks at how the biggest nation-state draws the line between hate speech and freedom of expression:

Facebook’s work amounts to what may well be the most far-reaching global censorship operation in history. It is also the least accountable: Facebook does not publish the rules it uses to determine what content to allow and what to delete.



> The Next Web: Argentina: A look into Latin America’s most global tech hub

> Reuters: Fintechs Seek Slice of Brazil's Small Business Loan Market

> Dinero: Pie al acelerador de la innovación en Colombia

> El Mercurio: Acafi explora propuesta tributaria para incentivar al mercado del capital de riesgo en Chile

> La Tercera covers the newly launched Chilean Venture Capital Association in Gestoras de fondos de venture capital arman gremio.

Financial Times—Mexico raises interest rates but calls time on further action:

With the peso being one of the world’s most liquid currencies, it is also in the line of fire as an emerging market hedge for risk beyond the region, like Britain’s decision to exit the EU. The peso breached a historic low of 22 to the dollar in January on President Trump’s Mexico-bashing rhetoric, but has recovered dramatically since then to pre-US election levels, easing pressure on prices of tradeable goods.

> The Motley Fool: How MercadoLibre Is Helping Take Latin American Commerce Digital

> Colombian startup Viajala is expanding to Spain. Viajala was accelerated at Startup Chile and Wayra Colombia, the accelerator of Telefonica Open Future_.

> In light of the EU’s US$2.7b anti-trust ruling against Google, Ben Thompson explores the concept of a digital monopoly and the standard for determining illegal behavior.



> Marta Cruz of NXTP Labs for TechCrunch: Argentina’s government is wooing entrepreneurs with a new law

> Veronica Wu of Hone Capital, a US$400m seed fund backed by Chinese private equity giant CSC Upshot, talks with McKinsey about the machine learning model they built to evaluate investments, and gives guidance for entrepreneurs raising Chinese capital.

> Harvard Business Review: Male and Female Entrepreneurs Get Asked Different Questions by VCs — and It Affects How Much Funding They Get

> Levensohn Venture Partners for TechCrunch: Why SAFE notes are not safe for entrepreneurs

> Brad Feld of Foundry Group: Lessons From The Internet Bubble: Growth vs. Profitability



> LAVCA VENTURE INVESTOR ANNUAL MEETING: Once a year, LAVCA convenes early-stage tech investors, along with select entrepreneurs, angels, accelerators, and tech companies, to foster connections across LatAm and internationally. LAVCA’s 2017 Annual Investor Meeting will take place on September 28 in New York at Tribeca 360. Agenda to be announced in the coming weeks.

> Applications are open for Google’s next Campus Exchange program, at Google Campus São Paulo in October. Fintech-focused startups across LatAm can apply by July 18.

>, a global accelerator supporting startups in heavily regulated industries, invites startups solving meaningful problems to apply to the 1776 Challenge Cup. Applications are open for teams in Caracas, Cochabamba, DF, Quito, Salvador, and Santiago.

> Congrats to Increase for joining Google Launchpad Accelerator, and Spectro and Blended for joining Startup Chile’s seed program. Increase, Spectro and Blended were accelerated by Wayra Argentina, Telefonica Open Future_'s accelerator.

> Apply by July 15 to participate in Telefonica Open Future_'s Startup Battlefield to be held at this year's Colombia Startup & Investor Summit. Startups focused on solving social issues can also apply to participate in Costa Rica Open Future_'s open call by July 16.



> TL;DR: Silicon Valley investors are massively rethinking how they respond when VCs sexually harass female founders.

> The cards keep falling. First, Susan Fowler at Uber. Then, three female entrepreneurs came out publicly about receiving unwanted sexual advances from Binary Capital partner Justin Caldbeck while they were fundraising from his firm. One of the women, Niniane Wang, said she’s been trying to get the story out for seven years.

Caldbeck and Binary Capital initially dismissed the allegations, but within a couple of days, Caldbeck left the firm permanently. Lowercase Capital’s Matt Mazzeo, who was set to join Binary, quit. Two portfolio companies terminated their board relationships with Binary, and a third requested to buy back its Binary investment. LPs voted to terminate the new fund and wind down the US$175m fund that closed last year, and Binary partner Jonathan Teo acknowledged he knew Caldbeck had prior history harassing women and offered his resignation. In other words, “Binary is likely done.”

Lightspeed regrets they didn’t take “stronger action” when they learned Caldbeck sexually harassed a female founder when he worked for Lightspeed. Instead, they asked her to sign a non-disclosure and recommended Caldbeck’s new fund to LPs. Dan Primack calls Lightspeed’s behavior “disgraceful” and argues it enabled Caldbeck to continue harassing when he joined Binary.

> Next out: Dave McClure of 500 Startups. After being mentioned in a New York Times story that interviewed more than two dozen women in tech, and public accounts of sexual assault, McClure has left the company. 500 partner Elizabeth Yin resigned separately, saying 500 had covered up a separate sexual harassment incident involving McClure.

> “As soon as [VCs] start discussing potential business deals of any kind with an entrepreneur, there is no such thing as an innocent or appropriate sexual proposition or remark.” LinkedIn co-founder and Greylock partner Reid Hoffman’s reacted to the newest sexual harassment scandal in US VC in The Human Rights of Women Entrepreneurs.

> Microsoft head of research danah boyd writes, “what surprises me most about the current conversation about the inhospitable nature of tech for women is that people are surprised.”

> A group of investors and founders have published a template for a investor/founder sexual harassment policy.

> Erin Griffith asks if LPs can help fix the problem.

> 500 Startups’ Elizabeth Yin gives specific examples of what VCs can do to help eliminate sexual harassment and inappropriate behavior in the startup world in Speaking up about sexual harassment is hard. But we must start a new chapter.

> Read more about the mechanics of how startups can divest their investors.

Will Silicon Valley’s recent events have an impact in your market? Hit “reply” and let us know?


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