LatAm Venture Bulletin June 7, 2017

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LatAm Venture Bulletin


The global transport wars are heating up in Latin America with major investments from new Asian players.

A few months after Chinese transportation giant Didi Chuxing announced a US$100m investment in Brazilian rideshare app 99, Japan’s SoftBank and existing investor Riverwood Capital announced a separate US$100m investment in 99. (99 also has funding from monashees+, Qualcomm Ventures, and Tiger Global.) TechCrunch says 99 will use the fresh cash to fund expansion of 99POP, its peer to peer ridesharing app, to other LatAm markets.

SoftBank’s investment in 99 comes weeks after Spanish rideshare app Cabify announced a US$100m inside round from existing investors Rakuten, Seaya Ventures, and AngelList. Cabify plans to invest US$200m on its Brazil expansion. Brazilian incumbent Easy, the first rideshare app to launch in the region, has about US$80m in disclosed funding from a global constellation of investors that includes Latin America Internet Holding (LIH), Asia Internet Holding, Phenomen Ventures, Holtzbrinck, and Tengelmann; Easy merged with Colombian app Tappsi in 2015. And then there’s Uber, which told Bloomberg last year that Mexico City is its #1 market globally.

SoftBank and Didi’s investment in 99 further complicates an already tangled web of investors in global rideshare apps. SoftBank is an investor in Didi, which just raised a record US$5.5b round. (SoftBank’s new US$100b Vision Fund, the largest technology investment fund ever raised, has a ride-hail prohibition, so SoftBank’s investment in 99 was made from a separate fund.) Meanwhile, Uber has a 20% stake in Didi, after selling its Chinese operations to Didi in 2016 in a deal that made Uber Didi’s largest shareholder; Didi also pledged a US$1b investment in Uber as part of the deal. So while Uber, Easy, Cabify, and 99 are battling it out in LatAm, Uber (via Didi) now has a stake in 99’s success -- and Didi has a seat on 99’s board.

Didi Chuxing investor (and LAVCA board member) Martin Diaz Plata talked about Didi’s success at bringing adversaries to the table at LAVCA’s Annual Investor Meeting in New York last September. WATCH him explain how Didi brought Apple, Tencent, Baidu, and Uber to the table as strategic shareholders.



> KaszeK Ventures raised US$200m for its third fund. The New York Times reports KaszeK plans to maintain its investment focus in Brazil, and is looking at agtech, education, and healthcare in addition to marketplaces, fintech, and SaaS. KaszeK is known for its founder-friendly approach, which artner and LAVCA VC Council member Hernan Kazah says will continue in Fund 3:

“As a team, we love rolling up our sleeves, and working alongside with the entrepreneurs to help them maximize the chances of success of their ventures. With this new fund we expect to continue partnering with outstanding teams, and help them execute their visions.”


> Spanish VC Seaya Ventures led a US$6.6m Series A in Yogome, a Mexican edtech startup that makes kids games for the iPad, with participation from Variv Capital and Endeavor Catalyst. Yogome previously raised US$3m from Variv Capital, 500 Startups, and Topaz Capital.

> Axon Partners and Grupo Pegasus led a US$6.2m investment in Mercadoni, a Colombian grocery delivery app.

> Speaking of #DELIVERY: Mexican delivery startup Cornershop (the first startup in Mexico to receive funding from Accel Partners) received a US$21m Series B last month led by Accel with participation from Creandum, Jackson Square Ventures, and ALLVP. READ our interview with Cornershop co-founder and CEO Oskar Hjertonsson to learn how showing significant progress to investors was critical to landing the Series B.

> Magma Partners invested US$3m in real estate portal PropertySimple (PropriedadFacil in Chile) and made an undisclosed seed investment in AwesomeJobs, a startup job portal focused on Latin America.

> Criatec 2, a Brazilian VC fund managed by Bozano Investimentos and Triaxis Capital, invested R$2.5m in Konduto, a Brazilian anti-fraud company.

> Peruvian media holding company Grupo RPP made a US$500k investment in Joinnus, a Peruvian full-service event platform. UTEC Ventures and Wayra Peru, the accelerator of Telefonica Open Future_, invested previously. WATCH our interview with Joinnus founder Domingo Seminario.

> A group of investors on FounderList invested seed capital in Latin American startups Keteka,, Monitor, and PlieQ using the Syndicate investment model popularized by AngelList.

> Colombian startup Aflore is the first company to apply the direct sales model to deliver financial products. Aflore raised a Series A from Fiinlab, and emerged out of Polymath Ventures, a Colombian company builder. Aflore co-founder and CEO Ana Barrera says only 12% of Colombians have access to formal lending channels. READ our interview with Ana about the opportunity to close the lending gap.



> The Multilateral Investment Fund (MIF) of the Inter-American Development Bank (IDB) is anchoring NXTP Labs’ Impact Investing Fund with a US$5m investment. This is NXTP’s first impact fund, with a US$120m target, and a focus on Argentina, Paraguay, and Uruguay. MIF previously invested in NXTP Fund 1.

> Adobe Capital exited NatGas, a Mexican company that promotes the use of natural gas to power cars, to an undisclosed buyer.

> The Global Impact Investing Network (GIIN) published its Annual Impact Investor Survey 2017, surveying over 200 of the world’s leading impact investing organizations, representing US$114b in assets.

> ImpactAlpha: Pomona Impact’s “big push” strategy for agriculture in Central America.

> Law360: Demand For Impact Investing Could Be Boon For Attorneys

> The Aspen Network of Development Entrepreneurs (ANDE) is seeking a Program Analyst to work in the Brazil chapter. 



> What are the biggest VC rounds in Latin America? According to LAVCA data:

  1. NetshoesUS$170m round in 2014, led by GIC, Singapore's sovereign wealth fund, with participation from Tiger Global Management, and Temasek
  2. 99’s US$100m investment from Didi Chuxing in 2017
  3. 99’s US$100m investment from SoftBank in 2017
  4. Nubank’s US$80m Series D in 2016, led by DST Global, with participation from Redpoint Ventures and Ribbit Capital

> A new fintech report by BID and Finnovista identifies 703 fintech startups across 15 countries in Latin America.

> Goldman Sachs’ report, Fintech Brazil’s Moment, estimates that the 200+ fintech companies in Brazil should generate a potential revenue pool of about US$24b over the next decade, with a focus on payments, lending, and personal finance.

> Combined, Google and Facebook accounted for 85% of the total internet ad revenue growth between 2015 and 2016 -- from Mary Meeker’s annual Internet Trends report.

> Google announced that there are now two billion Android devices in active monthly use globally. Apple said a year and a half ago they have over one billion iOS devices in active use.

> Only 10% of private capital investment goes to emerging markets. For now...



> Brazilian lawyers Marlon Reis and Ronaldo Lemos, the instigator of Brazil’s Marco Civil, launched Mudamos, a civic participation app that lets you create campaigns with legally recognized signatures. Brazilian law requires 1.6 million signatures to propose legislative change on the federal level (300,000 in most cities, and 60,000 in most states). Mudamos got 300,000 downloads in its first week, and is built on blockchain technology. Ronaldo Lemos leads Rio’s Institutio de Sociedade e Tecnologia (ITS-Rio), which just received a R$1.5m prize from Google for its work on social impact.

> In April, Brazilian shipping platform Mandaê launched Freedom, an e-commerce logistics service that now accounts for 33% of all shipment volume, according to their newsletter. Mandaê investors include Valor Capital, Qualcomm Ventures, monashees+, and Kima Ventures.

> CBInsights’ list of top agtech startups includes four in Latin America: S4 (Syngenta Ventures, Cygnus Capital, NXTP Labs), BovControl (Redpoint, Aegro (SP Ventures), and Strider (Qualcomm Ventures, monashees+). READ our interview with Strider CEO Luiz Tangari about the agtech opportunity in the region, and this roundup of recent agtech activity by SVB’s Jackie Hyland.

> Cisco and IBM have formed an unprecedented partnership to share threat intelligence in the wake of the global WannaCry ransomeware attacks last month. Cisco Security Group GM David Ulevitch addressed investors at LAVCA’s VC in the Bay program in April.

> #CHANGETHERATIOApple says they have created 1.5 million app-related jobs globally to date, and is releasing a free one-year curriculum on how to write apps for the iPhone in the hopes of attracting more women, black students, Latinx students, and rural students to app development.

> Financial Times: Trump’s visa crackdown spurs tech moves to Mexico. “Mexican IT services hit US$20b in 2016 and are set to outpace the growth of the sector in India, increasing 15 per cent year on year.”

> Former TechCrunch editor Eric Eldon makes the case for fixing cities with tech. Relevant read, as LatAm is the most urbanized region in the world, with 80% of the population living in cities.

> Legendary tech columnist Walt Mossberg writes his final column about the disappearing computer. “Tech was once always in your way. Soon, it will be almost invisible.”



> Congrats to Hogaru, an on-demand cleaning service for small businesses in Colombia, for winning Startup Competition 2017, hosted by Spain Startup, Wayra Colombia, accelerator of Telefonica Open Future_, and Innpulsa. Hogaru was one of two LatAm startups in the latest YCombinator batch.

> Applications are open for entrepreneurs building solutions for Mexico’s underbanked to apply for Village Capital’s 2017 fintech program.

> UTEC Ventures and MIF will be hosting the Peru Venture Capital Conference on June 13-14 in Lima.

> Convocatorias: Telefonica Open Future_ announced open calls in Brazil and Costa Rica. Apply by June 20 to participate in Crowd Vale da Eletrônica or by June 18 to participate in Costa Rica Open Future_.

> Omidyar Network is looking to make three key hires in Latin America, for their Education, Governance & Citizen Engagement initiatives:

> ProductHunt, a product recommendation website acquired by AngelList, is looking for a full-time, full stack engineer based anywhere in Latin America.



> Susana Garcia-Robles of the Multilateral Investment Fund (MIF) for the Huffington Post: Millennial frustration is helping Latin America find its own model of innovation.

> Nathan Lustig of Magma Partners launched a podcast where he interviews cross-border entrepreneurs and investors, including PropertySimple founder Adrian Fisher.

> Bloomberg interviews Marc Andreessen on unicorns and valuations: “There are no bad ideas, only early ones.”

> YC Partner Paul Buchheit shares lessons learned investing in 200+ startups. Buchheit was #23 at Google and came up with their “Don’t be evil” motto in 2000.

> Check out this list of over 200 VC firms with sub-US$200m funds, organized by SVB’s Shai Goldman.


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