LatAm Venture Bulletin April 12, 2017

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LatAm Venture Bulletin

> The number of venture capital deals reached a record high in 2016, increasing from 182 in 2015 to 196 in 2016. Brazil was the largest market by capital invested (US$279m), but Mexico recorded the highest number of deals in the region, increasing from 48 in 2015 to 73 in 2016.

Check out investments per country and sector, top 10 deals by value, and the most active investors in the region in our 2017 Trend Watch: Latin American Venture Capital Infographic, which summarizes venture-only results from the LAVCA 2017 Industry Data & Analysis (the ninth annual survey of fund management firms active in Latin America and the Caribbean).


> BIG NEWS: Argentina’s Ley del Emprendedor, regulating new company creation, equity crowdfunding and more, has been approved in the Argentine Senate. READ the key points here. WATCH Mariano Mayer, National Secretary for Entrepreneurs and SMEs, Ministry of Production, explain the new law here. ARCAP President Marta Cruz says:

"A partir la aprobación por unanimidad de la Ley de Emprendedores, vamos a tener un ecosistema muchos más amigable para dinamizar las inversiones locales y para atraer a inversores extranjeros. Y, al mismo tiempo, los emprendedores de alto potencial van a encontrar nuevos instrumentos para financiar sus proyectos en nuestro propio país."

> Mexico has proposed a new Ley del Fintech to regulate crypto-currency/blockchain, equity crowdfunding, dinero electrónico, as well as a regulatory “sandbox” for new fintech entities. Read on in Expansión and in El Financiero.

> AMEXCAP is lobbying the Mexican government to introduce the Limited Partnership as a new fund structure by the end of the year. Good news for local/international GPs who want another option outside of a CKD to raise capital.

> Brazil’s Congress just approved a new law allowing companies to outsource core business functions, which could drive more investments in the country. Good news for startups. Meanwhile, Uber faces new policy challenges in Brazil.


> DOMO Invest, a VC fund launched by Buscapé Co-Founder Rodrigo Borges along with partners Gabriel Sidi and Felipe Andrade, closed R$100m from Brazilian family offices to make seed investments in 20 startups in Brazil.

> DILA Capital announces a first close of MXN$400m for Fund III, with plans to raise another MXN$600m.

> The IFC is anchoring 500 Startups’ second Latin American fund, which is managed by Santiago Zavala out of Mexico City.

> Grupo BMG, owners of BMG bank in Minas Gerais, Brazil, acquired a stake in Bossa Nova Investimentos, with plans to invest R$100m in the fund over the next few years.


> VARIV Capital and Chilango Ventures made an undisclosed investment in MPOWER, an American student lending platform. Mexico is MPOWER’s third largest market, and 25% of its outstanding loan portfolio is in Latin America. VARIV partner Pepe Bolanos says the investment will use “cutting edge tech to enable Latin American students to pursue higher education in the US, focusing on an attractive, relatively low risk, and historically untapped credit market.

> ALLVP and Coca-Cola made an undisclosed follow-on investment in Mexican Mobile Virtual Network Operator (MVNO) weex, an example of the growth in telco innovation Mexico is seeing as a result of the 2014 Mexican Telecom Reform bill.

> e.Bricks Ventures made an undisclosed follow-on investment in Me Salva!, a Brazilian edtech video platform for high school students.

> Criatec 3, a venture capital fund promoted by BNDES and managed by Inseed Investimentos, made its first agtech investment of R$2m in Chip Inside. Chip Inside produces a smart collar for dairy cows that monitors health and reproduction. Agtech is a sector poised for growth in latin America, according to 2017 Trend Watch: Latin American VC Infographic. CALL FOR ENTREPRENEURS: Criatec 3 is actively looking for Brazilian entrepreneurs to invest in.

> Fundo Sul Inovação, a VC fund co-managed by Brazilian firms FIR Capital and BZPlan, invested R$5m in Cata Company (formerly Catamoeda), a Florianopolis, Brazil-based cash management platform for small retailers.

> Trivella M3 Investments’ fund, Cypress M3 FIP, has made a R$3.2m investment in Brazilian audiobook company Ubook.

> An unnamed group of angels invested R$1m in Supermercado Now, a grocery delivery startup partnered with five grocery chains in São Paulo, Brazil.

> Vox Capital invested R$4m in Aondê Educacional, an edtech startup in Rio de Janeiro, Brazil that is gamifying and animating the primary education experience. Vox, one of Brazil’s earliest impact-investing fund managers, has backed more than 20 startups since 2009. The firm now manages about US$120m between its two funds. Impact investors in Brazil made 48 investments totaling roughly US$70m in 2014 and 2015, according to the LAVCA, the Aspen Network of Development Entrepreneurs, (ANDE) and LGT Impact Ventures.


> BIG NEWS: Ford Foundation, through their endowment, is committing US$1b to managers investing in affordable housing and financial services in developing countries.

> Former World Bank officials launched BlueOrange Capital, an impact fund that plans to mobilize US$1b for SMEs across Latin America and the Caribbean.

> Colombia leads the developing world in signing the first social impact bond contracts.


> AppProva, a Brazilian test prep platform, sold to Somos Educação, generating a net IRR of 51% for AppProva investor e.Bricks Ventures. (Baguete’s original report inaccurately put the sale price at R$500k.)


> Australian jobs site Seek, along with existing shareholders, acquired a stake in Workana for R$8m. Previous investors include NXTP Labs and DMGT.

> Grupo Quality, a software company listed on the BM&FBovespa, acquired Premier IT Global Services for R$31m. Grupo Quality is an InvestTech portfolio company.

> Brazilian electronics manufacturer Grupo Multilaser acquired Giga Security, a Brazilian company manufacturing digital security products.

> GoDaddy acquired Sucuri, a Brazilian security company.

> Rede Pay acquired Brazilian loyalty program startup Zimp.

> Retailer magazine Luiza acquired retail technology startup Integra Commerce.

> Lambda3, a software company in São Paulo, Brazil, acquired its competitor BR Soluções.

> Procfit, a management software company, acquired a stake in Dr. Vendedor, an e-learning platform for sales teams.



> Netshoes IPO'd today on the NYSE. Congratulations to investors KaszeK Ventures, Riverwood Capital, the IFC, GIC, Tiger Global, Iconiq Management, and Temasek Holdings. 

Google is launching Waze Carpool, a competitor to Uber and Lyft, only a month after rolling out in select cities in California. Di-ann Eisnor, Waze’s head of global partnerships, says, "Não é serviço de transporte particular, táxi, uber. É carona."

> Cabify is investing US$200m to expand in Brazil. Cabify COO Ricardo Weder says, “Over the past twelve months we have seen unprecedented growth in terms of share mobility and volume of rides in Brazil. Consolidating our presence there is a core part of our strategy.

> Data center company Odata, created by Brazilian private equity firm Pátria Investimentos, will expand its operations and invest US$100m in Colombia.

> El Economista: En el 2016, 65.6m de personas utilizan Internet en Mexico, cifra que representa el 59.5% de la población. Top use case is to communicate with others; bottom use case is financial transactions.

> El Financiero: Fintech acelera crecimiento pero sin regulación.

> Fortune: When should startups use debt?


> The IDB and Microsoft formed a strategic partnership to advance cloud computing and IoT technology in Latin America.

> IBM Brasil is launching IBM AgriTech, an open platform that is partnering with traditional agribusiness companies and agtech startups like Agrotools in Brazil.



> Mariano Amartino joins Microsoft as their new Director of Startups for Latin America.

> iFood has a new CEO, Carlos Eduardo Moyses.

> Omidyar Network has three job openings in Latin America:

> Telefonica Open Future_ announced their "Second Go Ignite Global Call" for startups in Consumer Experience AI, Connected Homes, and IoT Security to develop their business and gain visibility. Applications are due by April 30. For Argentinian startups looking for a crowdworking space, apply by April 16 to gain access to Telefonica Open Future_'s La Catedral crowdworking space.

> Xpand Ventures, Diario Clarín’s new corporate business accelerator, led by Vanessa Kolodziej, is open for applications from early-stage startups, with a focus on IoT, data science, agtech, fintech, insurance, e-commerce, and adtech. Xpand Ventures will invest US$50k - US$250k in five startups this year. Applying companies should be operating in Argentina and be able to show strong sales and customer acquisition metrics. Apply here.

> Imagine Lab in Chile, with support from CORFO and Microsoft, is accepting applications from early-stage startups. Apply by April 28.

> The Brazilian Development Agency ABDI has launched accelerator program Startup Indústria. The program will fund up to 40 startups with R$150k - R$700k. Today is the deadline to apply.

> Supported by ICT and CORFO, Chile’s Image Lab has opened a call for startups. Apply by April 28 to receive training, access to investment opportunities, and up to CLP$120k in funding and more than US$82k in services.

> Finnovista is accepting applications for Startup Bootcamp FinTech Mexico City this summer. Early-stage startups with a viable product and client base can apply by May 21.



> Forbes interviews Alonso Díaz of Gerbera Capital on underserved markets in Mexico:

"En educación tenemos un déficit grande, hay oportunidad para mejorar la calidad y el acceso; en turismo hay una cobertura natural ante los movimientos del tipo de cambio; el clima para la agricultura es benévolo y se puede exportar a todo el mundo; en bienes raíces hay, por darte un dato, 150 millones de personas en el país, eso genera 32 millones de hogares, tenemos 29 millones de casas, y tenemos un déficit de casas para cubrir el número de hogares. Esto va aparejado con comercio, zonas industriales, oficinas… Hay una demanda acumulada que no se ha satisfecho."

> First Round Capital: How Credit Karma Built a Sexy Brand in an Unsexy Industry with No PR or Budget.

> Steve Case says the next breakthrough companies will come from undercapitalized venture markets. He’s talking about the US, but it’s applicable towards Latin America.



fmd with space

> BIG THANKS to Astella Investimentos, Cygnus Capital, Equitas Capital, IGNIA Partners, Jaguar Ventures, MITA Ventures, Mountain Nazca, NXTP Labs, Polymath Ventures, SP Ventures, Xpand Ventures/Grupo Clarin, and Carolina Dams of the IAE Business School for joining us in California last week for our inaugural VC in the Bay program. Also special thanks to SVB, Telefonica Open Future_, and Omidyar Network for making this program possible.


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