LatAm Venture Bulletin
LatAm Venture Bulletin April 15, 2020

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LatAm Venture Bulletin

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> iFood is taking on Rappi in Colombia through a majority acquisition of Domicilios, which Delivery Hero acquired in 2014. iFood will own 51% of the JV with Delivery Hero.

  • The transaction is undisclosed but one of iFood’s largest transactions to date. Incoming Movile CEO Patrick Hruby shares:

    "Now, more than ever, iFood’s foodtech and online delivery services are a lifeline for Latin American consumers during our stay-at-home mandates. At a time like this, the most important thing is to take care of people. If that means making more deliveries, it will be a consequence and not an opportunity.

    The agreement between iFood and Delivery Hero in Colombia has been under discussion for several months, long before the novel coronavirus outbreak reached a pandemic level. The deal is strategic because our combined operations will reach more than 30 cities and a network of 12,000+ restaurant partners. Movile will make significant investments in AI, R&D and logistics-focused efficiencies to achieve our goal of a rapid ramp-up in Colombia."

> Brazilian logistics platform CargoX raised a US$80m Series E led by LGT Lightstone Latin America, with follow-on from Goldman Sachs Growth Equity, Valor Capital, and Farallon Capital.

  • The Blackstone Group and Hudson Structured Capital Management led a US$60m investment in 2018. Goldman Sachs led a US$20m Series C in 2017, with participation from Qualcomm Ventures, Soros, and existing investors Valor Capital, Agility Logistics, and others.
  • In March, CargoX set aside R$30m to fund truck transport of essential goods. President Federico Vega shares:

    "Under the current environment, with truckers and shippers trying to avoid human contact, digital platforms have become an essential need to the sector. The offline to online transition of the industry is accelerating dramatically and strong competition is non-existent. The opportunity is ahead for CargoX to continue leading the digitalization of the industry."

> SoftBank invested R$250m in PetLove, a Brazilian marketplace for pet goods. KaszeK and monashees invested previously. PetLove CEO Marcio Waldman shares:

"This is a time for everyone to sacrifice for the health of the population and we are doing our part by providing pets with basic necessities such as rations and medicines while their guardians stay at home, as well as helping veterinarians and small pet shops through Vetsmart, a company we acquired in 2019." 

> Frubana, a Colombian B2B platform of agri-products for restaurants and small retailers, closed a US$25m Series A led by GGV and monashees with participation from SoftBank, Tiger Global, and others in January.

  • Founded in 2018 by Rappi veteran Fabián Gomez, Frubana has over 100 employees and raised US$12m in 2020 from monashees and others.
  • Gomez says Frubana is helping shift the food supply industry from a push system to a data-driven pull system: “Push: farmers sell whatever they have to a truck driver, who goes to a plaza and sells to a tier 3 distributor, who sells up to tiers 2 and 1. That takes about 72 hours.”

> Valor Capital and DNA Capital led a US$11m Series B in Sanar, a Brazilian edtech platform designing customized online training for careers in healthcare, with follow-on from e.bricks Ventures and Vox Capital.

  • CEO Ubiraci Mercês: “Our mission is to offer all the tools for doctors to become super doctors.”

> Trivella M3 invested R$1m in AgroPro, a Brazilian plague monitoring platform with ~150,000 acres of crops under management.

> Digital financial education platform Mozper raised US$770k from DUX Capital and angels. The platform enables parents to manage their children’s allowances through an app and debit card in order to provide financial education. Co-founder Gabriel Roizner formerly founded fashion discovery platform TiZKKA.

> Innpactia, a Colombia-based marketplace to match entrepreneurs with sources of impact funding, raised a US$260k seed round in December from two unnamed Latin American family offices, a philanthropic foundation, and angel investors.

> VC investment in Latin American startups has quadrupled since 2016 to a record US$4.6b in 2019, according to LAVCA data.



> #CVC LAVCA welcomes new member Proeza Ventures, a LatAm-based VC firm investing exclusively in the mobility space, and backed by Grupo Proeza. Proeza Ventures is looking to partner with ambitious and visionary founders transforming the way in which we think about mobility pushing for more efficient, seamless, safety-focused and environmentally friendly solutions.

> LAVCA publishes an annual directory of VC/Tech members, with profiles on 75+ firms active in Latin America.



> #EXIT #M&A Movile’s Wavy was acquired by Sinch AB, a Swedish customer engagement platform, for R$355m and ~1.5m shares of Sinch.

> #M&A The clock is ticking on the Cornershop/Uber deal. Six months after it was announced, regulators in Mexico are still arguing over who has jurisdiction on the deal, which should expire in July.

  • Co-founder Daniel Undurraga says business is up and they can barely handle the demand. “The ecosystem is outraged. Let's see if after more than six months of doing nothing, COFECE and IFT deign to do something before the deal expires.”

> #DELIVERY Colombian grocery delivery startup Merqueo will take over Movistar Arena in Bogotá as its distribution center during the coronavirus crisis to respond to the rising demand.

  • CEO Miguel McAllister says demand has grown 3x since the quarantine started in Colombia and Mexico.
  • McAllister previously sold Domicilios to Delivery Hero, and also co-founded MUY Tech, a Colombian restaurant management platform.

> #DELIVERY Rappi and Cornershop are partnering with taxi drivers in Chile to support last-mile delivery during the pandemic.

> #DELIVERY Mexican grocery delivery startup Jüsto partnered with Mexican transport app Urbvan to deliver Jüsto orders with Urbvan’s fleet. Jüsto also launched a phone hotline for older people to call in orders.

> #DELIVERY Colombian meal kit startup Foody launched a campaign to donate meals to people vulnerable to COVID-19.

> #HEALTH Colombian healthtech 1DOC3 launched an AI-assisted COVID-19 risk assessment test which was donated to the government of Colombia. 117k people have self-diagnosed in the first few weeks.

  • 1DOC3 also partnered with Telefonica and others to provide virtual medical consultations to their workforce entirely covered by their employer.
  • CEO Javier Cardona shares: "Our main goal is to contain, reduce and avoid in person medical visits as much as possible.”

> Loft and Decorati partnered on a R$5m fund to support construction workers out of work during the crisis.

> Argentine fintech Ualá is giving borrowers an extra 30 days to make payments. CEO Founder Pierpaolo Barbieri: "The only way to overcome COVID-19’s impact is if we all do our share. That way, we’ll get through together."

> Truora, a Colombian fraud detection startup providing instant background checks, launched a new system of identity verification for employees of companies that are still required to work and travel during the COVID-19 quarantine.

> CitySense, a Chilean open platform to develop smart city solutions rolled out an application called Datmob for authorities to monitor movement in quarantine zones.

> Whyline’s “virtual line” software is helping avoid crowds in one of Brazil’s private hospital groups, and rolling out partnerships in Argentina. CEO Michael Twersky: “We're working with the city of Buenos Aires as part of their emergency response plan to curb the spread of the contagion by opening up virtual queues and appointments. And we're doing the same thing for Banco Macro.”

> Omie, a Brazilian cloud management platform, redesigned its go-to-market strategy in response to the rising economic toll from the pandemic.

> Suflex, a new Brazilian provider of management software for restaurants, partnered with fintechs and tech companies to connect restaurant and bar owners with potential sources of credit.

> Gympass reduced its global workforce by about 30% in response to disruptions from the pandemic. Brazil CEO Leandro Caldeira was promoted to COO of Latin America.

> FT: Nubank shakes up Brazil’s banking bureaucracy.

> Brazilian edtech Descomplica has received university accreditation and is offering undergrad coursework.

STARTUPS: How are you responding to the coronavirus pandemic? Share your updates by filling out this form.

> Check out LAVCA’s directory of 331 Latin American startups with at least US$1m in VC funding, verified by LAVCA (as of end-2018), our Unicorn Leaderboard, and our Inaugural Survey of Latin American Startups.



> Bloomberg looks at the effect of the COVID-19 pandemic on iFood, Rappi,and PedidosYa in Delivery Drivers Double in Latin America: `It's Been Crazy Days':

  • iFood CFO Diego Barreto: “I see two big challenges for our business: One is making sure we keep the delivery chain working. The other is helping restaurants survive.”

> IDB Lab is crowdsourcing a map of startups leading potential solutions relevant to the coronavirus pandemic.

> Google launched a series of mobility reports showing how people’s movements in different countries are changing with the COVID-19 pandemic.

> DiDi is granting COP$300mm in rides to mobilize healthcare workers in Bogotá and Medellín.

> In Brazil, Sebrae is gearing up to extend R$12b in credit to small businesses.

> Colombia’s Banca de Desarrollo Territorial (Findeter) is issuing a COP$713bn credit line to support public and private enterprises that have been negatively impacted by the pandemic.

> Colombia’s Fondo Nacional de Garantias launched a COP$12b credit guarantee program for small businesses.

> WSJ: In Developing World, Coronavirus Slams Workers in Informal Economy:

India passed a US$22.5b package to provide 800 million people food and staples… Mexico’s government earmarked ~US$1b to extend interest-free or low-interest loans…. In Peru, where 70% toil in the informal economy, the government is looking to offer the poorest a one-time payment of $110. 



> LAVCA Members now have access to 2020 LAVCA Industry Data & Analysis which summarizes fundraising, investments, and exit activity in Latin America for 2019.

  • Private capital fund managers deployed US$10.6b in 2019, a record year. Exit proceeds were also notable with the highest divestment amount since 2011 (US$6.5b).
  • DOWNLOAD the report here. (The US$795 charge is waived for logged in members during checkout. Create a login here).
  • Stay tuned for LAVCA’s Annual VC/Tech Report, with breakouts on country/sector/stage activity.

> ARCAP, in partnership with Microsoft for Startups, launched a report on gender diversity among Argentine startups that were funded in 2019.

> #CVC Wayra and IESE Business School, with support from CORFO, launched a report on Corporate Venturing in LatAm, interviewing 133 chief innovation officers (and similar roles) alongside an analysis of 1,760 corporate subsidiaries in Latin America.

  • Miguel Arias, Telefonica’s Global Entrepreneurship Director: “Corporate venturing has become more than a fancy trend in Latin America.”


> KaszeK Ventures shares the Survival Guide they sent to their founders: It’s time to switch to war-mode.

> e.bricks Ventures shares updates from portfolio companies they expect to navigate the crisis well. “Since the outbreak of this pandemic in Brazil, we have had one agenda with the founders and CEOs of our portfolio companies: focus on cash preservation.”

> Adobe Capital, ALLVP, Cometa, DILA Capital, IGNIA, Jaguar Ventures, Mountain Nazca, and others signed the Mexican Ecosystem Pledge, committing to best practices in support of protecting the Mexican startup ecosystem through the crisis. AMEXCAP, Endeavor, and ASEM are supporting this initiative.

> Gustavo Brigatto of Valor Econômico interviews investors from e.bricks, Wayra, DOMO Invest, Bossa Novo Investimentos, and others in Preservar caixa é o novo mantra das startups.

> Anderson Thees of Redpoint eventures on focus: “The focus is 100% on our portfolio right now.”

> Eric Acher of monashees on resilience: “It’s important to remember that a lot of these companies were created during the worst recession we’ve lived through in Brazil.”

> Edson Rigonatti of Astella Investimentos shares advice the firm is giving its portfolio companies, emphasizing psychological support as well as scenario planning. “We are looking at lines of financing, particularly credit, for any company with less than 12 months of caixa.”

> Florian Hagenbuch of Canary and Loft shares his view on how the pandemic will set a higher bar for investments.

> Greg Mitchell of Angel Ventures Peru shares his view on the newly found importance of corporate governance practices for startups amidst the current climate.

> Andreessen General Partner David Ulevitch on planning and managing layoffs:

"Laying your employees off is one of the hardest things you do as a leader. But remember, however badly you feel about it, your issues are small compared to those of the impacted employees. For them, the layoff may cause serious financial and psychological distress…. You think you have it tough, but they have it far tougher. Your duty as a leader is to do everything in your power to give them as many resources as you can and offer them the most dignified exit possible. This will take careful thought and planning, and it may be the most important planning you ever do as CEO."

> INVESTORS: How are you responding to the coronavirus epidemic? How are you advising your portfolio companies? Fill out this quick form.


> LAVCA Members are invited to a private discussion LAVCA Board Room Insights: Navigating COVID-19 on April 17 at 11:00 AM ET. LAVCA MEMBERS RSVP HERE.

The meeting will be a unique opportunity for members to get live insights about the impact of the global pandemic on the private capital industry in the region from discussion leaders:

Carlos Garcia, LAVCA Chair & Managing Partner of Victoria Capital
Patrice Etlin, LAVCA Chair Emeritus & Managing Partner of Advent International
Francisco Alvarez-Demalde, Former LAVCA Board Member & Founder of Riverwood Capital

> Congrats to Endeavor Argentina’s new Scale Up cohort: Entelai, MOOVA, Un Ensayo para MÍ, NOMADA, Drixit Technologies, UNTECH, Shop your Fit, Fingran.

Claudio Barahona, former head of Wayra Chile, joined Alaya Capital Partners as a Managing Partner. “El ecosistema tiene que ser como una startup: pivotear a medida que va creciendo.”

ProColombia is hosting a digital pitch session on May 7. Colombian startups can apply here.

> Y Combinator is fast-tracking investments in startups tackling COVID-19.

> Investors from MAYA Capital, Canary, Astella, Innova Capital, Positive Ventures, Wayra, Google, 500 Startups, and others are offering free mentoring for female entrepreneurs through Female Force LATAM.



> FT: China and Huawei propose reinvention of the internet with NewIP.

New Yorker: Dressing for the Surveillance Age: Can stealth streetwear evade electronic eyes?

The LatAm Venture Bulletin is the VC/tech newsletter and content platform of
The Association for Private Capital Investment in Latin America.

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