LatAm Venture Bulletin
LatAm Venture Bulletin June 6, 2018

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LatAm Venture Bulletin

> Visa led a US$12.5m strategic investment in Latin American fintech YellowPepper, with participation from existing investors. This is Visa’s first startup investment in Latin America. LIV Capital led YellowPepper’s US$19m Series C in 2015 with participation from Mexico Ventures, Fondo de Fondos, and the IFC.

> #EXCLUSIVE Salesforce Ventures made its inaugural investment in Latin America in RunaHR, a payroll automation platform, in a US$3.5m seed round that included Y Combinator, the founder of Gmail, CTO of Dropbox, executives of Rappi, Nubank, Cabify, and WeWork Latin America, and HR experts including the CTO of Zenefits, former Sales Head of Gusto, and former Product Manager of Gusto. Founder/CEO Courtney McColgan, (former CMO of Cabify) says “The Latin America market is gigantic":

  • "There are 17.5 million SMBs regionally and 4.5 million in our first market, Mexico. Even more important, the market is completely greenfield. Runa is the first business software into SMBs after Gmail and Microsoft Office, so you can imagine the possibilities as we expand our product offering over the next five years."

> Bossa Nova Investimentos made an undisclosed investment in SmartHint, a Curitiba, Brazil-based client retention and product recommendation SaaS platform for small and medium businesses.

> Fondo de Inversión Privado Amérigo Chile Early Stage & Growth, managed by Scale Capital, made an undisclosed investment in Entrega Creativa, a Chilean parcel delivery startup.

> NXTP Labs announces new investments in Graphpath, Chazki, Uniko, Facenote, Pay per TIC, Finciero, and Simple Móviles.

> #PRIVATEEQUITY Advent International purchased a controlling stake of Walmart Brazil.



> DILA Capital announces the final close of its third fund, with MXN$800m in commitments anchored by Mexico Ventures and NAFIN, Mexico’s Development Bank.

  • Recent investments include Ben & Frank, Camino Financial, Kinedu, Creze, and Urbvan.
  • Managing Partner Eduardo Clavé says, “With this fund we can carry out our investment thesis by accompanying the best companies in their different follow-on rounds and fill the gap in the Mexican entrepreneurial ecosystem.

> The Portuguese energy company EDP launched a corporate venture capital vehicle, EDP Ventures Brasil, with initial funds of R$30m.

  • The fund is looking for early-stage startups in Latin America focused on the following energy sector topics: Digital innovation (Blockchain, IoT, Big Data), Client Focused Solutions (Smart Pricing, eMobility, ePayments), Cleaner Energy, Smarter Grids, and Support Areas (HR, Logistics).
  • Rosario Cannata or Cassio Vidigal can be contacted for co-investment opportunities.

> Banrisul, the largest bank in Southern Brazil, is launching Fundo Fintech Ventures, a R$50m fund investing in Brazilian fintechs. Banrisul will contribute R$25m, with partner Gama Investimentos and private investors contributing the remaining R$25m.

  • Banrisul’s Director of IT, Jorge Krug: “Não temos dúvida de que o Banrisul e seus parceiros e clientes têm muito a ganhar com a nossa exposição e uso das fintechs por meio do Fundo.

> On the heels of Monsanto Growth Ventures’ first Brazilian investment in grain marketplace Grão Direto, Alejandro Girardi, Corporate Engagement Director for Latin America, says Monsanto is looking to contribute to the digitalization of agriculture, learn about new services and business models that could enhance their clients’ performance, and attract talented entrepreneurs.

  • Bernardo Nogueira, Investment Partner for Monsanto Growth Ventures Brazil, and Girardi, who is focused on Argentina, can be contacted for co-investment opportunities.

> Wharton Alumni Angels’ Brazil Chapter is looking to invest R$9-12m in local startups this year, according to BTG Pactual president Roberto Sallouti, who recently joined the angel network.



> #EXIT Vox Capital realized their first exit with the sale of Brazilian healthtech company TEM at a 26% IRR. Vox invested R$3m in TEM, a pre-paid card for health services in São Paulo, in 2015.  

> #EXIT Oikocredit, MicroVest Capital Management, and Triodos Investment Management jointly sold their equity stakes in Banco Solidario, providing a full exit for the social impact investors. Banco Solidario was founded in Ecuador in 1996 and provides loans to SMEs among other financial products and services.

> Engie Factory México announced four undisclosed investments (between US$50k-US$1m) in electric mobility and decentralized energy.

> Reuters: Goldman, World Bank fund for women entrepreneurs hits $1 billion in investments.

> Impact entrepreneurs under 30 years old can apply for the GSM Millennial Honors award by June 20. Criteria: Impact ventures must be 2+ years old with US$1m+ in revenues or earned fees, and must demonstrate measurable impact, scalability, and sustainability.

> Innovate UK, through the Colombian Prosperity Fund Programme, will invest up to £3m to enable UK and Colombian partners to address agricultural challenges in post-conflict and conflict-affected regions in Colombia. Apply by July 18.

> Village Capital is looking for early stage entrepreneurs in Latin America that are helping improve financial health to join its FinTech: LatAm 2018 investment readiness program. Apply here.



> Medellín-based media incubator ESPACIO acquired The Bogotá Post for an undisclosed amount.



> Crunchbase News: With Brazil Leading The Way, VC Investment In Latin America Has More Than Doubled

> Ozy’s The Rise of Mexico’s High-Tech Entrepreneurial Generation features Yogome, Variv Capital, and others.

> TechCrunch: Latin America’s Movile is Quietly Building a Mobile Empire, with more than 150 million monthly active users of its apps and estimated revenues over US$240m:

With no shortage of cash, Movile now has plans to put more than half of its latest US$53m Naspers investment into Rapiddo Marketplace. Movile believes they can transform the Rapiddo Marketplace into a one-stop-shop for a variety of consumer transactions ranging from food delivery and event tickets to refilling mobile credit and hailing rides. Included in this ambitious plan is a payments platform similar to PayPal called Zoop, which handles all digital payments and makes the Rapiddo Marketplace a single platform that can integrate many — if not all — of Movile’s other applications.

> Economía y Negocios looks at Chilean investment activity from Ayala Capital Partners, Dadneo, Fundación Chile, Genesis Capital, Manutara Ventures, Masisa Lab, Mountain Nazca, and Scale Capital in Inversiones de venture capital en carpeta suman más de US$140m.

> El Financiero: Amazon opened an office in Buenos Aires as part of its expansion strategy into the region and highlighted strong interest in the region.

> Crunchbase News: Meet Three Latina Tech Founders Challenging Diversity Statistics. See also: Cecilia Corral’s list of Latina tech founders.

> NiemanLab looks at fact-checking the Mexican election on WhatsApp:

Verificado 2018, a collaborative election reporting and fact-checking initiative led by Animal Político, AJ+ Español, and Pop-Up Newsroom, is trying to intervene in the spread of fake news on WhatsApp — and having some success.

> TechCrunch: Desperate for jobs, Venezuelan immigrants turn to ride-hailing services across Latin America. (Not the first time rideshare drivers have encountered violence in the region).

> #PRIVACY New York Times says Facebook Gave Device Makers Deep Access to Data on Users and Friends. Facebook VP of Product Partnerships, Ime Archibong, explains Why Facebook Disagrees with The New York Times.



> Nubank co-founder and CMO Cristina Junqueira makes Pitchbook’s list of 16 unicorns with female founders.

> Mobile penetration in Latin America should be roughly 71% in a couple of years, according to a new research paper by INSEAD professor of strategy Felipe Monteiro.

  • Monteiro gives some clues as to why the battle for transportation and delivery is heating up in LatAm: “If you take the Brazilian population, 86% is urban [based]; Argentina, 92%; Chile 90%; Mexico 80%.”

> Fortune: "More than $0.40 of every dollar consumers spend on the Internet already goes to Amazon—an astonishing sum. And yet it appears Bezos is not satisfied leaving behind the roughly 85% of retail that still happens in brick-and-mortar stores… Amazon has the potential to be part of every single purchase we make.”

> A Harvard-funded study of the death toll in Puerto Rico from Hurricane Maria estimates the real number is more than 70 times the official estimate.



> Colombia is considering new regulations for private capital funds to allow for issuing of bonds and trading of holdings in secondary markets.

> Axios goes into the global impact of Europe’s GDPR data privacy legislation.

> #BADNEWS Axios: Trump proposes ending rule allowing foreign founders into US:

The Department of Homeland Security has officially proposed cancelling the International Entrepreneur Rule, which allows foreign entrepreneurs to legally stay in the U.S. to build their companies, provided they meet a host of business requirements.


> Priority member registration is now open for the LAVCA Venture Investors Annual Meeting in New York on September 27.

> Join LAVCA's Director of Research Eduardo Roman for a panel on VC and real estate tech at the Proptech LatAm Summit on June 7 in Santiago, Chile. LAVCA has a limited number of complimentary passes for member investors. Contact to reserve your pass.

> Google Cloud Platform is bringing its free Introduction to Machine Learning Bootcamp to Colombia for the first time today, June 6. Details here.

> LAB4+, el Foro de Emprendimiento e Innovación de la Alianza del Pacífico, will host an investor meeting on June 12-13 in Medellin. Tech investors interested in meeting entrepreneurs from Chile, Colombia, Mexico, and Peru can register here.

> Dadneo and Xcala are organizing an investor forum called CRECER on June 14, with support from BID and FOMIN and participation from Gunter Pauli, creator of the Blue Economy. Details here: registration is free.

> Finnovista and Visa invite fintech entrepreneurs to apply for Visa’s Everywhere Initiative in LatAm and US$50k in prize money. Apply by June 15.

> Ayllu Solar, with support from ChileGlobal Ventures and WAKI Labs, launched La Fiebre del Sol 2. The program seeks solar energy startups from Chile, Argentina, Peru, and Bolivia to deliver solutions in Chile’s agro industry, trade, and urban development sectors. Selected startups will receive up to CLP$60m in financing. Apply by June 17.

> Chile will host its first corporate innovation summit, InnovaSummit, on June 21. Details here.

> Argentine startups can apply to present at Foro de Capital para la Innovación - región litoral centro. Apply by July 6.



> SocialDiabetes is a Barcelona-based healthtech platform for diabetes patient care, focused on Mexico and Spain, with funding from ALLVP and the European Commission. 

READ 📰LAVCA's interview with co-founder and CEO María Salido, where we learn about the opportunity to reduce diabetes prevalence in Mexico, a country with the highest rate of diabetes among the OECD countries:

Los pacientes con diabetes sienten que su vida no es flexible y se sienten inseguros. Con SocialDiabetes adquieren flexibilidad en la forma de comer y pueden calcular la dosis de insulina óptima en cada momento, lo que incrementa radicalmente la seguridad.

Por otro lado, los profesionales visitan a los pacientes cada X meses, y entre visita y visita, no tienen información sobre los mismos. Con el sistema de telemedicina, el paciente puede ahorrarse viajes y visitas presenciales y los profesionales pueden anticipar complicaciones
y priorizar la atención.

En definitiva solventamos el problema que tienen tanto pacientes como profesionales de una gestión ineficiente y poco eficaz, debido a la gestión manual y presencial de la Diabetes.

Fernando Lelo de Larrea at ALLVP adds: “We expect the healthtech sector in Latin America to grow exponentially in the next few years, and believe María and Victor are the ideal leaders to leverage this opportunity."

> Broota is a Chilean equity crowdfunding platform that has crowd-raised over US$6.1m for ~30 projects since 2013 (including a US$200k fundraise for Broota itself). Broota co-founder and CEO Jose Antonio Berrios says Broota is trying to solve one of the biggest problems facing startups in the region, access to capital:

Latin America has twice the population of US, but only 1.3% of the amount of funding to startups. If I back a Kickstarter project, my goal is to obtain my reward. In a lending platform, as an investor my goal is to obtain the funds back plus interest. In equity crowdfunding, there's a long term relationship; the goal of the investor is for the startup to succeed in order to obtain profits of its investment.

Equity crowdfunding is not yet regulated in Chile, according to Berrios.

> Courtney McColgan, Founder of RunaHR, a cloud-based payroll and HR platform for SMBs in Latin America with a recent investment from Salesforce Ventures, explains how YCombinator helped her raise funding quickly and join “the best network I am part of, hands down”:

As a Latin American startup, many investors in Silicon Valley won’t even take your meeting. It doesn’t matter how how amazing the opportunity, the answer is no. As a YC company, we were able to change that conversation. We became a “YC company doing a Latin American play” versus just “a Latin American company.” The difference may sound subtle, but its important. I can say that no investor ever said no to meeting with us.



> Michael Nicklas of Valor Capital talks about the global applicability of LatAm startup tech:

The problems that are being addressed in this middle market emerging economy is more similar to the types of problems you see around the globe in countries such as China, Russia, South Africa, and Turkey. So, in some ways, the solutions being created here have more applicability around the globe than those created out of Silicon Valley.

> Mary Meeker’s 2018 internet trends report says China is catching up as a hub to the world's biggest internet companies:

Currently, China is home to nine of the world's 20 biggest internet companies by market cap while the US has 11. Five years ago, China had two and the UShad nine .... Immigration remains important for US tech companies. More than half of the most highly valued tech companies in the US are founded by first- or second-generation immigrants.

> Melinda Gates wants to invest in funds who over-index on women-led and minority-led businesses: "I am a big believer in disruptive innovation, but it's been incredibly disappointing to watch how few women-led businesses are getting funded.” #CHANGETHERATIO



> NPR interviews Data & Society Researcher Jacob Metcalf in Should a machine have to tell you if it's a machine?

Something is accomplished by the fact that it's not obvious to the person on the other end that they're talking to an automated machine. None of that conversation required the machine to insert 'ahs' and 'ums' as if it was a human. So then why are they trying to imitate a human? Is it because it looks cool? Or is it because the product's more effective if it's deceptive?


The LatAm Venture Bulletin is the VC/tech newsletter and content platform of the Latin American Private Capital Association.

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