LatAm Venture Bulletin

 
 
LatAm Venture Bulletin October 3, 2018

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LatAm Venture Bulletin
 

LAVCA WEEK



venture investor meeting 2

LAVCA hosted its Venture Investors Annual Meeting in New York City on September 27, 2018, with record attendance among early-stage tech investors, and participation from notable venture-backed startups and leading global tech companies.

Special thanks to LAVCA Members in attendance, program sponsors FOMIN, Silicon Valley Bank, Omidyar Network, Facebook, Google, Telefonica Open Innovation, Riverwood Capital, and founding members of the Latin American Tech Growth Coalition. Click here for photos and program highlights.

 

STARTUP SURVEY

ūüďč LAVCA, with the support of Facebook, is conducting the first-ever survey of Latin American startups.

We want to tell the world how many jobs startups in the region are creating, what the gender diversity is among startup founders, challenges for startup growth, and the impact startups are making in their market, sector, and community. Results will be shared globally to help put Latin American tech innovation on the map ūüóļÔłŹ.

All qualifying respondents will receive:

‚úĒÔłŹ ALL LATIN AMERICAN STARTUPS ARE INVITED TO PARTICIPATE IN THE SURVEY.¬†This survey is multiple choice and should take a startup CEO or founder no more than 12-15 minutes to complete.¬†

 
DEALS

> Astella Investimentos led a R$25m investment in Omie, an ERP platform targeting small businesses. Angel network Verus Group invested previously.

> Quona Capital, monashees, and Chromo Invest made a R$20m investment in Brazilian lending fintech BizCapital.

> DILA Capital led an undisclosed Series A investment in Dvdendo, a Miami-based micro-investing platform, with participation from Ideas y Capital and others.

> IGNIA led an undisclosed investment in Kinedu, a Mexican edtech platform for early childhood development, with participation from BeCurious Partners, The Stanford-StartX Fund, and existing investors DILA Capital, Promotora Social México, and Stella Maris. NXTP Labs, Social Capital, and 500 Startups invested previously.

> Canary made an undisclosed investment in EasyDeco, a Brazilian interior design platform.

> Cedro Capital invested R$6m in Gira, a risk management platform for agribusiness receivables, through the Venture Brazil Central fund.

> Primatec invested R$5m in FullFace, a Brazilian facial recognition startup working with corporate clients.

> DOMO Invest led a R$4m investment inTurbi, a car-sharing platform launching in São Paulo.

> DOMO Invest also made a R$3m investment in Goomer, a Brazilian self-service ordering platform for restaurants.

> Global Founders Capital acquired 10% of Brazilian CaaS platform Zen Finance.

> Orbis Ventures led a US$440k investment in Ultracasas, a Bolivian real estate platform, with participation from Seedstars and Taris.

> Magma Partners made an undisclosed investment in Fanatiz, a football streaming platform.

> Scotiabank made an undisclosed investment in Zinobe, a Colombian consumer lending platform, through a joint investment fund with QED Investors.

> Mexican family office Arzentia Capital made an undisclosed investment in dental clinic network Dentalia. ALLVP led a MXN$100m Series B in 2016.

> Artesanal brewery Cervejeria 3Cariocas raised R$3m on equity crowdfunding platform Eqseed.

> Brazilian IT firm SPRO IT Solutions made undisclosed investments in B2K (climate sensors) and Vexpro (cloud solutions).

>¬†Amparo Sa√ļde, a Brazilian healthtech platform for affordable care, received an undisclosed investment from pediatric doctor and Ita√ļ heir Jos√© Luiz Set√ļbal.

 

EXITS/IPOS

> Kroton, Brazil’s largest for-profit education firm, received regulatory approval to acquire a controlling stake in Somos Educação for US$1.34b, providing an exit to Tarpon.

  • In 2017 Somos Educa√ß√£o acquired AppProva, generating a net IRR of 51% for AppProva investor e.Bricks Ventures, and acquired Stoodi for a reported R$15m.

>¬†ūü¶Ą #UNICORNS Brazilian learning systems provider Arco Educa√ß√£o, a company backed by General Atlantic , IPO‚Äôed on the Nasdaq last Thursday, and was valued at over US$1b by the end of trading that day. General Atlantic did not exit any of its investment in the company.

 

FUNDS

> Chilean VC Genesis Ventures announced plans to raise a new US$100m VC fund.

> Mexican startup incubator Agave Lab announced plans to raise a second VC fund with a US$20-40m target to accelerate projects including Digitt, Fondeo Directo, Regiztra, VoxFeed, and Easy Lex.

 

IMPACT

> IDB Invest and OPIC partnered to launch Fund Mujer, the first gender-focused fund for Latin America and the Caribbean, to invest in female entrepreneurs, companies with a significant share of women leaders, and firms that generate jobs or consumer products for women. The fund has a US$200m target and is expected to be comprised of 70% equity / 30% debt.

> Oikocredit, Fiinlab, and Vox Capital made an undisclosed Series C investment in Avante, a Brazilian fintech offering microcredit and mobile point of sale to micro-entrepreneurs in over 1,100 Brazilian cities. Vox and Fiinlab invested R$38m in 2017.

> Creation Investments Capital Management made a MXN$250m investment in Pluscorp, a Mexican financial services company.

> Adobe Capital and ST Capital made an undisclosed investment in Mexican clean energy company HEG.

> Diario Financiero says Chile is gearing up for more social impact investment.

> FT looks at measuring impact in Impact investors shoot for clearer goals:

At its core, impact investing is an emerging field of asset management where environmental or social outcomes are valued as highly as financial returns. The close monitoring and careful analysis that go into making sure an investment achieves a financial gain are applied to the sustainable or sociological targets as well.

Unlike philanthropy or other forms of ethically motivated investing, such as green bonds, investors in impact funds do not expect to give up financial upside just because they have other objectives.

> The New York City Bar Association presents Perspectives on ESG and Impact Investing in Latin America on October 16 in New York.

> Save the date for the GIIN Investor Forum, October 30-31 in Paris France.

> Save the date for FLII Central America and the Caribbean on November 7-8 in Guatemala.

 

NEWS

> Expansión looks at the growth of angel investors in Mexico.

> El Economista: Fondos de inversión chinos voltean a México.

> The Next Web: A new ecommerce report says Mexico is leading the region by annual consumer spend.

> Economía y Negocios looks at the growth of Corfo-backed accelerators in Chile and the funding gap faced by Chilean entrepreneurs.

> Uber launched its first digital wallet in Brazil, along with an app for slower data connections. ZDNet says Brazil is Uber’s #2 market, with 22m+ users and 500k+ drivers.

> Airbnb generated over US$380m in revenues to Brazilian hosts since launching in 2014, with over 180,000 properties currently listed.

> WeWork is expanding aggressively in Chile.

> Facebook chose Colombia to test out its new dating feature.

> Google launched an initiative to measure carbon emissions in Buenos Aires.

> Kara Swisher goes inside the Instagram founders’ departures from Facebook. Forbes interviews WhatsApp founder Brian Acton about his departure.

 

STARTUPS

> Cornershop co-founder Oskar Hjertonsson shares some thoughts post-acquisition:

Imaginarse que ese ~25B IPO de Spotify le hubiera pasado hace unos meses a una empresa con HQ en Chile o México... cientos de empleados, muchos jóvenes, con relevante experiencia que de golpe se vuelven inversores ángeles y fundadores de nuevas empresas...

> Valor says Neoway is preparing for IPO on the Nasdaq and B3.

> Panamanian local experience app Wisy is opening an office in San Francisco.

> Check out LAVCA’s list of 256 Latin American startups with at least US$1m in VC funding, verified by LAVCA. Sort by geo, sector and stage of investment.

 

TECH POLICY

> iupana talks about regulatory barriers to small business lending in Brazil.

> HBR unpacks uninformed consent and digital privacy:

Let’s be frank: People are bad at making decisions about their private data. They misunderstand both costs and benefits.... And whether by design or accident, major platform companies and data aggregators have structured their products and services to exploit those biases, often in subtle ways.

 
PEOPLE & PROGRAMS

> LAVCA President Cate Ambrose is moderating a discussion on investment opportunities in Latin America with Qualcomm Ventures, Angel Ventures Mexico, Innova Capital Fund, and Clip at the IFC 4th Annual Emerging Markets Venture Forum on October 4th. 

> Finnosummit Miami is Oct. 4-5. LAVCA members and network have access to a 20% discount using code LAVCA20.

> Smart Capital is Oct. 22-23 in Medellin. Details here.

> Corporación Ventures is hosting the Latin American Ventures Summit on Oct. 30-31 in Cartagena, Colombia. Access the agenda.

> SAVE THE DATE for WeXchange, a forum to connect high-growth entrepreneurs with mentors and investors, November 6-7 in Lima, Peru.

> SAVE THE DATE for Scotiabank’s first LatAm Ecommerce and Technology Forum on November 6 in Mexico City to connect its investment clients with leading FOs, VCs and startups in Mexico and across the region. Email Marcela Villarreal (marcela.villarreal@scotiabank.com) to request an invitation. 

> Join the NVCA for their first conference on Emerging Technology Meets National Security, Nov. 14 in Washington D.C.

> Puerto Rican accelerator Parallel18 is accepting applications for its sixth cohort. Apply by Oct. 15 for a US$40k grant and five months on the island.

> Globant Ventures and the British Embassy’s Department of International Trade launched the Latin America Createch Competition to support creative technology entrepreneurs in Digital Media, Animation, Gaming, and Immersive Technologies. Entrepreneurs from Colombia, Mexico, Chile, Brazil, and Argentina can apply here to receive a trip to the UK to participate in London Tech Week and Createch and receive advising services.

> Summit Series, an American organization that hosts a series of hyper-exclusive entrepreneur/innovator gatherings, is extending fellowships for entrepreneurs in emerging markets who are working on innovation in Impact and Mobility/Transportation. Apply here.

> Brazilian BPO CMTech launched an acceleration program for startups innovating around smart cities, IoT, smart energy, logistics/delivery, service desk and field service, and chatbots.

> Google Launchpad accepted eight startups for its next program in São Paulo: EasyCrédito, Fhinck, Idwall, Looqbox, Marmotex, N2B, Nagro, and TerraMagna.

> Itali Pedroni Collini joins 500 Startups as Director of Operations for Brazil.

> Monica Simó Black, former Partner at Chan Zuckerberg Initiative, joined The Venture City as a Partner.

> Facebook promoted Mauren Lau as the company’s new Head of Latin America.

 

ENTREPRENEUR SPOTLIGHT // KUESKI

LAVCA caught up with Kueski Founder & CEO Adalberto Flores at Finnosummit Mexico last month. Kueski is an online micro-lender for the middle class of Mexico that has disbursed over US$100m across almost 800k loans to date.

Flores says the US$100m threshold is a drop in the bucket compared to the total market for consumer credit in Mexico:

We estimate the market value for lending alone (single payment and installments products) to be US$8.3b. If we were to add the value of the rest of the products of the consumer credit ecosystem, i.e. credit, debit and pre-paid cards and purchase finance, we'll be talking of a US$46.4b opportunity.

Most Mexicans still don‚Äôt have bank accounts, although Flores says the number has grown from 27% to 38.3% of the population over 25 since 2011: ‚ÄúEven though we might not be fully responsible for the increase on financial inclusion, we're certainly participating by giving access to an underserved population.‚ÄĚ

Unbanked Mexicans otherwise turn to family and friends, credit cards, savings clubs or stores (buying on layaway) for short-term loans. While Kueksi charges a weighted average interest rate of 25%, borrowers are paying closer to 28% for credit card interest and 60-69% for personal loans under US$1250.

Flores sees adoption with two main segments of clients so far: millennials and female entrepreneurs. Both make an average of US$670/month, borrow about MXN$2500-3000, and repay the loans in about three weeks with a 10-11% default rate (or about half the rate for credit cards). The female entrepreneurs tend to be mothers, with an average of two dependents.

Flores says Kueski’s current relationship with banks is limited, although the company is exploring integrations that would allow Kueski to open bank accounts for clients, or to negotiate access to declined customers.

Kueski has raised almost US$20m in equity from investors including Variv Capital, Crunchfund, Rise Capital, Core Ventures Group, Richmond Global Ventures, Tuesday Capital, Angel Ventures Mexico and others, and US$25m in debt from Victory Park Capital. The company employs about 130 people and recently hired a new CTO, Jaime Romero.


 

INVESTOR POV

>¬†Miguel Arias, Global Director of Telefonica Open Innovation, talks about Wayra‚Äôs shift in strategy and the need for corporates to perpetually reinvent: ‚ÄúIMHO the real value a corporation can offer a savvy entrepreneur is joint business generation.‚ÄĚ

> China has overtaken the US in terms of VC investment in startups by dollars (but not by number of deals).

> Valor says Brazilian angels invested almost R$1b in startups in 2017, according to data from Anjos do Brasil.

> Bloomberg: Masayoshi Son, SoftBank, and the $100 Billion Blitz on Sand Hill Road:

In less than a year since the fund first began making investments, it has already committed $65B to acquire big stakes in Uber, WeWork, Slack, and GM Cruise. Son tells Bloomberg Businessweek that he plans to raise a new $100B fund every two or three years and will spend around $50B a year. For perspective, in 2016, the entire U.S. venture capital industry invested $75.3B, according to the National Venture Capital Association.

> Institutional Investor interviews hedge fund-er Jim Chanos on his three-year bet to short Tesla.

 

CRYPTO

>¬†Chilean cryptocurrency exchange CryptoMKT partnered with MercadoPago, MercadoLibre‚Äės payments processor, to accept transfers in Argentine pesos.

> Andreessen Horowitz invested in stablecoin project Maker. Kathryn Haun, a former digital currency task force leader for the US Justice Department, co-leads Andreessen’s crypto investments.

 

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

Have news we should include? Please email news@lavca.org.



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