This article is part of the LatAm Tech Weekly Series, written by Julia De Luca and powered by Nasdaq. Through Nasdaq’s global network, we partner with Latin American companies to support their entire business lifecycle to elevate their brand and access the global markets. Learn more about Latin American Listings here.
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In-person events are back! Latitud will be hosting its first Vamos LatAm Summit on September 22nd. VLS is a full-day event for tech startup founders, investors, and builders from all over Latin America to connect. I will be there and also managed to get a 25% discount on the ticket for my readers! Don’t miss out, use the code julialuca25 and buy your tickets here. There are limited spots, so hurry! The link will expire this thursday, September 8.
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Cubo Itaú, the biggest tech ecosystem in Latin America, is also doing an event on September 28th. CuboConecta is back - and you can join live from anywhere by signing up here. If you are a venture capital fund and would like to join in person, respond to this newsletter!
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Brazil Chamber of Commerce is hosting an in-person event on September 6 in New York: Business Opportunities in Brazil: The Current State of Play and What Lies Ahead - it will be a discussion on the factors driving the surge of economic activity in Brazil, including the interplay with other emerging markets, the main sectors behind the growth, and the challenges and opportunities for foreign investors. The event is sponsored by Mattos Filho and Nasdaq.
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Opinions expressed here are solely my own and does not represent those of people, institutions, organizations that I may or may not be associated with in any capacity, unless explicitly stated.
Share Weekly Tech Update - Julia
Now on to usual market overview: and suddenly we are in September! Only 14 new unicorns were created globally in August, which is a small increase over the number seen in July, but still down significantly from the figure seen in 2021 and early 2022. Nevertheless, notable rounds still occured and Latin America’s private sector and entrepreneurs have shown an ability to rise above it all and succeed. In 2022 YTD, there are nearly 50 unicorns in the region. Brazil has the largest number of unicorns, with Mexico and Argentina following close behind. One clear sign that the region is going well was Google’s recent announcement that it will invest USD 1.2 bn in the region focused on digital infrastructure, digital skills, entrepreneurship and inclusive sustainable communities. Google also highlighted that its Google for Startups campus in Brazil has helped 450 startups and helped to develop 13 unicorns.
On to specific stages, looking at CB Insights most recent Tech Valuations Report, late-stage investors are risk-off right now. The fact is that so far in 2022, they’ve pulled back on Series D and E+ rounds, with late-stage deal volume falling 17% QoQ and according to data, projected to fall 29% YoY by year-end. For those deals that do happen, investors increasingly are negotiating greater downside protection. This is being seen on a global scale. The percentage of later-stage deals that require prioritized payouts for new investors increased to 41.4% — up 8.3 percentage points from 2021.
Still on valuations - and factors that affect them - the 10Y is back up to 3.3% after Powell spoke last Friday - he reiterated the Fed’s commitment to fighting inflation, and acknowledged this will cause “some pain.” Let’s see how much pain it will be... As we all know, what happens in the U.S. directly affects global sentiment, and thus, Latin America.
Monday
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Itaú Unibanco, one of Brazil's leading financial institutions, will develop a "decentralized finance (DeFi)" platform whose tokens will be able to emulate stablecoins paired with fiat currencies such as the BRL and the U.S. Dollar.
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Pagaleve, Brazlilian buy now, pay later (BNPL) fintech company that uses Pix to split purchases into four installments without interest and without the need to use a credit card raised an undisclosed amount in a Series A round with investors such as Endeavor and Sales Force Ventures.
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Mexico’s Plerk raises USD $12mm led by SoftBank Spinoff Upload Ventures- the employee-wellness startup’s founders were selected by Y Combinator but adapted the business as a result of the pandemic - it is a SaaS-based platform for employee benefit plans.
Tuesday
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The Brazil based cryptocurrency exchange Digitra.com announced a technology agreement with Nasdaq that will enable 24/7/365 robust and frictionless trading on Digitra.com for retail and institutional investors worldwide. Founded by the cryptocurrency pioneer Rodrigo Batista, Digitra.com offers trading in Bitcoin, Ethereum and USDC, with future extension to additional 50 asset classes and coins by end of the year.
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Bankme, Brazilian credit-as-a-service platform for SMEs, raised a USD 1 mm seed round led by DOMO Invest with participation from Apex Partners, Bamboo Capital Markets, along with various angel investors. Their “mini bank” product allows companies to build their own financial structures, without the need to create securitization companies or Credit Rights Investment Funds.
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Neoway and B3 are launching a relationship program with startups: Smart. It aims to find companies that help Neoway expand its product offering.
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Quinto Andar announced the launch of a new type of contract, called “Rent Without Administration”. In it, the owners will be able to do their management directly with the tenant, using Quinto Andar only as a platform to promote listings.
Wednesday
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Teamcore, a startup from Chile that offers retailers and CPGs a platform to gain visibility into inventory rotation and critical insights into product availability, was acquired by Accel-KKR for an undisclosed amount.
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Caju, a Brazilian startup focused on flexible corporate benefits, announced its Series B of USD 25 mm aimed to boost the use of the company's credit card in Brazil. The investment was led by K1 Investment Management.
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Agroadvance, Brazilian edtech focused on agribusiness, announced a funding round led by SP Ventures. The size of the round was not disclosed, but the company expects to reach BRL 50 mm in revenue per year looking forward.
Thursday
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Itau Day: The co-chairmen of the board of directors of Itaú Unibanco, Pedro Moreira Salles and Roberto Setubal, emphasized that the “bank is coming off the defensive stance and going on the attack”. According to Roberto, Itaú is going on the attack to conquer new spaces in the market and, thus, seek to compete “pari passu” with the new entrants, which brought challenges in terms of customer satisfaction.
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Totvs acquired 60% of Feedz Technology, a Brazilian cloud-based platform aimed at improving company culture, employee satisfaction and turnover reduction, for BRL 66mm. The contract also predicts the acquisition of the remaining 40% of the company in the first half of 2025 – provided certain metrics and clauses are reached.
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Inspired by Brazil’s PIX, the Federal Reserve is reportedly planning a similar payments model. The so-called “FedNow” is supposed to be launched in 2023, with an instant payments model similar to Brazil’s PIX.
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Draftea, a Mexican startup that offers a daily fantasy sports (DFS) platform to host Mexican fantasy soccer matches raised USD 20mm Series A with investors such as Kaszek Ventures, Bullpen Capital and Sequoia.
Friday
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R2, the Mexico City based embedded lending infrastructure platform, raised a USD 15 mm Series A round led by Google’s Gradient Ventures with participation from FEMSA Ventures and PayU, as well as prior investors General Catalyst, Adam Neumann’s 166 2nd, and Magma Partners. The company enables small businesses to have access to capital through the platforms they use to buy and sell everyday.
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Two months after announcing the creation of an M&A vertical, Frete.com announced its second acquisition: Rotas Brasil, a system of routes and pricing of Brazilian national tolls.
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Mercado Livre raised BRL 1 bn in its first issuance of real estate receivables certificates (CRIs). The restricted public offering, was carried out in two series and the funds will be invested in the expansion, revitalization and modernization of its logistics structure in Brazil. Itau BBA coordinated the offer as lead.
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OZ technology, Brazilian SaaS focused on restaurant and bars raised a seed round with ABSeed of BRL 7,5 mm.
On Another Note
What did I learn from readers?
A reader sent me a great report by CB Insights on the Game Changing Technologies of 2022.
The article highlights 9 emerging technology trends that have world-changing potential.
These include:
What am I reading?
What did I listen/watch?
Quote of the week:
“All generalizations are false, including this one” - Mark Twain
Originally published on my Substack.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
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Julia De Luca
Julia De Luca is a Tech Manager within Itau BBA’s Investment Banking arm, primarily responsible for the coverage of global venture capital and growth funds. With more than 10 years of experience in finance, her focus is to connect global players to the Latin American tech ecosystem – with content, intel and opportunities. Julia co-authored the book Brazil Fintech and constantly writes columns on the topics of open banking, venture capital investment, regulation and LatAm tech trends. Julia started her career as Global Investor Relations at Gávea Investimentos and also spent a couple of years at Stone Co. She holds a degree in Economics from Pontificia Universidade Católica (PUC-Rio).
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