LatAm Tech Weekly: Insights From Bay Area and How It Affects LatAm Tech

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.

I hope you're all well. This week's edition is a tad more concise due to my recent trip to the Bay Area. We met with leading figures from prominent venture capital and growth funds and also with major tech companies now setting their sights on Latin America. 

It's genuinely encouraging to witness the increasing interest in our region. The depth of our discussions showed investors are keenly attentive to developments here. Among emerging markets, Brazil is particularly noteworthy, thanks to its progressive economic landscape, its pool of talent, and its position in the technology lifecycle.

To delve a bit deeper - over the past decade, Brazil has made commendable strides in setting up essential technological infrastructure, such as fiber optics, telecom, and 4G networks - thus allowing tech startups to emerge. While we have seen already the growth and success of several tech companies, there's a vast reservoir of untapped potential still waiting. Unlike the more saturated U.S. market, Brazil presents a unique growth opportunity, offering promising returns for prospective investors.

An interesting development worth noting: the pandemic significantly accelerated the digital shift. As a result, B2C platforms experienced rapid growth. Now, with the world gradually returning to normalcy, there's an evident demand among consumers for businesses to keep pace with technological advancements, pushing the B2B sector into the spotlight. Investors are keenly watching this space. And as I've mentioned here a couple of times, the Brazilian Central Bank continues to foster an environment conducive to innovation and competition. While there are indications of possible consolidations in the fintech domain, it remains an area of high interest for both funds and tech corporations.

While there are always outliers in any observation, these are my primary insights from the trip. It was wonderful to engage directly with industry leaders in the Bay Area, the epicenter of technological advancements where innovative ideas are conceived and nurtured.

Now, let's transition to this week's headlines. For those who follow my Twitter, these updates will mirror the posts I've shared daily as I did not have time for further reading. Let's get started! 

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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.

Monday

• Educbank, a fintech that specializes in receivables anticipation services for basic education institutions, has secured R$ 70 million to enhance its operations. Notably different from their Series A funding acquired the previous year, Educbank chose debentures this round, fully backed by school tuition fees. This endeavor was structured by Itaú BBA.

• Beacon, a Brazilian fintech which aggregates 37 startups, boasts of 90 tech founders and has over 50 investors onboard was on the spotlight this week. Founded by Igor Piquet and Ricardo Duarte, Beacon aspires to serve as a private banking service tailored for startup founders. Notable investors include Paulo Veras, formerly of 99, Sergio Furio of Creditas, and Marcelo Lombardo of Omie.

• Tractian has successfully raised R$ 230 million, with its valuation now standing at R$ 1 billion. This Series B funding for Tractian followed a phase of rapid growth and included the divestment of Critrino's stake to Monashees for R$ 50 million.

• Mercado Livre has introduced a free streaming service for movies, named Mercado Play. The primary intention behind this move is not to challenge the prevailing streaming services but to enrich Mercado Livre's existing ecosystem.

• PayPal is introducing a stablecoin, marking the debut of such a coin by a major financial institution. This could potentially catalyze the slow adoption pace of digital tokens in payments.

• NG.Cash, a digital wallet tailored for Generation Z, has completed its restricted offer phase. It now progresses to the full operational stage as an indirect affiliate of the Pix system. The Central Bank has authorized the fintech to extend this service across its entire clientele.

• Neuralink, an initiative by Elon Musk, has secured a Series D funding round amounting to $280 million. This capital infusion, spearheaded by Founders Fund, follows closely on the heels of the company gaining approval for its inaugural clinical trial involving humans.

• Thought Machine is extending its reach to South America via Chilean Cordada. Cordada, which operates in Chile, Peru, and Mexico, plans to leverage Thought Machine’s vault platform to enter new markets and expand its loan solutions.

• Serasa Experian has finalized its acquisition of Mova, a peer-to-peer credit establishment. This transaction was initially announced in May and was pending endorsements from Cade (entity whose main role is to authorize and monitor operations between companies, such as acquisitions) and the Brazilian Central Bank.

Tuesday 

• Legal professionals in Brazil are showing keen interest in potential unicorns, with law firms adapting their models to cater to budding businesses that demonstrate substantial growth potential.

• Bossanova has set its sights on committing R$ 26 million towards startups in the latter half of the year. During the first six months of 2023, the venture capital firm has already funneled investments into roughly 50 startups, with an average ticket size of R$ 350,000.

• Amazon has launched its inaugural credit card, meticulously designed to integrate with its e-commerce entity, Prime. Introduced recently, this card not only waives an annual fee but also provides direct cashback rewards, which could reach up to 5% for subscribers of the platform.

• Binance has successfully secured a license to operate a cryptocurrency exchange in El Salvador. This represents a landmark achievement for Binance and is emblematic of its stature in the cryptocurrency arena.

• As SoftBank strategizes its foray deeper into the domain of AI investments, the conglomerate has reported an unanticipated sequential quarterly loss, compounded by an ongoing dip in its established investment segment.

• SaaSholic, a venture capital firm with a niche focus on B2B SaaS within Latin America, recently wrapped up an oversubscribed funding round amounting to $10 million. Renowned SaaS entrepreneurs from the region feature prominently among its supporters. Its trio of partners—Diego Gomes, William Cordeiro, and Gustavo Souza—hold a distinguished track record in both managing and investing in LatAm SaaS entities.

Wednesday 

• Clara, a fintech from Mexico, is undergoing significant transitions. With its relocation to São Paulo, it aims to prioritize Brazil as its central market. Further bolstering its position, Clara has obtained authorization from the Central Bank to function as a Payment Institution.

• iD\TBWA, a marketing agency from Brazil, has innovatively amalgamated data analytics, contemporary technological features, and creativity to construct growth platforms. This strategic synthesis has aided prominent brands, including Allianz, Audi, Claro, and Walita, in their campaigns.

• In a strategic move, Albo, a prominent Mexican neobank, has acquired delt.ai for USD $20M, thereby enhancing its comprehensive financial service offerings for both individual consumers and SMEs.

• Asaas, Brazilian fintech specializing in digital accounts for SMEs, secured R$ 50 million in its recent FIDC operation. This follows a substantial equity round of R$ 100 million in June, with Itaú BBA being an integral partner in fund structuring and quota distribution.

• Itaú harnesses the prowess of Artificial Intelligence for meticulous scrutiny of multitudes of legal documents. The AI is adept at pinpointing crucial elements, facilitating efficient document categorization.

• Amazon Mexico has introduced the second iteration of 'Lógralo Online', a dedicated endeavor to empower women entrepreneurs in small-scale enterprises by offering comprehensive training and support.

• Flash has inducted Eduardo Gouveia, the erstwhile CEO of Cielo, as a Senior Advisor while promoting Guillermo Gomez, envisioning an expanded market share for the startup.

• Tivit, navigating the intricate B2B tech landscape, capitalizes on its seasoned experience. The Brazilian firm has seen revenue growth despite the burgeoning presence of startups proffering tailored solutions.

• OpenAI unveils 'GPTBot', a state-of-the-art tracking tool poised to augment AI models in accuracy and security dimensions.

• VLI, a logistics firm, marks its foray into venture capital by investing in Brasil Agritest. Concurrently, the company is devising a corporate venture capital strategy aimed at acquiring minority shares in logitechs and agtechs.

• Healthtech Update: The Gates Foundation has identified Munai, a Brazilian startup, for the pioneering project 'Hospital ChatGPT', integrating generative AI in the realm of healthcare.

Thursday 

• Claranet Brazil, a cybersecurity-centric tech firm, is targeting a formidable R$ 1 billion EBITDA by 2028. As a testament to its growth aspirations, the company has already integrated four acquisitions into its operations.

• In a pivotal move, the Central Bank has introduced 'Drex' as the rebranded digital version of the Brazilian Real. Despite the rebranding, the envisioned functionalities of this digital currency remain the same.

• Vaki, a renowned crowdfunding platform hailing from Colombia, has expanded its operations to Mexico. The platform, dedicated to magnifying donation volumes, boasts of accumulating over USD $11 million earmarked for social impact initiatives.

• Parallel18, a player in the startup acceleration landscape, has unveiled the combined valuations of its affiliated enterprises, aggregating at a commendable USD $68.9 million.

• Axenya, with an intent to bolster its data analysis capabilities in the health sector, has acquired HealthAPI. While the specific transaction amount remains undisclosed, it's evident that HealthAPI's technological toolkit is set to augment Axenya's offerings in the healthcare domain.

Friday 

• Post securing a funding of R$ 125 million, dr.consulta is mapping out its ambitious expansion. The strategy is underpinned by three central tenets: elevating recurring revenue, delving deeper into corporate health plans, and broadening its chain of medical clinics.

• Brazilian startup SYX Global has emerged as a potent player in the industrial waste sector, positioning itself as the 'Mercado Livre' of this domain. Through its Central de Materiais marketplace, the startup facilitates businesses in liquidating unused materials. With a transactional volume already touching BRL 200 million, companies like Votorantim and Bosch are on its client roster.

• Linked Gourmet, a startup specializing in the automation of restaurant management, has raised an investment of BRL 5 million from Entre Investimentos, the parent entity of payment solutions provider, EntrePay.

• In a strategic move to capitalize on the potential of digital assets, Banco BV has introduced the BVx ecosystem. Signifying its prominence in this realm, the Brazilian Central Bank has chosen Banco BV to be a part of the pilot project for the digital version of the Brazilian Real.

• Mercado Libre has witnessed a shift in its leadership, with Pedro Arnt stepping down from the Chief Financial Officer's chair. The baton has been handed over to Martín de los Santos.

• Doji, a UK-based startup founded by Brazilian entrepreneur Fernando Montera Filho, has set foot in Brazil. The startup's forte lies in facilitating the trade of pre-owned electronics.

• At an event in São Paulo, Google Cloud extended an invitation to clients to present pioneering projects that harness natural language. Leading the charge were Magalu and Dasa, who showcased their endeavors powered by Google's technology.

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.