LatAM Tech Weekly #159

Happy Sunday!

I mentioned last week, but just reinforcing… I launched a podcast on Spotify! I used the new AI tool, Notebook LLM, to turn my newsletters into a polished podcast. My newsletter still goes out every Sunday, and the podcast, inspired by it, will be published every Monday. So, if you’re short on time—or just not in the mood to read—you can now tune in instead. To find it, you can either click on the hyperlink above or search for “Weekly Tech Update” or “LatAm Tech Weekly” on your Spotify search bar. The past two editions are already ready for you. 

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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.

I know some of you might skip the “What am I listening to/What am I watching” section at the bottom of this newsletter, but honestly, it’s often where I find some of my best sources of information. Last week, I highlighted the BG2Pod episode with Brad Gerstner, Bill Gurley, and Jamin Ball (still there this week). Episode 19, focused on the State of Venture, was a fantastic listen. Inspired by it, I decided to dive into the specific articles and papers they referenced, as I found the discussion both important and insightful—definitely worth sharing with all of you.

First up: Clouded Judgment by Jamin Ball is an absolute must-read if you’re connected to the tech ecosystem in any way. It’s a weekly newsletter, primarily focused on trends in cloud software companies, but Jamin also tackles broader, macro-level themes that impact the entire ecosystem. On the week of October 25th, he wrote a piece called Misaligned Incentives, which sparked a ton of conversation—on the podcast, across newsletters, and even on social media.

Here’s the essence of it: in the venture capital world, there are three key stakeholders:

• GPs (General Partners): These are the partners of the venture funds investing in startups—the deals I often highlight here.
• LPs (Limited Partners): Endowments, pension funds, family offices, high-net-worth individuals—essentially, the entities providing capital to the venture funds and its GPs.
• Founders: The entrepreneurs building new companies.

The catch? For the system to truly thrive, the incentives among these three stakeholders need to stay aligned….

Let’s understand further, how do each of these stakeholders “win”?

• GPs: They earn through salary (a percentage of the fund’s management fees, usually 2%) and carry (their share of the fund’s performance, typically 20%).
• LPs: They seek strong returns on their investments.
• Founders: Their goal is to build a great company and create equity value.

Now, if you’ve been following this newsletter, you know I’ve been talking about how some funds keep getting bigger and bigger, with LPs concentrating their capital into the same established funds. This trend is making it incredibly tough for emerging managers to raise funds.

Here’s where it gets tricky: unlike the early days, GPs can now make a comfortable living without delivering outstanding returns. Why? Larger funds mean bigger management fees, regardless of the fund’s performance. This creates a potential misalignment: it’s easier for GPs to focus on raising massive funds, deploying capital quickly, and moving on to the next fund—rather than raising smaller funds, prioritizing the 20% performance fee, and chasing those big fund returners.

My takeaway?

Founders, know whether you’re raising from a “2% fund” or a “20% fund.” GPs, be aware if you’re operating a “2% fund” or a “20% fund.” LPs, understand if you’re investing in a “2% fund” or a “20% fund.” There’s no absolute right or wrong, but awareness is key. 

Kyle Harrison from Investing 101 breaks this down further:

1. Capital Agglomerators: These firms optimize for scale—more resources, more exposure, and ultimately, more fees.
2. Capital Allocators: Smaller funds, laser-focused on deploying capital to generate big returns.
3. Capital Absorbers: Startups hungry for capital, capable of taking on millions (or even billions) of dollars.

This framework leads me to the next topic in my market update: Artificial Intelligence. AI startups are the ultimate capital absorbers. They need mountains of cash—not just for the sake of it, but because their business models demand it.

So here we are, back at square one: do we need capital agglomerators to ensure that AI’s true absorbers get funded, even if allocators might generate better returns? 

Food for thought.
 

Moving on, this week, I was invited to speak about artificial intelligence at a forum where most of the audience wasn’t familiar with even the basics of tech. Honestly, these talks are some of the hardest because you have to strip down complex ideas into something relatable and digestible. While preparing, I stumbled across two slides that really stood out to me—they’re simple but so effective at illustrating the big picture.

 I thought I’d share them with you too. Whether you’re already deep into the tech world or just trying to keep up with these unprecedented times, having a clear framework to understand AI is crucial. Hope you find them as helpful as I did 😊
 

Last but not least, CB Insights released a fascinating report on 15 trends to watch in 2025. I'll simply list them here for now and dive deeper next week (I know I’ve already written quite a bit...). Stay tuned! 

Financial Services

1. The Cyborg Wealth Advisor
2. AI Agents Are Given Money to Spend
3. Crypto Takes More Baby Steps Toward the Mainstream
4. Compressed Fintech Valuations Create Opportunities for Acquirers

Healthcare & Life Sciences

5. Disease Management Enters a New Phase with AI
6. Investment Floodgates Open for RNA Therapeutics
7. Autonomous Robots Eye Caregiving

AI

8. AI M&A Fuels the Next Wave of Corporate Strategy
9. LLMs’ Explainability Moment
10. Open-Source Cedes Top LLMs but Dominates Smaller Models
11. The US Is Leading the AI Arms Race — for Now

Enterprise

12. Spatial Computing for Enterprises Is Here to Stay

Retail & Consumer

13. Retail’s Personalization Imperative

Industrials

14. The Future Data Center Arrives
15. Cheaper Access to Space Sparks Investor Rush

Monday

General news:

• NotCo invests $30M to expand its functional snacks category, launching NotSquares, a zero-sugar, protein-rich chocolate product. This innovation follows the recent launch of NotKetchup, aiming to disrupt the functional food market.
• Agibank’s Q3 profit surged 49.6% YoY to R$205.9M, fueled by a 55.2% credit portfolio growth. The bank plans to open 200 "smart hubs," focusing on smaller cities in Brazil's North and Northeast regions.
• Revolut secured a UK license to trade stocks, expanding its offerings to UK and EU equities starting in 2025. With 650,000 UK clients, it strengthens its position in global markets, including its recent entry into Colombia.

Deals:

• Blip, Brazilian AI startup, raised $60M in a Series C round led by SoftBank and Microsoft. The funds will support M&A and international expansion, focusing on Latin America and the U.S.
• ServiceTitan, Field-service SaaS leader, filed for itsIPO. It reported $685M in LTM revenue (+26% YoY), 64% gross margin, and >110% net revenue retention, targeting a $13B market potential.
• Outsmart College: Gina Gotthilf, co-founder of Latitud, and two ex-Duolingo leaders raised $13M for edtech startup Outsmart College, backed by Khosla Ventures, Lightspeed, and Latitud Ventures.
• Spun Mídia acquired 50% of email marketing agency ReConverte for R$2.5M, enhancing its e-commerce and infoproduct solutions. The partnership aims to scale operations and impact.
• L Catterton invested in veterinary hospital chain WeVets, valuing it at R$400M. Treecorp exited with a 3x return, and the funds will support organic growth and M&A in Brazil’s pet care market.

Tuesday

General news:

• Pix by approximation is rolling out in Brazil! The pilot phase starts with Google Wallet, available for C6 Bank and PicPay users, with Itaú joining soon. This NFC-powered feature allows payments by tapping phones and is set for broader launch in February 2025, advancing digital payments under the Open Finance model.
• Senior Sistemas expands in LATAM with modular management solutions, surpassing R$1 billion in annual revenue. The company’s AI-powered, flexible architecture supports industries like logistics and agriculture, driving regional growth.
• Influencers are reshaping news consumption. A Pew survey shows 21% of U.S. adults—and 40% of those under 30—get news from creators, not traditional outlets. Legacy media may collaborate with influencers as platforms like X and TikTok dominate.
• Trinus.Co celebrated its 15th anniversary by adding five leaders to drive growth in financial and real estate sectors. New hires include Márcio Munhoz (Tech Head) and Marcos Lavin (Group Product Manager), emphasizing innovation and scalability.
• Elon Musk is suing OpenAI and Microsoft, alleging monopolistic practices in generative AI. Musk claims their dominance hinders innovation, sparking debates on AI regulation and market fairness.
• Bluesky hits 20M users post-U.S. elections, with liberals flocking to the platform as an alternative to Elon Musk’s X. Usage surged 519%, challenging X’s declining user base.
• Brazil’s Agriculture Committee approved tax exemptions for early-stage agtech startups, including two years of income tax breaks for investors. The bill supports agribusiness innovation but requires further approval.
• Rappi is expanding its "Turbo 24h" ultrafast delivery service to Rio de Janeiro and Belo Horizonte, after São Paulo trials. Focused on 24/7 convenience, Rappi plans to double SKUs and expand further in 2025.
• AQUI Tu Reforma enters Brazil with plans to open 100 franchises in five years. Backed by Seaya Ventures, it targets Brazil’s $50B+ renovation market with tech-driven solutions enhanced by VR tools.
• Artificial Intelligence is transforming Brazil's credit industry. AI adoption among financial institutions has reached 50%, streamlining credit approvals and reducing defaults while improving personalization.
• Dimensa plans aggressive M&A after acquiring Quiver for R$115M. The Totvs-B3 joint venture aims to expand its fintech infrastructure with AI and analytics, funded by internal cash flow.
• Berthier Ribeiro-Neto leaves Google to become CTO of UME, a fintech focusing on lending for small retailers. Backed by PayPal, UME expects to grow loans from R$220M last year to R$500M next year.
• Colombian President Gustavo Petro warned the G20 about the risks of AI automation, calling for global governance reforms and workforce upskilling to prevent job losses and social crises.
• PicPay expands its B2B offerings with a new card machine. Featuring NFC and app integration, it processed R$17.4B in H1 2024, aiming to replicate its individual success in the corporate segment.

Deals:

• Celcoin made its first post-funding acquisition, buying CobranSaaS to triple its credit vertical by 2025. The fintech raised R$650M from Summit Partners in June, marking its fifth acquisition in two years.
• Across Capital raised $120M for its first fund, targeting global software companies. Led by ex-Vulcan Capital managers, it has invested in four firms, including QI Tech, which grew EBITDA 5x since their investment.
• Mottu secured R$200M through debentures, backed by JGP and Bradesco. Operating in 80+ cities across Brazil and Mexico, the startup plans to expand its 80,000-motorcycle fleet while maintaining low leverage.

Wednesday

General news:

• Bitcoin hits a record high of $94,000, more than doubling this year amid optimism about U.S. regulatory shifts. Brazil remains a top 10 country for crypto adoption, with growing market excitement.
• Nvidia reported $35.1B in Q3 revenue (+94% YoY) and a 109% profit surge, driven by 112% growth in data center sales. With Blackwell chips and booming AI demand, it expects a record $37.5B in Q4, maintaining its market dominance.
• InterPrêta is driving accessibility and inclusion by offering Libras (Brazilian Sign Language) interpretation exclusively by Black women. This initiative has generated over R$600K in 2024 for 100+ interpreters, quadrupling its impact from 2023.
• Online fraud in Brazil during Black Friday has surged 35%, fueled by AI-driven fake sites. Experts urge caution with suspicious URLs and unreal discounts, advising secure payment methods.
• Aggie, a new AI-powered platform from Audience Genomics, helps small businesses manage their social media effortlessly. By leveraging its vast data on successful posts and industry trends, Aggie generates social media calendars in under 5 minutes. Designed for busy business owners, it offers ready-to-use content for platforms like Instagram, LinkedIn, and X, with customization options.

Thursday

General news:

• DOMO.VC is launching DOMO Seed 4, a R$200M multi-class FIP targeting 20-25 startups in fintech, B2B, and marketplaces. With first closings expected by January 2024, investments start at R$100K.
• Kamino names Juliana Strohl as Co-founder and CLO, recognizing her contributions since 2021 in legal leadership and innovation. Kamino is also advancing diversity in fintech with initiatives like free financial courses and SME credit solutions.
• October saw Latin American startups raise $555.4M in 42 deals, with Brazil securing $355.1M across 25 rounds. Fintechs dominated the funding landscape, attracting $399.7M, with Asaas leading the charge with a $160M Series C.
• Elon Musk's xAI reached a $50B valuation after a $1B funding round led by Sequoia, a16z, and Qatar’s sovereign fund. Its Grok AI aims to disrupt the market, with an updated version launching in December.

Deals:

• Tractian is finalizing a $120M funding round led by Sapphire Ventures, General Catalyst and Upload valuing the industrial IoT startup at $600M-$700M. With revenue at $40M and 30% generated internationally, Tractian is expanding in the U.S., Brazil, and Mexico.
• Bemobi acquired a payment institution, obtaining a PISP license to innovate with PIX features like biometric and automated payments. The move positions Bemobi as a leader in digital payments, with a market cap of R$1.2B.
• Clinia raised R$2M in a pre-Seed round led by ABSeed Ventures. The healthtech supports 300+ clinics and aims to expand to 1,000, with funds allocated to leadership hires, GTM strategies, and AI-driven product innovation.
• Rhino secured R$18M in seed funding to grow its armored car ride-hailing service. Operating with 150K users, the startup plans to expand to Rio and target high-income clients, aiming for R$50M in revenue by 2025.
• Apoia, an AI-powered platform for curated professional courses, raised $800K from funds like Reach Capital. It challenges giants like Udemy, leveraging 15K courses and AI-driven scalability, with Series A plans for 2026.
• KGeN raised R$55M in a round led by Aptos Labs, with Polygon and Game7 participating. Valued at R$2.5B, the gaming startup focuses on Web3 adoption, expanding its 10.8M user base across emerging markets like Brazil and India.

Friday

General news:

• Accel-KKR enters the secondaries market with its $2.2B AKKR Strategic Capital fund, focusing on GP-led secondaries for software companies. The move positions the firm well in a sector that raised $51.3B in H1 2024 alone.
• TIVIT appoints Rafael Maia, ex-Matera, as head of TIVIT Techfin. With R$25M in backing, Maia will leverage his expertise in Core Banking, PIX, and Open Finance to drive innovation and double revenue by 2024, while expanding across Latin America.
• Amazon deepens its partnership with Anthropic, investing $4B to enhance AI innovations. AWS will power Anthropic’s models, like Claude, and optimize hardware, reinforcing Anthropic’s $40B valuation ambitions.
• AI Data Centers face energy shortages by 2027, warns Gartner, as GenAI demand triples energy consumption. Up to 40% of AI centers could hit operational limits, increasing costs and sustainability challenges.
• Sebrae unveils SEBRAE DELAS, a credit line for women-led SMBs, during Delas Summit 2024. Offering 100% financing guarantees, it aims to empower female entrepreneurs and boost inclusive economic growth in Brazil.
• Sequoia Capital reported a 24.6% value increase in its 2020 US Venture Fund over the past 12 months, highlighting resilience in tech sector investments. The fund has grown nearly 30% since 2022, defying challenges from the 2020-2021 tech bull market.
• Lev, the Brazilian e-bike company, supports Vela’s former customers after its bankruptcy by selling Vela-exclusive batteries. While not a major financial move, this step strengthens the e-bike market and highlights solidarity in tough times.

Deals:

• Inspirali acquires Eu Médico Residente for R$38M, enhancing its medical education portfolio. With 79% annual growth, EMR generated R$20.6M in 2023, aligning with Inspirali's lifelong learning strategy.
• Imobia raised R$600K from SC Ventures to expand its rental management platform. With over 20K monthly transactions, Imobia aims for 100K by 2027, offering financial solutions like digital signatures and receivables advances.

Tech Events Radar:

I’ll have the honor of conducting the Q&A session with Benedict Evans ( if you are an avid reader you know that I love citing his reports) live during FUTURE 2024! It will take place in Sao Paulo on December 9th. If you like tech, you cannot miss it. See you all there? Click here for tickets!
 

WHAT AM I READING?

• Clouded Judgment By Jamin Ball
• Investing 101 by Kyle Harrison
• CB Insights 15 Trends to Watch in 2025

WHAT AM I LISTENING TO? WHAT AM I WATCHING?

• BG2 Podcast: State of Venture, AI Scaling, Elections | BG2 w/ Bill Gurley, Brad Gerstner, & Jamin Ball

QUOTE OF THE WEEK:

"The true magic of Christmas is found in the laughter of children and the light in their eyes."
- Unknown