INSUBCONTINENT EXCLUSIVE:
Sophia Wood
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Sophia Wood is a Venture Partner at Magma
Sophia is also the co-founder of LatAm List, an English-language Latin American tech news source.
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Latin America Roundup: SoftBank adds $1B, Stori raises $10M and Grow Mobility puts on the brakes
Latin America Roundup:
Loft raises $175M, SoftBank invests in Mexico Alphacredit and Rappi pulls back
As the world locks down borders and capital flows to
brace for the impact of coronavirus, Brazilian startups continue to attract international attention
Three large acquisition deals dominated the Latin American tech headlines this month, all coming from the region largest country
As investments have waned, these deals offer hope for some increased liquidity in Latin America startup ecosystem.
At the beginning of the
month, Brazilian real estate leader Grupo ZAP was acquired by OLX Brasil for $640 million, solidifying the classifieds platform position in
the local property market
The deal will enable OLX to offer its customers more than 12 million listings from 40,000 agencies and individuals.
Grupo Zap merged with
the property rental platform VivaReal in December 2017, becoming the de facto largest real estate portal in the country
While the brands have operated separately, they jointly receive more than 40 million visits per month to help Brazilians find properties for
The acquisition is still under review from Brazil antitrust agency, CADE, and will be finalized later this year.
Meanwhile, Peixe Urbano
reported its intention to acquired Grow Mobility, the alternative mobility company created from the merger between Mexico Grin and Brazil
Peixe will own the majority share in the e-scooter and bike-share startup, which has recently struggled to turn a profit
After leaving 14 cities in February, Grin Mobility is only active in Brazil three largest cities today, as well as in a few countries around
Latin America, despite a promising partnership with Rappi in 2019
Grow Mobility raised $150 millionin January 2019 when Grin and Yellow merged and seemed to be one of the fastest-growing startups at the
time; however, this deal is rumored to be a total write-off for the startup investors.
Finally, a Swedish cloud communications platform
called Sinch AB announced it would acquire Movile strategic communications company, Wavy, for $68.3 million (BRL$554 million) and more than
1.5 million shares in the publicly traded company
Movile is one of Brazil largest tech businesses, a telecommunications company striving to become the region Tencent
Wavy is Brazil second-largest messaging provider and also operates in Mexico, Colombia, Peru, Chile, Argentina and Paraguay, relaying more
than 13 billion messages per year
Sinch will use the acquisition to grow into the Latin American market, where Wavy currently employs over 260 people across nine offices in
At the time of purchase, Wavy was growing at 200% year-on-year, hinting at strong growth for the new business over the coming years.
Movile
also announced the arrival of a new CEO, Patrick Hruby, in the last week of March
His predecessor, Fabricio Bloisi, co-founder and CEO since 1998, will take a seat as board president and will continue to act as CEO of
Hruby previously spent five months as an Executive in Residence at Movile, where he worked closely on operations with all Movile companies:
iFood, MovilePay, PlayKids, Sympla, Wavy and Zoop
Movile is one of Brazil least-known unicorns, quietly building a mobile empire for the region with a goal of impacting over one billion
people.
Credijusto raises $100M to support SMEs in need
The Mexican credit provider, Credijusto, announced in mid-March that it had received
$100 million in debt from Credit Suisse to help the startup extend more loans to SMEs affected by the economic impact of the coronavirus
Small businesses in Mexico already struggle to access financing from banks, and the current economic projections will likely cause financial
institutions to hold off on risky investments for the foreseeable future.
Meanwhile, this credit crunch has caused a surge of interest in
Credijusto products: online small-business loans
The startup uses an algorithm to rapidly calculate risk and interest rates, providing much-needed liquidity for SMEs struggling in the face
Credijusto also recently raised a $100 million debt vehicle from Goldman Sachs, alongside a $42 millionSeries B equity round from Goldman
and Point72 Ventures in September 2019.
Cornershop, iFood: Keeping up with coronavirus delivery demands
While in the U.S., Instacart and
Amazon are scrambling to keep up with the boom in delivery orders, Latin American delivery giants Cornershop and iFood face similar
Mexican-Chilean delivery app Cornershop, which was acquired by Uber last year for $450 million, revealed they had just nine months of
operating capital left as they face unprecedented order volume.
Despite the large acquisition deal, Cornershop case remains under review by
the Mexican antitrust organization, COFECE, which blocked their previous $225 millionacquisition offer from Walmart
Cornershop co-founder and CEO Oskar Hjertonsson took to Twitter to share the challenges his company is facing as demand for grocery delivery
surges due to coronavirus concerns
He notes that grocery delivery has become an essential service in many areas with severe quarantines, yet with the acquisition still in
question, Cornershop does not have the resources to serve the current demand.
Two Mexican regulators are currently fighting over the
jurisdiction to review this case, which has been going on for more than six months without a resolution
Cornershop has been at the mercy of Mexican officials since June 2018, when they first announced their Walmart acquisition
On Twitter, Hjertonsson urges Mexican officials to move forward on the decision as soon as possible to capitalize on an opportunity to help
millions of Latin Americans who are currently in lockdown, as well as bringing in the resources needed to protect their delivery staff.
At
the same time, Brazil largest food delivery company, iFood, announced the launch of a new fund to help small restaurants survive the
economic tumult brought on by the coronavirus
The food industry has been one of the hardest-hit by the pandemic, as many restaurants live on small margins
To combat this trend, iFood launched a $9.8 million fund that will support small restaurants within the iFood network.
The company also
announced that it would speed up receipt processing during April and May, helping small businesses receive their payments within seven days
This measure will inject an additional $117 million into the Brazilian restaurant market
Finally, iFood seeks to support its restaurant partners by returning all fees they receive for delivery during the coronavirus epidemic
Realizing that restaurants must rely on delivery orders to survive this period, iFood has extended these measures to over 120,000 restaurant
partners in 1,000 cities across Brazil.
News and Notes: Vai.Car, ClassPass, Superlogica and NotCo
Despite public health and economic
concerns about COVID-19, the Latin American startup ecosystem remained active this month, with startups raising large rounds from local and
international firms alike
Brazil car rental startup Vai.car raised $85 million from the Brazilian investment platform XP Investimentos, which IPO&d at the end of 2019
The startup targets a young market by enabling medium-term car rentals that are delivered to the user door and unlocked with face
Vai.car also partners with Uber and 99 to help drivers access vehicles from their fleet of more than 25,000 cars.
U.S
gym-sharing platform Classpass expanded aggressively into Latin America this month through the acquisition of Chile Muvpass and Argentina
These platforms work similarly to Classpass, allowing users to access a network of gyms and fitness classes across the country
Classpass launched in Brazil in December 2019 and became the first unicorn of the decade, with a $285 million Series E in early 2020.
The
Brazilian payments management platform Superlogica raised a $63.5 million round from U.S
private equity firm Warburg Pincus in mid-March
Superlogica helps companies manage recurring payments using a subscription model powered by artificial intelligence
The startup currently serves customers in more than 45,000 rental properties around the country.
Chilean plant-based food tech startup, The
Not Company, announced a partnership with Burger King to create a vegan Whopper across the United States
The RebelWhopper is made of plant-based meat and features NotCo signature NotMayo, a mayonnaise made without animal products, which rapidly
became a household name in Chile
The Not Company raised $30 millionfrom Bezos Ventures and other investors in 2019 and has continued to expand rapidly into Argentina and
Brazil over the past year.
The past six weeks have been characterized by global uncertainty about the future of the economy and
international relations as COVID-19 has made its way into every country in the world
However, deal flow in Latin America was still strong in March, bringing large deals and several acquisitions, especially in Brazil, even as
the country refuses to lock down to prevent the spread of the pandemic
Notably, despite travel restrictions, many of the deals this month were led by foreign VCs, hinting at a potential for quicker feedback
loops in the region as investors disburse capital without traveling first.
It is hard to see today what the new normal will be globally, and
specifically in venture and tech in Latin America
Almost every country has closed its borders, some more forcefully than others, and many are waiting out the pandemic in some level of
Just Mexico and Brazil, the region largest economies, remain adamant about keeping their cities running normally, even encouraging their
citizens to visit bars, restaurants and museums as their neighbors shutter businesses
Time will tell how this decision will affect startups and investments, as well as their citizens and political stability, across the
