This week in LATAM startups

32 firms dropped the authorization process for Fintech Law in Mexico, American Express explores generative AI, Billú targets gamers, Tem Saúde acquired Bella & Materna

Jun 02, 2023

TL;DR:
The Hypernoir newsletter is back, now publishing as part of Contxto.com.

Dear Hypernoir and Contxto subscribers,
We're thrilled to announce that we're back to keep you abreast of the latest news and insights tailored for venture capitalists and entrepreneurs interested in Latin America under our new home, Contxto.com.
And to all of our Contxto subscribers, get ready for an enhanced weekly newsletter! We will providing a comprehensive summary of everything you need to stay informed and up-to-date on new developments.
I'm equally excited to share that I have joined the dynamic team at Contxto as Director, and I look forward to bringing you the most engaging content in this vibrant ecosystem.
Here's to our continued journey together!

Contxto

News

Sensify, an Argentinian startup specializing in AI-powered sensors has relocated its production to Brazil.

It will focus on global expansion and benefit from tax advantages. Having raised 70% of its Pre-Seed capital round, the startup has connected over 20,000 points of sale in the past year and partnered with a Brazilian entity for large-scale biotech device manufacturing.

Sensify's upcoming product, leveraging computer vision technology for real-time stock control through image recognition, is poised to provide mass consumer brands with a significant market advantage by tracking selling patterns. The company has agreements with refrigerator manufacturers in Latin America and clients in four countries, with plans for constant innovation and market expansion. (Punto Biz)

Colombian startup Littio announced its expansion to Argentina

The movement is part of its LATAM growth strategy, aiming to provide an inclusive global financial ecosystem with access to digital dollars and euros. With Argentina's economic volatility and local currency devaluation, Littio aims to break barriers for those wishing to engage in international transactions, safeguard their capital in stable currencies, and seize investment opportunities. The company aims to onboard 10,000 users within the first two weeks of launching in Argentina. (Valora Analitik)

ALLVP launched a $150M fund, "ALLVP IV", to support AI startups in Mexico, with an initial investment in Senzai, an AI sales and marketing platform.
Stripe is entering the credit game by launching Stripe Capital, a lending service for businesses that use the Stripe payments platform.

The Mexican e-commerce market has tripled its value in just four years, driven by factors such as improved internet connectivity, increased smartphone penetration, and the accelerated adoption of e-commerce during the COVID-19 pandemic.

32 firms have dropped out of the authorization process under the Fintech Law in Mexico

This is mainly due to an average authorization time of 718 days under the Fintech Law in Mexico. Of the 162 applications submitted, 32 have withdrawn, 23 have been rejected, and 58 have been authorized and published in the Official Gazette. The lengthy authorization times have raised questions about the efficiency of the process, prompting some fintech companies to explore alternatives outside of this regulatory framework. (El Economista)

American Express explores generative AI

The company’s innovation arm, AmEx Digital Labs, is experimenting with the technology to determine how it can improve the customer experience across its credit cards and bank offerings for businesses and individuals. The company is unlikely to launch its own language learning model and will instead rely on integrating existing offerings, said Luke Gebb, executive vice president of American Express Digital Labs. (VB)

Afirme through Billú targets gamers and blockchain

Mexican digital bank Billú, launched by , will focus on gamers and blockchain technology to attract customers, according to head Martin Alonso Mercado. The bank will not seek a separate licence to operate as a fintech, but will instead work under Afirme's existing banking licences.

Mercado said Billú's initial focus would be on Mexico City, Jalisco and Monterrey, and added that the bank aims to increase its initial investment of MXN300m ($14.9m) by 2025. Billú currently has 10,000 customers and aims to reach 250,000 by the end of 2023. (Expansion)

Corporate VC’s are investing to bring AI to their parent companies

Adopting the standard approach, corporate VCs are leveraging the tech resources of their parent organizations to support their portfolio startups. This includes:

Salesforce, which launched a new $250 million fund in March, focused on generative AI. (TC)
Workday, which augmented its existing fund by $250 million in February, to invest specifically in AI and machine learning startups. (Seeking Alpha)
OpenAI, the creator of the popular ChatGPT app, raised a $175 million fund for AI startups. (SEC)
Amazon, which recently introduced an accelerator program for generative AI startups, offering Amazon Web Service credits for participants. (Axios)
The Solana Foundation, the team behind its namesake blockchain technology, announced an accelerator program along with a $10 million fund for developers working on generative AI applications. (TC)

Gig workers in California to receive millions for unpaid vehicle expenses

App-based ride-hail and delivery companies, including Uber, Lyft, and DoorDash, are required to issue potentially millions of dollars in back payments to California gig workers for unpaid vehicle expenses, due to a clause in Proposition 22.
This discrepancy, first noticed by an Uber driver, was attributed to companies waiting for the California treasurer's office to publish adjusted reimbursement rates for inflation, which was not done promptly. (L.A. Times)

Why it Matters

This incident highlights a significant lack of transparency in the gig economy and the need for stricter regulation to ensure fair compensation, including Latin American.
The case sets a regulatory precedent that underscores the need for transparent operations, fair compensation, and worker-friendly policies, shaping the trajectory of the gig economy across the region.

Elizabeth Holmes, founder of Theranos, has begun her 11-year prison sentence.

This following her conviction for four counts of fraud and conspiracy. Once celebrated as the youngest self-made female billionaire in the US, Holmes's downfall was triggered by revelations that Theranos's core blood testing technology was non-functional. She now plans to work on another biotech company during her incarceration. (NYT)

M&As

Tem Saúde, the medical insurance startup, recently acquired Bella & Materna, a company specializing in connecting expectant mothers with healthcare specialists. Both organisations operate in Brazil.

New Players

Manits: personalised financial plans

Founded by Andrés Felipe Daza and Jairo Pitta This Colombian app pairs you with financial mentors for COP$120K (US$27) to devise a goal-oriented plan, and automates payments, loans, investments, insurance, and taxes, letting you focus on enjoying life. (link)

Who Raised?

Kiwi has secured $80 million in funding to provide lending services specifically targeting the Latino community in the United States.
Huli | Seed | $5,500,000.00 Huli provides SaaS products and applications for independent health professionals.(Inversores: Intake Health)
Cubo raised $3.5M in a seed round to expand its POS system, facilitating payment digitalization for SMEs in Central America, with over 70% of its 8K affiliates using a POS for the first time.
Eurofarma | Debt Financing | $99,996,000.00 Eurofarma is a Brazilian multinational pharmaceutical company.(Inversores: Santander)
THE EARTH SAYS | Convertible Note | $80,000.00 We ensure the quality and accessibility of hives to optimize pollination.
Cero Pollito | Pre-Seed Evolving the Fast Food Industry in LATAM through an amazing plant based concept.
AltWoo | Venture Altwoo is a global social network on a blockchain platform with real-time information and analysis.
Habi | Debt Financing | $50,000,000.00 Habi is a digital platform that aims to simplify the process of buying and selling real estate properties.(Investors: IDB Invest)
Ceibo | Series B | $30,000,000.00 Ceibo specializes in solutions based on green mining technology.(Investors: Energy Impact Partners)
Stori | Debt Financing | $50,000,000.00 Stori Card is a digital platform focused on providing digital financial services to underserved customers.(Investors: Community Investment Management)
Ole Insurance Group | Series A | $12,000,000.00 Ole Insurance Group focuses on offering protection and well-being products and services through technology.(Investors: Alma Mundi Ventures, AV8 Ventures)
Tuhabi | Credit Line | $50 million credit line from the financial arm of the Inter-American Development Bank (BID) to expand its operations in Mexico, marking its second significant funding after a $100 million credit line from Victory Park Capital in April; Tuhabi simplifies the selling process for homeowners by offering online property transactions with payment within 10 days.