The Most Technologically Advanced Countries in Latin America
Tech hubs in LatAm. Investing in B2B founders in Brazil. Revolut's expansion in Brazil. 2024 tech strategy toolkit. 2023: a year of lower valuations for startups.
Welcome to our weekly newsletter covering the latest news and trends in the Latin American startup scene.
12 Most Technologically Advanced Countries in Latin America
Latin America is steadily growing in the tech sector and becoming a leading supplier of tech talent to North America. Despite challenges like inflation and interest rate hikes, the tech industry in Latin America is prospering. Fintech is one of the fastest-growing industries in the region, with investments exceeding USD$5 billion in 2021.
Latin America's younger population and government incentives are driving the growth of the tech sector. However, startups face challenges in obtaining capital due to interest rate hikes and stricter investment guidelines. American tech giants are finding success in Latin America, and foreign companies are establishing larger footprints in the region.
The most technologically advanced countries in Latin America include the Dominican Republic, Panama, Costa Rica, Uruguay, Ecuador, Venezuela, and Peru. These countries are making significant advancements in the tech industry and attracting tech investors.
Vía Yahoo! Finance
The rise of tech hubs in Latin America
Latin America has become a hub for technological growth and innovation, with a flourishing network of tech hubs and innovation clusters. The region has seen a surge in venture capital funding for startups, indicating a vibrant tech ecosystem.
Santiago in Chile and São Paulo in Brazil are notable tech hubs in the region. Latin America has a skilled and diverse talent pool, making it an attractive destination for companies looking for nearshoring solutions. Tech hubs in Latin America stay aligned with global trends by adapting to technologies like AI, IoT, and blockchain. The region offers strategic advantages for nearshoring, including overlapping time zones with North America and a cultural affinity.
Brazil's IT services and software market is predicted to experience significant growth. Latin America's tech hubs offer opportunities for innovation, collaboration, and strategic success. Sunbytes is positioned as a partner to help businesses nearshore a high-quality workforce in the region.
Vía Sunbytes
Investing in Early-Stage B2B Founders in Brazil With NXTP
Latin America's fintech market has experienced significant growth, going from a value of less than USD$50 million in 2016 to USD$2.1 billion in 2022. NXTP, an early-stage B2B venture investor in Latin America, recently closed its third fund with USD$98 million in commitments. They focus on partnering with promising technology founders in the region. Bruno Dalapria, a principal at NXTP, discusses the B2B investment trends in Brazil, including infrastructure for PIX payments, digitalization of receivables, and AI "tropicalization."
NXTP aims to improve the B2B venture investment sector in Brazil and Latin America through sector expertise, community building, and robust due diligence. The Brazilian B2B investment sector has similarities to the global market but also has differences such as low B2B e-commerce penetration and the potential for high growth with lower capital needs. Challenges in the region include funding limitations and a less developed business environment.
NXTP's plans involve investing its recently announced fund, supporting portfolio companies' growth, and maintaining an active role in the entrepreneurial ecosystem. The team is optimistic about the future and sees potential in the Latin American market.
Vía The Fintech Times
Quick News
Briq.mx Authorized as IFC under Mexican Fintech Law
The authorization was granted by the National Banking and Securities Commission, making Briq.mx one of the 23 authorized crowdfunding platforms in Mexico.
Value proposition. The platform allows users to invest in selected real estate projects and provides tools for monitoring investments.
Highlights. Briq.mx has raised nearly 1,397 million pesos through 500 crowdfunding campaigns, mainly focused on residential real estate but also offering options in commercial and industrial real estate. (Contxto)
Cardano Foundation and Petrobras Launch Blockchain Education in Brazil
The Cardano Foundation has partnered with Petrobras, Brazil's state-owned energy company, to introduce a blockchain education program for Petrobras employees.
About the program. The program aims to expand understanding and adoption of blockchain technology in the energy sector.
Value proposition. Employees will participate in workshops and discussions on blockchain's potential applications, with the first 500 completing the program receiving a unique NFT.
About the Cardano Foundation. The Cardano Foundation hopes to set a precedent for blockchain education in the corporate world and promote innovation and empowerment through education. (Contxto)
Chilean Crypto Exchanges Lose Legal Battle to Banks Over Account Closures
Chile's Tribunal de Defensa de la Libre Competencia (TDLC) has ruled against cryptocurrency exchanges Buda.com, CryptoMKT, and OrionX in their legal dispute with several Chilean banks.
Highlights. The exchanges had accused the banks of hindering their operations through account closures and denials. The TDLC found no evidence of collective action by the banks and justified the closures based on anti-money laundering and counter-terrorist financing regulations.
The exchanges are not happy. The exchanges are considering appealing the decision in the Supreme Court. Critics argue that the verdict contradicts market evolution and the recently approved Fintech Law, which requires objective justifications for account closures. (Contxto)
‘Fintech’ Boost Financial Inclusion in Colombia in 2023
Colombia has seen a 0.9% increase in financial inclusion indicators in 2023, thanks to the efforts of fintech companies. This has led to more people gaining access to digital banking services.
Fintech in Colombia. Fintech innovations have catered to the unique financial needs of Colombians, especially in areas where traditional banking was not accessible.
The case of RapiCredit. Initiatives like RapiCredit have addressed the financial needs of the underserved, targeting those who are traditionally distrusted by conventional banks.
Fintech for rural areas. The percentage of adults owning financial products has also increased. However, there is still work to be done in reducing gender gaps in credit access and providing efficient solutions to rural areas. (Contxto)
Argentina Legalizes Contract Agreements in Cryptocurrencies and Other Units
The country has amended its contract law to allow for agreements in various currencies, including cryptocurrencies, reflecting a shift towards embracing digital currencies.
Highlights. The change broadens the scope of monetary transactions in Argentina, enabling the coexistence of different currencies and units within the economy.
Why it matters. This move signifies a significant step towards diversifying economic transactions and aligning with evolving global financial practices in Argentina. (Contxto)
Grupo Fintech Partners with Indert, Expands Payment Services in Paraguay
Grupo Fintech Inversiones is a company in Paraguay that provides convenient transaction solutions. Their goal is to create a better future by providing valuable and time-saving solutions.
About the company. They aim to save time for their users by offering access to various public and private services through their network.
Value proposition. The company specializes in developing innovative and user-friendly technology and offers brands like Pago Express, Aquí Pago, Wally, Bomo, Fintech Servicios, and Fintech Innovación. (Contxto)
El Salvador Grants GreenGo Capital Crypto Management License
GreenGo Capital, a blockchain startup, has received approval from El Salvador's National Commission of Digital Assets (CNAD) to manage crypto assets. This makes GreenGo one of the few entities allowed to operate legally in El Salvador in this capacity.
Why it matters. With this certification, the company will begin regulated operations in December, offering investment management, custody, and administration of cryptocurrency assets.
About GreenGo. GreenGo has established a presence in Brazil and Ecuador and aims to extend its transformative solutions across Latin America. (Contxto)
Chile and Europe Collaborate on Innovation Projects through Eureka Network Projects
The country has launched a new call for Network Projects to support collaborative R&D and innovation projects focused on environmental sustainability. The initiative involves agencies from Belgium, France, and Spain.
Highlights. Chilean companies are encouraged to submit joint project proposals with firms from these countries. The process includes identifying international partners and utilizing Corfo's Matchmaking Platform.
Why it matters. Successful Chilean companies will receive funding from Corfo's subsidy for the development of R&D and innovation projects.
Save the date. The submission process has two phases, with the international phase ending on April 10, 2024. (Contxto)
Revolut Targets $60B in Brazil with Focus on Foreign Investment Services
Globally, fintech Revolut is financially healthy and aims to support further expansion and introduce new financial products in Brazil and other markets.
Highlights. Revolutaims to compete with established banks and fintechs by offering favorable currency exchange rates and a superior user experience.
Value proposition. The company targets three customer profiles: those planning foreign travel, earning income abroad, and engaging in peer-to-peer remittances.
Brazil plans. It plans to double its Brazilian team, introduce new features, and prioritize positive gross margins and customer experience. (Contxto)
How Brazil Is Using Agri-Technologies To Compete In An ESG World
Brazilian agribusinesses are turning to digital and genomic innovations to address the challenges of climate change, labor shortages, and environmental pressures.
Highlights. With over 1,700 agtech startups, Brazil is using technologies like blockchain, artificial intelligence, and drones to enhance sustainability and improve the transparency of ESG initiatives in the food supply chain.
Why it matters. These advancements not only benefit Brazil but also contribute to global food security. Brazil's approach serves as a model for other countries in developing sustainable and technologically advanced agriculture that prioritizes productivity, safety, and sustainability. (Forbes)
SUGA Expands Influence in LATAM, Plans European Market Entry
Suga, a fintech company known as a "Fintech factory," is offering businesses a white-label platform to integrate various financial services directly into their operations.
About SUGA. Their fintech-as-a-service model allows companies to incorporate services like payment processing, collections, issuing, and acquiring, among others.
Growth plans. Suga aims to consolidate its position in Argentina and Latin America while expanding to the European market.
Highlights. They are focused on developing innovative fintech technology and providing comprehensive financial solutions globally. Their goal is to enhance businesses' financial capabilities and maximize profitability through integrated solutions. (Contxto)
Coppel Spearheads Mexican E-commerce, investing MX$660M to establish a Digital Campus
The Mexican retail company is leading the digital transformation in the country with a $40 million pesos investment plan. They are expanding their presence by opening new stores, remodeling existing branches, and enhancing their digital loan services.
Highlights. The company has integrated digital kiosks in its stores, allowing customers to browse, make payments, and have products delivered directly to their homes.
Digital Campus. They have also established a Digital Campus with 2,200 programmers to develop software for their retail, banking, and pension units. (Contxto)
Finds
tools, websites, and accessories
Respell. Respell offers an all-in-one platform that allows users to easily unlock the power of AI through dynamic workflows, autonomous agents, and deep integration with existing tools.
Flick. Flick is a social media marketing platform that offers various tools to help users grow and manage their social media accounts.
Smartly. Smartly.io is an AI-powered advertising platform that helps businesses achieve better campaign performance. It offers centralized campaign management, automated workflows, and predictive algorithms to optimize bids and budgets.
Food for Thought
The 2024 Tech Strategy Toolkit
This article discusses the importance of technology strategy in building and sustaining competitive advantage, regardless of whether a company is a tech company or not.
It identifies nine forms of tech-driven advantage, including interface advantage, cross-subsidization advantage, brand integration advantage, vertical integration advantage, unbundling advantage, composability advantage, interoperability advantage, community advantage, and rebundling advantage.
The article delves into each advantage and provides examples and deep-dives on how they can be leveraged. It emphasizes the significance of owning the primary demand in an attention economy and highlights the role of data integration in supply chain optimization. (Platforms, AI, and the Economics of BigTech)Investors Who Amassed The Most Unicorns Stepped Way Back In 2023
Investments in unicorn companies, private startups valued at USD$1 billion or more, have significantly decreased in 2023 compared to the market peak in 2021, according to an analysis of Crunchbase data. The nine most active venture and growth investors globally have seen a decline in their investments in unicorn companies, with only single-digit investments this year.
In 2022, they invested in 213 companies, while in 2021, that number was 471. This slowdown indicates a shift in investment focus by these investors. Growth investors are particularly affected due to the large amounts invested and high valuations.
The VC investors are less exposed but have had to adjust the value of their portfolio companies. In 2024, it is expected that the number of unicorn companies will decrease as some shut down, others are acquired, and some may go public. (Crunchbase News)These Startups Saw Their Valuations Hiked — And Spiked — In 2023
The VC industry is experiencing a significant downturn in valuations, leading to flat rounds, down rounds, layoffs, and closures. However, certain AI companies have seen substantial increases in value, such as OpenAI, which received a USD$10 billion investment from Microsoft, boosting its value by 2,800%.
Databricks also saw a 14% increase in valuation. Other sectors, including mobile payments, cybersecurity, drones, and solar energy, also experienced up-rounds.
On the other hand, some high-profile companies, like Stripe and Shein, saw significant declines in their valuations. Klarna, a buy now, pay later provider, experienced an 85% drop in value. The article highlights several other companies that faced down rounds as well. (Crunchbase News)
Worthy Recommendations
Power and Progress: Our Thousand-Year Struggle over Technology and Prosperity, recommended by Mark Suzman, CEO & Board Member, Bill & Melinda Gates Foundation.
Power and Progress. “We’re in a moment of incredible technological change, but what we’ve seen throughout history is that the benefits of technology are often intensely concentrated in the hands of a privileged few. In this salient read, Acemoglu and Johnson tell that story and challenge us to ensure that the benefits of innovation are truly enjoyed by everyone—a challenge we can and must rise to.” Mark says.
Jobs
Analista de marketing sênior at Bimbo do Brasil (Greater São Paulo Area; Hybrid)
Payments Program Manager, Payments Products and Operations at Amazon (Mexico City, Mexico; Not specified)
Marketing Manager, Outbound at Amazon (Mexico City, Mexico; Not specified)
Gerencia Sr. Planner Digital at Walmart de México y Centroamérica (Mexico City, Mexico; Hybrid)
Market Insights Director LATAM at The Coca-Cola Company (Mexico City, Mexico; Hybrid)
Deals
These startups and companies received capital this week:
InvestPlay | Fintech | Seed. Brazilian fintech InvestPlay has raised USD$600,000 in a funding round led by BRQ, Osten Moove, and Darwin Startups. Originally a financial education platform, InvestPlay has expanded into Open Finance and now offers B2B solutions including Personal Finance Management and Dashboard Analytics.
Minsait Payments/Totalnet | IT | M&A. Spanish technology and consulting company Minsait has acquired Totalnet, a Uruguayan payment solutions provider. The acquisition is expected to strengthen Minsait's position in the Latin American payments industry and enhance its ability to process card payments for businesses.
Dapta | AI | Seed. Miami-based startup Dapta, founded by Nicolás Rojas, has closed a USD$1 million funding round to enhance its low-code, AI-assisted platform for businesses to create their own APIs. The funding will be used for product development, improving platform efficiency and security, and expanding marketing efforts in the US market.
Quipu | Fintech | Seed. Colombian fintech Quipu has received a USD$1.5 million investment from Grupo Bancolombia as part of its seed funding round. Quipu specializes in offering working capital to micro and small enterprises and aims to revolutionize digital credit access for those overlooked by traditional financial systems.
Levannta | Fintech | Equity & Debt financing. Chilean fintech Levannta has secured USD$2.5 million in equity funding from Manutara Ventures and a USD$8 million debt line from Ameris Capital. This funding will support customer development, strengthen the team, and aid in international expansion.
Bifidice | Biotech | Seed. Chilean biotech startup Bifidice, led by women, has closed an USD$850,000 investment round. The company specializes in producing probiotics and secured funding from investors such as ChileGlobal Ventures and Dadneo Fondo de Inversión.
OnlyPay | Payments | Equity financing. OnlyPay, a company that aims to solve the problem of payment of incentives and bonuses for businesses, has received an investment from Gard2n. The investment will support OnlyPay in expanding into new markets in Latin America and the United States.
Interstellar | Fintech | Series A. Stellar Development Foundation (SDF) and MoneyGram have invested in Colombian digital payments startup Interstellar through a Series A funding round. The investment amount was not disclosed. Interstellar uses blockchain technology to facilitate international money transactions and the investment will help expand its presence in Latin America and the Caribbean.
Lavoro | Agri retail | Post-IPO Debt. Lavoro Limited, a US-listed agricultural inputs retailer in Latin America, has secured a R$420 million (USD$86 million) credit facility to retire existing short-term borrowings and provide longer-term financing options. The facility involves the issuance of Agribusiness Receivables Certificates (CRA), a type of fixed-income financial instrument specific to Brazil's agribusiness sector.
Vixtra | Payments | Venture. Brazilian company just raised USD$6,149,993 in a venture round. The company is a payment method and credit provider for Latin American importers to buy from international suppliers. It offers instant payment, bank account verification, and recurring payments and it also facilitates payments through several payment methods including credit and debit cards.