This week in LATAM Startups
Unearthing the Secrets of Latin American Fintechs, Deals and recommendations by Peter Bihr
Welcome to our weekly newsletter covering the latest news and trends in the Latin American startup scene. As the region continues to produce innovative companies, we're excited to bring you exclusive insights on the most promising startups and investment opportunities.
We know that behind every successful startup is a great story, and we want to hear yours.
Share your journey with us by replying to editor@contxto.com. Our readers include VCs and established tech founders, so this is a great opportunity to get your story in front of a highly engaged audience. Let's continue to build the future of tech in Latin America together.
Unearthing the Secrets of Latin American Fintechs:
Essential Lessons for Silicon Valley VCs and Entrepreneurs
In her insightful article, Ilona Limonta-Volkova (from Global Women in VC) delves into the thriving fintech ecosystem of Latin America, drawing out valuable lessons that Silicon Valley venture capitalists and seasoned entrepreneurs can learn from.
She explores how Latin American fintech startups, have successfully navigated "blue ocean" opportunities, delivered superior customer experiences, and demonstrated remarkable resilience in volatile markets. We invite you to consider these lessons within the context of your own entrepreneurial journey or investment strategy.
Capitalizing on "Blue Ocean" Opportunities: Latin American fintechs, like Nubank, have successfully exploited relatively unexplored market segments with little competition and high barriers to entry. They've created a new type of consumer by focusing on digital solutions, passing cost savings to consumers, streamlining product offerings, and minimizing overhead costs.
Superior Customer Experience: By having a strong digital focus and no physical branches, companies have been able to provide a superior customer experience. The importance of "quick wins" in enhancing user experience and building to scale is a key lesson for Silicon Valley startups.
Resilience in Volatile Markets: Fintechs in emerging economies like Latin America are accustomed to operating in volatile markets and dealing with challenges such as hyperinflation. This resilience and ability to do more with less could serve as a valuable lesson for Silicon Valley, especially in the current high-interest-rate environment.
Promising Future Despite Complicated Exit Dynamics: While the exit dynamics for startups in Latin America remain complicated, with low IPO activity and a decline in M&A activity, the future for these fintechs is promising. The legacy they've created, including the creation of a new type of consumer and increased competition, is seen as beneficial for society.
Why AI Will Save the World (?)
In this article, Marc Andreessen offers a decidedly optimistic view of Artificial Intelligence (AI), arguing that it's a tool that can enhance human intelligence and improve outcomes across various fields. However, it's worth noting that as a venture capital firm with significant investments in AI, they have a vested interest in promoting a positive narrative. Just like they have done with Crypto.
While Andreessen dismisses common fears about AI, such as societal ruin and mass unemployment, it's crucial to approach these assertions with a healthy dose of skepticism. After all, the impact of AI on society and the job market is a complex issue that is still being debated among experts. Actually, all of us are still trying to understand what is happening with AI.
This piece provides an interesting perspective, and should be read it as part of a broader conversation about the future of AI.
Quick News
Ualá is already making waves by launching new account products, just two weeks after securing its banking license. The fintech company is broadening its offerings with a high-yield savings account that boasts an impressive annual yield of 9%. "This is a gamechanger for Ualá Mexico," declared CEO Pierpaolo Barbieri, signaling a bold new chapter for the company. (Yahoo Finance)
Nestlé is set to make a strategic investment in YLL through its Sustainability Fund, the amount of which remains undisclosed. The Sustainability Fund is dedicated to supporting startups that are making strides in the circular economy and regenerative agriculture sectors. This development follows closely on the heels of YLL's recent announcement of the second close of its third fund, which exceeded $20 million. (AFN)
Lab+ Ventures is spearheading a new venture capital fund dedicated to life sciences in Latin America, in collaboration with Ficus Advisory and the scientific research center Institut Pasteurs from Montevideo. The fund is expected to close its inaugural funding round at USD 10 million by mid-June. The investor base comprises approximately 15 entities, primarily family offices and high net worth individuals from Europe and Latin America. (Bloomberg)
Argentina's central bank announced on Thursday that payment platforms are prohibited from providing crypto trading services to their customers. This decision effectively bans the offering of Bitcoin and other cryptocurrencies through these apps in the country. (Decrypt)
HR firm Deel has observed a notable trend among Latin American workers: a 27% increase in cryptocurrency withdrawals over the past six months. This suggests that workers in the region are increasingly opting for payment in US dollars and cryptocurrencies, according to Deel's report. (Bloomberg)
The Generative AI Character.AI, has burst onto the scene with some astonishing numbers. A whopping 1.7 million downloads within the first seven days of launch. The appetite for AI-powered chatbots –or what we lovingly call AI companions– is stronger than ever. But don't be fooled into thinking Character.AI is a one-horse race, though. Its rapid-fire start is shining a spotlight on the larger AI companion market, and it's a sight to behold. The market raked in US$299 million in equity funding in the previous year. But it's not done yet; we're halfway through 2023, and already they've banked US$155 million. Thank the US$100 million-plus funding rounds from not just Character.AI, but also its competitive comrade, Inflection. (CBInsights)
Runway, has soared to the $1 billion valuation mark, making it the latest entrant to Chile's illustrious unicorn club. The AI startup hailing from Chile and co-founded by Alejandro Matamala and Cristóbal Valenzuela, has reached the coveted unicorn status. (LL)
Global Founders Capital is streamlining its operations in Latin America, with Fabricio Pettena set to single-handedly manage the local team. This development follows the recent departures of Alex Anton and Guilherme Penna from the venture capital firm. (GFC)
Shopify has unveiled Shop Cash, an innovative rewards program designed to incentivize shoppers. The program offers a 1% cashback on purchases made through its Shop Pay online checkout service, enhancing the shopping experience and fostering customer loyalty. (Shopify)
Featured Jobs
Contracts Manager @ Ware Malcomb. Regular attendance at work is required (United States, Canada, Mexico and Brazil)
Senior Software Engineer, Python Go @ Bitso (expected to work remotely)
Growth Director @ Bitso (expected to work remotely)
Toolbox
tools, websites and accessories
→ The tl;dv app Aptly named amidst the recent AI hype, provides a practical solution for managing lengthy video calls on platforms like Google Meet and Zoom by transcribing and summarizing them.
→ Clearspace A small app that introduces an 'intentionality layer' to your iPhone apps, prompting you to pause and breathe before accessing them, thereby making your app usage more deliberate. The app also enables you to set session times, automatically exiting you from an app after a specified duration.
→ Omnivore, the free and open source alternative to Pocket and Instapaper, has recently caught the attention of the tech community. While some may prefer the bells and whistles of the new Readwise Reader, as a self-proclaimed 'power user,' I can confidently say that Omnivore is a noteworthy contender. With its cost-free service and seamless functionality, it just might be the solution you've been searching for.
Thoughtful Reads
This piece emphasizes the often overlooked significance of maintenance in engineering. Rather than focusing on delivering grand projects, thoughtful engineering is about creating flexible solutions that prolong the lifespan of existing infrastructure. It's in these complex adaptations of older systems to new realities, embodying social accountability, that we find a grounded view of engineering.
→ A belief in meritocracy is not only false: it’s bad for you:
This piece effectively dismantles the notion that modern rewards should be allocated based on skill and effort, a belief central to meritocracy. Research suggests that endorsing meritocracy can foster selfishness, reduce self-criticism, and even encourage discriminatory behavior. Meritocracy, therefore, is not just flawed but harmful. It serves as an ideology that justifies the status quo and reinforces the psychological inclination to perceive the world as just.
→ Modern Religions For A Lonely World (with audio)
Cultural theorist Matt Klein likens online and social movements to modern forms of traditional religions, providing shared values and rituals. He suggests that as traditional religion declines, careers have filled the void, becoming a substitute for religious devotion. Klein advocates for addressing the systemic causes of this societal void and exploring the role of communal activities in fulfilling these needs.
Findings by Peter Bihr
Peter Bihr is an independent advisor specializing in emerging tech and societal impact, currently serving as a special advisor at Mercator Digital Society, and previously at the European AI Fund; he is also a co-founder of ThingsCon and a Mozilla Fellow.
A question worth asking: ‘Can I just try this out? Is it reversible?’ It’s a great way to not sweat every decision. Alas, I don’t remember where I got that advice but it’s served me well.
A book worth reading: Where Wizards Stay Up Late by Katie Hafner and Matthew Lyon is a mid-90s book about the origins of the internet, reminding us that it was designed by people, with intent. We can design and change it to our needs.
An activity worth doing: Taking long walks – or even short ones! As boring and clichéd as it sounds, it’s a fantastic way to restore energy and calm the mind. And it’s a (medically proven) method for improving your overall health.
A podcast worth listening to: WeCrashed: The Rise and Fall of WeWork is a great mini series that reminds us to never buy into the hype around fast-growing tech startups, even and especially if there are huge sums of investment money involved.
A piece of advice worth passing on: One of the most important aspects of an enjoyable work life is the people we get to work with. For me, the key is to understand and trust them. Almost everything else follows from there. (Tip: keep a list of people you’d love to work with if the opportunity arises.)
Events
Startup Évora Summer 2023. 3 years Startup Incubation plan(2023/09/20)
Rendering of the Americas. Convention for the animal recycling industry for the countries in the American continent (2023/08/02)
Deals
Digibee | Series B | $60,492,408.00 Digibee is an enterprise integration Platform-as-a-Service (eiPaaS) that accelerates digital transformation efforts. (Investors: Goldman Sachs Asset Management)
The Green Coffee Company | Series C | $25,000,000.00 The Green Coffee Company, allows our farms and partner producers to export a diverse range of offerings.
Airbag Technologies | Seed | $700,000.00 SaaS and Mobile telematics app focused on reducing transit accidents caused by the driver’s behavior (Investors: Impacta VC)
Wall Street Memes | Initial Coin Offering | $4,000,000.00Wall Street Memes is the most popular crypto community meme coin - the ultimate anti-capitalist Web3 symbol.
Onfly | Series A | $16,295,934.00 Onfly is a technology startup for travel management and corporate expense management. (Investors: Cloud9 Capital, Left Lane Capital)
Academy Abroad | Funding Round | $80,656.00 Academy Abroad believe that education is the key to a prosperous future and that travel can transform people's lives.
MERU | Pre-Seed | $6,000,000.00 Meru is the one stop shop platform that is optimizing the automotive aftermarket supply chain for mechanics in Latam.
GrupoTusMaquinas | Seed | $1,200,000.00 We're a Marketplace specialized in services for big machines: lend, sell, finance.
Batech | Seed Batech is an artificial business intelligence firm that focuses on technical solutions that provide value to businesses.
Cero Pollito | Pre-Seed We are 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.
Hackmetrix | Convertible Note | $1,300,000.00 Hackmetrix helps startups improve their security complying with industry standars like ISO27k or PCI. (Investors: Daedalus Ventures)
Cumplo | Non-equity Assistance Cumplo is the largest SMB lending network in Latin America (Investors: Start Path Small Business)
Tuhabi is a Latin American prop-tech, secures a $50M credit line to increase operations in Mexico from (Investors: Victory Park Capital)