This week in LATAM startups: Crisis in VC raising during 2023

Also: Falabella Ecosystem has its 1st unicorn. South American startups growth operations in Mexican territory. Women changing game in LATAM VC. Unstructured data a rare hot area for startup funding?

Welcome to our weekly newsletter covering the latest news and trends in the Latin American startup scene.

Obstacles to raising capital in 2023 —according to LATAM entrepreneurs

Inflation (stagflation?), high interest rates and lack of profitability in startups (derived from the devaluation of purchasing power among consumers), are some of the obstacles to raising capital in 2023. Entrepreneurs tell us how they have dealt with it.

Clara, a fintech unicorn for business credit and expense management, raised a USD$60 million investment round led by GGV Capital in April of this year. “Unlike in 2021, when we raised three capitalization rounds quickly, raising in 2023 required much more attention,” said Gerry Giacomán, CEO in an exclusive interview with Contxto, from his office in Brasilia, the capital of Brazil.

Mega venture capital rounds (above USD$50 million) have not been seen in Latin America for about ten months, but in the second quarter of 2023, Mexican fintechs brought them back. In addition to Clara, in May Kapital raised USD$65 million (USD$20 million in Series A led by Niya Partners and Tribe Capital; and USD$45 million to place in debt).

Read the complete article on our site.

Vía Contxto

---

Pismo becomes the first Unicorn of the Falabella fund

In June, Visa announced the acquisition of the Brazilian payment platform Pismo for US$1 billion in a move to expand its presence in Latin America. With this operation, the Brazilian startup becomes the first success story of the Falabella Ecosystem, turning into a unicorn.

Pismo, founded in 2016, is a payment processor and central banking platform operating in Latin America, Asia Pacific, and Europe. In 2019, Falabella started collaborating with Pismo to develop the digital wallet Fpay, a platform where users could load their cards digitally regardless of the banking entity and make transfers using a QR code.

In 2021, Pismo raised US$108 million in a Series B funding round led by the Japanese conglomerate SoftBank, along with Amazon, Accel, B3, Falabella Ventures, PruVen, and previous investors Headline and Redpoint Ventures.

Vía Contxto

---

Quick News

1. Pretech and Quantum Pay authorized as fintech to operate in Mexico. Currently, there are a total of 61 authorized fintech companies in México, of which 39 are IFPEs and 22 are Collective Funding Institutions. And Pretech and Quantum Pay join to the list. (Contxto)

2. The Ecuadorian unicorn Kushki grows 3 times its transactions in Mexico. The country is already the most important for the Kushki operations, as it concentrates about 30% of its workforce. During the first half of 2023 it reported a growth of 200%. (DPL News)

3. Chilean DataScope participates in Google's fund for Latin Found. The startup DataScope will have access to a series of incentives to develop new artificial intelligence applications to optimize its services in the region and will receive US$150,000. (Contxto)

4. Gas Up! Master Coffee conquers Shark Tank. The country's largest coffee e-commerce company received investment from Marcus Dantus and Alejandro Litchi. Each will invest $500,000 for 5% of the company that billed $3.5 million in 2022. (Emprendedor.com)

5. Great Learning by BYJU’S arrives in Mexico. The global company in educational technology for higher and professional education offering programs in collaboration with prestigious universities such as Texas McCombs and MIT, arrives in Mexico through the edtech BYJU’S. (Contxto)

6. Jüsto's next target is to enter Colombia and Chile. The Mexican online supermarket registered a 400% growth last year. Mexico is the main market for this startup, representing 60%; the other 40% is distributed between Peru and Brazil. (WIRED en Español)

7. Ualá partners with Western Union for mobile remittance reception. The Latin American multi-banking fintech, Ualá, has announced a partnership with Western Union to enable Mexican users of the application to receive money on their phones from friends and family worldwide. (Contxto)

8. Startup Voltera will begin operations in Chile with electric cars. The company will bring from China 500 units of a model with an autonomy of 415 kilometers to be used as a unit in mobility applications. (Diario Financiero)

9. Jüsto creates an accelerator for SMEs aiming to become the largest in LatAm. Jüsto Accelerator is born at a time when it is projected that grocery delivery in Mexico will reach revenues of US$4.7 billion in 2023. (Contxto)

10. TikTok launched its streaming music service in beta version in Mexico. TikTok Music will host music from major record companies. The launch comes two weeks after being available in Brazil and Indonesia (TechCrunch).

---

Finds

tools, websites and accessories

1. Bookipi. An invoice generator for freelancers and small businesses across industries where you can create and send invoices for your customers from anywhere on web or mobile app.

2. Dokably. A single app that blends docs, whiteboards, notes, tasks, and more, all in a one place, so you can visualize ideas that way you like.

3. Cospace. A safe and private team collaboration tool to manage all your processes, files, and data, with analytics, communication tools, advanced project managemente, and more.

---

Food for Thought

1. The Women Changing the Game in Latin American Venture Capital

   This article showcases top female figures in Latin American venture capital, breaking barriers and paving the way for future female leaders in the startup and investment sphere. Anna Raptis, Founder & Managing Partner at Amplifica Capital, promotes professional development of women in Mexico. Marta Cruz, a co-founder at NXTP Ventures, leads initiatives to support women entrepreneurs and bolster the Latin American startup ecosystem.

   Susana García-Robles, a senior partner at Capria, co-founded WeInvest Latam and WeXchange, platforms to connect and support female entrepreneurs and investors. Johanna Posada, co-founder at Elevar Equity, has significantly contributed to the firm's success by investing in high-growth businesses. Antonia Rojas, partner at ALLVP, stands out as the youngest VC Partner in Latin America. These women are instrumental in fostering a dynamic startup ecosystem in Latin America, and will continue to drive innovation and progress. (Hyper LATAM)

2. Fintech in Latin America: Key Trends in 2023 and Beyond

   The Latin American (LatAm) fintech sector has grown rapidly, driven by rising online banking demands, favorable demographics, and a significant underserved population. The pandemic accelerated this disruption, with the post-Covid fintech sector attracting substantial foreign direct investment. In 2022, fintech led venture capital investments, with a 2x increase in deals and 3.7x surge in capital invested compared to 2020, reaching $6.1 billion across 258 transactions. The sector is critical in promoting financial inclusion and offering advanced services to the underbanked. Key trends shaping the regional fintech landscape include the rise of neobanking, digital payments and e-commerce, insurtech, and embedded finance/open banking. (INNREG)

3. Unstructured Data Is A Rare Hot Area For Startup Funding

   The vast amounts of digital data collected by enterprises are generating increasing interest and investment in data automation, orchestration, and unstructured data management tools. Despite overall startup funding decreasing, there's a rise in capital flowing to startups with expertise in these areas. Hammerspace, a developer of unstructured data orchestration tools, recently secured $56.7 million in its first institutional funding round. According to a Crunchbase analysis, startups offering tools for managing unstructured data, data automation, and data orchestration have collectively raised over a billion dollars in the past year. Notably, data management startup Databricks recently agreed to acquire MosaicML for $1.3 billion. (Crunchbase)

---

Worthy Recommendations

1. Podcast Worth Listening:

Emprender en cabeza ajena. This podcast, an initiative of Bitso, the Mexican digital payments unicorn, features guest entrepreneurs who share their experiences of successes and failures that teach the audience that it is possible to learn from someone else's head.

2. Book Worth Reading, according Antonio Nunes, Instaleap’s CEO:

Predictable revenue by Aaron Ross, Marylou Tyler. Instaleap’s CEO Antonio Nunes says that "it is probably the best book on how to set up sales processes for a software as a service company and is a must for any entrepreneur working in the SaaS world".

---

Jobs

Executive Assistant to CEO @ Yalo (Mexico City, expected to remote work)

Auxiliar Segments & Channels @ Frubana (Bogotá, Colombia, expected to hybrid work)

Growth Hacker @ BeGo (Mexico City, expected to attend to work)

Street Hunter @ Rappi (San Luis Potosí, Mexico, expected to hybrid work)

Senior Accountant @ La Haus (Mexico City, expected to hybrid work)

---

Deals

These startups and companies received capital this week:

1. Mombak | Cleantech. Mombak is a carbon removal company that focuses on the reforestation of the Amazon that raised US$49 million in a round led by AXA Investmentes Managers.

2. Foodology | Foodtech. Foodology raises US$17 million. The investment was led by 30N Ventures, with participation from a16z and Chimera.

3. Blue Fleet | Software | Series A. The Brazilian startup is a fleet Management SaaS. The investment was led by Google for Startups.

4. Anta | Telecommunications | Serie A. Colombian telecommunications provider focused on rapid development rural and semi-rural areas, the amount of this round was not disclosed.

5. Konfío | Fintech | Debt. Konfio, a Mexican unicorn, renewed this credit facility for US$90M (MXN$1.5B), which runs through 2025. The renewal with J.P. Morgan marks the fourth such renewal this year.

6. Conceivable Life Sciences | Biotech | Seed. It seeks to position itself as an innovative alternative for families aspiring to have children by laying the groundwork for the introduction of automated in vitro fertilization services. Stride.VC, ACME and Cadence Ventures, Future Positive and Black Opal Ventures participated in this round.

7. iFriend | Traveltech | Crowdfunding. The Brazilian startup which offers travelers tourist experiences in more than 132 countries, raised some US$479 thousand. The value was reached after a round via a public offering on Captable.

8. Culttivo | Agtech. The Brazilian credit startup for coffee growers, raised US$14.5 million to scale the startup's credit capacity with small and medium-sized producers. Culttivo raised the funds through a FIDC from FIAgro and will be used to scale the startup's credit capacity with small and medium-sized producers.