This week in LATAM Startups: Goodbye unicorns, hello slow horses
Late-stage startups are suffering from the venture capital drought in Latin America, while seed-stage startups continue to grow, as is the case of Vetalia in Mexico.
Welcome to our weekly newsletter covering the latest news and trends in the Latin American startup scene.
Goodbye LATAM’s unicorns, hello slow horses
It has been over a year since the gallop of a new Latin unicorn has been heard. From what we have researched, it will be months before this happens again. According to the venture capitalists interviewed by Contxto, we will not see new Latino startups valued at more than USD$1 billion in the short term.
The most optimistic believe that in six months we could have new unicorns, but most agree that it will take 12 to 18 months for them to emerge again.
This is not just a Latin American situation. The birth of unicorns in the world has been declining for the last five quarters. Globally, 148 unicorns emerged in the second quarter of 2021, 90 unicorns during the second quarter of 2022 and this year only 18 were born in the same period, based on data from CB Insights. Half were born in the United States and five in Asia. LATAM: well, thank you.
Last quarter the emergence of unicorns in the world was at its lowest level in the last six years, with only 15 unicorns. In the second quarter, three more unicorns represented a 20% increase. What's happening in Latin America? Investors consulted explain the situation and give their forecasts.
Vía Contxto
Vetalia: The startup redefining animal care in Latin America
Vetalia, founded by María Gutiérrez and Marion Benítez Landa in 2021, was established as a Mexican startup for veterinary services aiming to transform the pet care experience in Latin America.
Recently, Vetalia raised USD$10 million which will allow it to implement a one-stop-shop technology platform. Its goal: to transform the veterinary sector.
To achieve this, Vetalia specializes in pet care through modern clinics and a technological platform that aims to provide a comprehensive solution, a “one-stop-shop” for all aspects of pet care.
“We deeply understand the industry and know the market we operate in. Our founding team has 28 years of experience in the pet care industry in the region. Providing a comprehensive service: a service that begins before and does not end when you leave the store is our value proposition,” the entrepreneurs declared exclusively for Contxto.
Vía Contxto
Quick News
Rapyd acquires PayU, expanding its Fintech and payment solutions globally. The acquisition of PayU positions Latin America as one of the key regions for Rapyd, accounting for about 25% of its global business. (Contxto)
Chile's startups are still growing and resilient. Last year, Chile received between 40% and 50% less VC investment compared to 2021, says Federico Iriberry, CEO of Broota. But the outlook is not discouraging. (Forbes)
KAVAK announces a US$40 million investment in Chile. The Mexican startup also announced that 40% of its customers purchase their first car through its platform in Mexico. (Contxto)
Banco Santander presented the first edition of Santander X Award/Startup Mexico 2023. It seeks to boost national startups through financial support of 1.1 million pesos and international advice. (El CEO)
inDrive obtains registration certification to operate in Mexico City. With this action, inDrive strengthens its presence in Latin America and globally while aiming to offer the “fairest” market rates. (Contxto)
Startups seek the break-even point. Faced with the dramatic drop in venture capital, 33% of Latin American startups saw their plans to raise capital frustrated and 51% less funding, according to the firm Sectorial. (Bloomberg Línea)
Bitypreço and Biscoint Launch the Bitybank Crypto Card in Collaboration with Pomelo. Users can use cryptocurrencies and fiat money in everyday purchases, with benefits such as enhanced cashback and easy integration. (Contxto)
A startup that facilitates the payment of salaries by the day will invest USD$5 million in Peru and Colombia. The startup Payflow uses the on-demand salary model for formal employees, which is very popular in the United States and Europe and wants to democratize it in Latin America. (Forbes)
Jüsto, the Mexican online supermarket, has grown 400% since its foundation. Artificial intelligence plays a key role at Jüsto, allowing the company to anticipate user behavior and offer a more personalized and satisfying shopping experience. (Marketing4ecommerce)
Betterfly, the Chilean unicorn, is recognized as one of the most promising insurtechs in the world. The consulting firm CB Insights highlighted Batterfly as the only Latin American insurtech in the top 50. (Contxto)
Finds
tools, websites, and accessories
Todoist. It's a task management tool that helps you keep your tasks organized and prioritized. With Todoist, you can create projects, assign tasks and set deadlines.
Videoleap. It is an application designed for video creation. It has a wide variety of functions to trim clips, insert filters, adjust the volume of each video, add opacity, add zoom, and duplicate the desired videos or images.
Neolo Email Marketing. This is an email marketing tool that allows you to create and send emails to your subscribers. It also allows you to create sign-up forms so that your website visitors can subscribe to your email list. Neolo helps you achieve more opens and more visibility.
Food for Thought
In Latin America, Fintech Tackles Big Problems with Micro Solutions
Fintech is playing a transformative role in Latin America, addressing financial challenges exacerbated by high-interest rates and a significant underbanked population. McKinsey's recent report shows retail banking, especially micro-loans, deposits, and retail payments, driving growth in the sector. Despite the reliance on cash, alternate digital payment solutions, like Brazil's PIX system, are emerging. Cryptocurrency is another promising area, currently accounting for 9% of the global market share. Regulatory collaboration is essential for sustainable growth, with calls for clear rules around financial stability, consumer privacy, data protection, and interoperability. The sector also faces cybersecurity challenges, prompting investment in technologies such as AI and blockchain. International players eyeing the region are advised to consider the unique cultural, economic, and regulatory nuances of each country, with potential areas for investment including DeFi, payments, and savings apps. (Finance Magnates)
Why is it Vital to Continue Promoting Female Technological Leadership in Latin America?
The emergence of new technologies underscores the need for capable leaders to integrate these advances into products and solutions. However, if leadership is dominated by men, it exacerbates the gender gap, particularly in STEM fields where women hold only 22% of roles. Although the landscape is gradually changing, with more women leading tech startups, the gender disparity persists. Latin America should strengthen inclusive and non-binary leadership in sectors such as fintech, healthtech, agtech, and edtech. Fintech startups have the highest rate of female founders in Latin America at 35%. Women entrepreneurs have proven to be drivers of economic change, and according to the 2021 Mastercard Index of Women Entrepreneurs, female entrepreneurship could add up to $5 trillion to the global economy. To achieve UN Sustainable Development Goal 5 on Gender Equality, this shift needs to accelerate. (Forbes Chile)
How We Optimized Performance To Serve A Global Audience
Liran Cohen and the team at Bookaway, a travel booking service, used Google's Core Web Vitals as a tool to significantly improve their website's performance and SEO. In this article, Liran discusses their auditing process, which involved evaluating performance metrics like Largest Contentful Paint (LCP), First Input Delay (FID), and Cumulative Layout Shift (CLS). These metrics helped to identify issues and optimize the user experience, from page load time to visual stability. They monitored performance in real-time using Next.js, stored data in BigQuery for analysis, and visualized data with Looker Studio. The result was improved site compliance with Google's standards and enhanced search presence. (Smashing Magazine)
Worthy Recommendations
Book Worth Reading, according to Matías Recchia, Keyway’s CEO:
Zero to One by Peter Thiel (co-founder of PayPal) and Blake Masters. “He talks a little bit about how there are a lot of entrepreneurs who try to put together the whole business model and the whole company and the whole infrastructure before they launch. First, you have to do things that don't scale, very manually, to start putting the action together and understand the customer well, not going in with your idea of what the business is going to be and thinking you understand everything about the market, but starting from scratch with a minimum viable product that you can test in the market and talk to consumers", Recchia says.
Documentary Worth Watching:
The Inventor: Out for Blood in Silicon Valley. This HBO documentary released in 2019 presents in an accurate and detailed way how Elizabeth Holmes managed to fool all venture capital investors and convinced them that Theranos was a reality and how Wall Street Journal journalist John Carreyrou uncovered this lie.
Jobs
Organic Media Specialist at Merama (Mexico City, attendance at work is required)
Personal Advisor Backup at Rappi (Mexico City, expected to hybrid work)
Corporate and Strategy Director at Stori (Mexico City, attendance at work is required)
Customer Success Specialist at Clivi (Mexico City, expected to hybrid work)
Senior Software Engineer at Nelo (Mexico City, attendance at work is required)
Deals
These startups and companies received capital this week:
FCJ | Venture Builder | Serie A. The company is an Venture Builder that has raised USD$4,5 million.
Licify | SaaS and Fintech | Seed. The Colombian startup raised USD$3.4 million to start operations in Mexico. The round was led by Brick & Mortar Ventures and Accion Venture Lab, with participation from Dash Fund, G2 Momentum Capital and Columbia University's venture capital fund. .
ZeroQ | Artificial Intelligence | Seed. ZeroQ raises USD$3 million in its opening on the Santiago Stock Exchange. It focuses on improving customer service management through its Artificial Intelligence-based software that transforms the management of waiting times for customer service. It will use the capital to boost its growth plan in the region and land in Peru and Colombia.
Speedbird Aero | Logistics | Seed. The Brazilian drone delivery startup based in São Paulo received a USD$2 million investment from MSW MultiCorp 2, a fund managed by MSW Capital, which includes Embraer, BB Seguros, Batteries Moura, and Age-Rio as investors.
ConfiAbogado | Legaltech | Seed. The Mexican startup raised USD $1.65 million in seed funding, with the purpose of expanding its reach and improving accessibility to legal services in Latin America. The round was led by Tuesday Capital and included a group of investors comprising DTB Capital, Seedstars International Ventures, 500 Global, Invariantes, Goodwater, GAIN Capital and Side Door Ventures.
Zhana Solutions | Climatech | Seed. Zhana Solutions raised USD$1.2 million, with the participation of Fondo Alphamundi, Fondo Acción, Fondo Impacta from Universidad EAN, Fondo Asiri, and angel investors. Zhana Solutions focuses on industrial waste management, especially wastewater treatment, mainly in restaurants.
Cubo | Fintech | Seed. Cubo's mission is to empower MSMEs and entrepreneurs with financial technology. This USD$750,000 investment is part of Cubo's seed round, which was raised with the objective of expanding its customer base and continuing to drive the digitization of SMEs in Central America.
Kigüi | Climatech | Seed. Kigüi, an Argentinean startup against food waste, received USD$250,000 from Amazon through the AWS Impact Accelerator for Latino Founders program.
Datascop | Fintech | Seed. DataScope received USD$150,000 from Google's Latino Founders Fund, the fintech seeks to help Latino entrepreneurs grow their businesses in San Antonio. To date, DataScope has 36 employees in Texas, Mexico, Argentina, Brazil, and Chile, more than 400 customers, and has already reached US$1 million in annual revenue.
DISHU skincare | Wellness | Pre-Seed. The Mexico City-based startup makes people's acne process easier and more friendly. The amount was not disclosed.