This week in LATAM Startups: Rise & Fall of Casai + Polymath, a VS for middle class
Lessons from Casai. Polymath Ventures profile. Unreasonable 2023. Argentina: the largest number of companies with disruptive DNA. AI + Politics. Hybrid Delaware-LATAM Legal Structure? —& 10 VC deals.
Welcome to our weekly newsletter covering the latest news and trends in the Latin American startup scene.
Casai: analysis of the startup that cut its dream of becoming a unicorn
Casai was a promise for the startup ecosystem in Mexico, but the venture capital context did not favor its growth. However, threats were not the only determining factor for its closure. What were the weaknesses of its model and operation?
Created in 2019 by Nico Barawid and María del Carmen Herrerías, the luxury short-stay startup was so attractive to venture capital funds that from an early stage they deposited large amounts of venture capital.
The venture capital drought in 2022 ended up truncating the dream of becoming the first Mexican proptech to become a unicorn. At the end of May 2023, after four years of operation, Casai closed operations definitively in Mexico, the market on which it had focused after closing Brazil in January 2023.
What were the internal causes of Casai's closure? Among others, lack of cash flow control, informality in the operation and not knowing how to adapt to the adverse context.
Vía Contxto
Polymath Ventures: A Venture Studio for the Middle Class in LATAM
Polymath Ventures was born in 2012 as a venture studio with the purpose of bridging the gap of inequality and the paradox of middle-income in Latin America. It has offices in Bogotá and Mexico City. It has raised USD$70 million in capital and debt across the group.
Polymath conceived its studio with the aim of creating technology companies designed to increase the population integrated into the middle class in the region, which accounted for around 311 million in 2019, including both lower-middle and upper-middle class individuals with a per capita income between USD$10 and USD$50 daily, according to the International Monetary Fund, Trading Economics, LAVCA, The Information, World Bank, and Pew Research Center.
Polymath has created a portfolio of ventures that include: Elenas, the main social commerce marketplace in Latin America, based in Colombia, helping women achieve financial independence and Pacto, a Mexican technological platform for restaurants and bars that improves service experience and accelerates business growth.
Vía Contxto
Quick News
Rockstart to invest USD$6 million in early-stage LatAm startups. For this call, 10 startups will be selected to receive USD$10,000, including the value of the program, in exchange for a 6% equity stake in each company. (Contxto)
Leading Argentine startups. According to the Inter-American Development Bank, Argentina has the largest number of companies with the potential to make disruptive transformations in Latin America. It has a total of 103 startups of this type, 30 percent of those counted at the regional level. Most of them are at an early stage of development (Página 42).
Foundation Chile will sponsor startups seeking to raise funding on the Santiago Stock Exchange. This foundation will offer guidance to technology-based companies to access new financing on the Santiago Stock Exchange. (Contxto)
The 10 startups of LATAM Unreasonable 2023. The Mexican program will accelerate startups from all over Latin America: Chica Bean (Guatemala), DiiMO (El Salvador), Negocio Mejor (Honduras), MedETechni (Nicaragua), GLYA (Colombia), CAAS (El Salvador), LOKL (Colombia), MUSA (Nicaragua), Vitrinnea (El Salvador) and ELEVATE (Honduras). (Plano Informativo)
Kamay Code is coming to São Paulo to connect the innovation ecosystem.
Kamay Code will take place in Mexico City this year, and in Bogota, Colombia in 2024. The aim of nurturing and strengthening ties with the region’s technological ecosystem and talent. (Contxto)
Tips for startups to survive the crisis. Alejandro Alberto Zubiria, regional representative for TRUST companies, offers valuable recommendations and tips for startups to survive and thrive in times of economic uncertainty. (Vértigo Político)
Nubank reaches 80 million customers and surpasses Banco do Brasil. The Brazilian unicorn has been investing in the growth of its customer base in Mexico and Colombia, expanding its presence in Latin America. (Contxto)
The five sales metrics that show your startup is really growing. Forget the vanity metrics; those KPIs or measurement points that offer a false reading of your business growth, Pluria's CEO gives his recommendations. (Forbes)
Jeeves expands its offer with cross-border payments and local prepaid cards. The unicorn will allow customers to move funds in and out of Brazil, Colombia, and Mexico within 24 hours. (Contxto)
Points that startups should take into account before closing an investment round. According to Liliana Reyes, CEO of the Mexican Private Equity Association (Amexcap), startups should prepare and train themselves, what else is recommended? (El CEO)
Finds
tools, websites and accessories
Keka. This tool lets you compress large files for storage with the smallest possible footprint. You can also encrypt and password-protect files in the process.
Briskine. It is a TextExpander-like browser plugin (all major browsers supported) that lets you create canned responses and other text snippets via shortcuts. The tool has customisables variables that automatically insert, for example, the first name of the recipient into your text templates.
Bookmarked. More small publishing projects like this please: “A weekly newsletter following my journey as I read one book from every country." You get a short review of a book from a different country with each issue of the newsletter.
Food for Thought
Six ways that AI could change politics
ChatGPT has introduced various potential implications on daily life, professions, and even governance systems, with concerns about AI threats to democracy being a prevalent topic. Public discourse often falls short in its imagination of these threats, focusing on familiar issues like fake media campaigns and misinformation from foreign governments, rather than exploring novel risks. While the impact of AI on politics can appear alarming, it also offers potential benefits. Establishing meaningful, plausible, and observable benchmarks for political AI can provide clarity. However, attributing a specific electoral outcome to AI remains challenging due to the complexity of elections. (MIT Technology Review)
Bluesky, a new invite-only social media platform, offers a refreshing user experience, harking back to the early days of Twitter. An open-source, decentralized social network like Mastodon, Bluesky is more user-friendly, with a familiar interface and customizable content moderation. However, its claim of decentralization is still theoretical, with Bluesky Social being the only site utilizing Bluesky's decentralized AT Protocol. Despite its appeal, questions linger regarding Bluesky's ownership, the role of former Twitter CEO Jack Dorsey, its business model, and safeguards against potential hostile takeovers. Bluesky, which started with USD$13 million from pre-Musk Twitter, remains in the spotlight for these reasons. (The Intercept_)
Why a Hybrid Delaware-LATAM Legal Structure is Ideal for Startup Success
A hybrid Delaware-Latam legal structure enables Latin American startups to align their local and US entities, offering benefits like improved access to funding, increased credibility, and better tax conditions. By making the Latam company a wholly-owned subsidiary of a Delaware company, startups can operate in both markets, leveraging the advantages of each. This structure also helps reduce risks associated with foreign business operations, such as regulatory and legal issues. (Hyper LATAM)
Worthy Recommendations
Book Worth Reading:
Emprendimientos de base científico- tecnológica en América Latina by BID. This IDB book discusses how research agendas are often poorly linked to the problems of society and business, and the rules of the game in the academic and scientific world restrict the creation of scientific ventures. The Mexican entrepreneurship movement Rómpelo a la mexicana offers a free download of this book.
Podcast Worth Listening, according Joaquín Abal, venture capital investor in the Mexican fund, DILA Capital:
Lattitud Podcast. “I like it very much because it is very focused and much more detailed in operational terms, not so much in more conceptual issues, but it brings down to earth many things and generates a very detailed and actionable insight for entrepreneurs and operators”, says Abal.
Jobs
Industry Relations Jr. Manager at Clip (Mexico, City, attendance at work is required)
Incubator at Shein (Mexico, City, attendance at work is required)
Comms and PR Sr Analyst at Merama (Mexico, City, attendance at work is required)
People Services Analyst at Nu (Mexico, City, expected to hybrid work)
Personal Advisor at Rappi (Mexico, City, expected to remote work)
Deals
These startups and companies received capital this week:
Bright | Solar Energy | Serie C. Bright is a solar panel startup for homes and businesses. The Mexican startup raised USD$31.5 million in a round led by Danish ODS Investment Fund (IFU).
InvGate | SaaS. InvGate receives USD$35 million in round led by Riverwood and Endeavor Catalyst.
Sanasa Campinas | Cleantech | Debt. Sanasa Campinas provides water treatment, loss control, sewage treatment, environmental, waste management, repair and maintenance services. This week raised USD$55 million of International Finance Corporation.
ZoomAgri | Agtech | Serie A. Argentine Agtech ZoomAgri raised USD$6 million to boost its global expansion in a Series A financing round led by GrainCorp and GrainInnovate. The round also included participation from SP Ventures and Artesian.
UrgentMED | Healthtech | Unknow. UrgentMED expertise in offering healthcare services along with diagnosis services, based in El Salvador. The healthtech raised USD$54.5 million.
Construex | Construction | Seed. Construex connects key stakeholders and information in the construction, architecture, and design industry. The Ecuatorian startup has raised USD$4.1 million.
Apprenty | Edtech | Seed. Brazilian edtech Apprenty raises USD$1.6 million to get young people into the job market in a round led by Canary, with the participation of Positive Ventures, Potência Ventures and Latitude Ventures.
Hospitales MAC | Health | Debt. The Mexican hospital chain raised USD$160 million in a private equity round led by General Atlantic.
Virya Capital | Venture capital. Virya Capital focuses on identifying, acquiring, and managing single small- to medium-sized businesses and recently raised USD$7 million.
TelevisaUnivision | Entertainment | Debt. TelevisaUnivision raised USD$500 million in debt this week.