This week in LATAM startups: WTFlux is happening with the startup ecosystem in Mexico and Brazil?
Find out how Mexico's Telecommunications Reform boosted the entrepreneurial ecosystem, how Brazil is struggling to raise more venture capital —as well North America— this 2023. A crazy week, folks.
Welcome to our weekly newsletter covering the latest news and trends in the Latin American startup scene.
Democratized Connectivity for Startups in Mexico
A few days ago, the Telecommunications Reform in Mexico marked a decade since its enactment, which represented a landmark for the creation of effective competition and the efficient development of telecommunications markets in the country.
The Telecommunications Reform has not only promoted ventures by virtual mobile operators (OMV) that compete with traditional ones, but has also resulted in a greater adoption of digital services that have caused a proliferation of startups that provide solutions through a smartphone and mobile data.
Santiago Zavala, managing partner of 500 Global in Latin America, recalls that in the nascent Latin American entrepreneurial ecosystem, back in 2013, the fact that people could have internet and mobile apps on their cell phones gave the possibility to create startups with different proposals, very Silicon Valley style.
Vía Contxto
Investments in Brazilian startups decreased during the H1 2023
Brazil, the country with the most venture capital investments in Latin America, is struggling to raise more capital in 2023. According to the Inside Venture Capital survey by business platform Distrito, venture capital investments in Brazilian startups declined by 51.4% in the first semester compared to the same period of the previous year.
Additionally, the number of transactions also experienced a 63.2% decrease in the same comparison. During this period, a total of $778.1 million was invested in 199 rounds of funding. The last time the number of investment rounds was below 200 was in the second semester of 2017, when there were 167 rounds totaling $386.6 million, as reported by Startups.
Distrito explained that these results were impacted, among other factors, by the crisis of the Silicon Valley Bank (SVB) in March, as this American bank is widely used by startups and venture capital funds.
Vía Contxto
Monopolio: the Mexican proptech that seeks to invigorate the real estate sector
Faced with the complexity and risk of applying for a real estate loan in the traditional way, Jorge Combe and Martin Werner decided to found DD360 in 2017, a subsidiary of DD3 Capital Partners, which specializes in providing financial solutions in the capital markets for real estate development companies.
As DD360 grew its portfolio of loans for real estate developers, Combe and Werner discovered that some traditional real estate practices represented an area of opportunity for their company. Chief among them: lack of information.
So, Monopolio was born: a proptech that promises to provide transparency and sophistication to consumers who want to invest in real estate or who want to buy an apartment or house to live in. In other words, it is a virtual real estate advisor that provides assistance in real time for any real estate search or transaction, thanks to artificial intelligence, which promises to compete against already established proptechs.
Vía Contxto
Quick News
Chilean Alliance in Mexico. There are more than 500 Chilean companies in Mexico, along with several executives holding prominent positions in Mexican companies. This fact led to the creation of the Association of Chilean Entrepreneurs in Mexico (Acemx). (Contxto)
Threads takes root. Twitter's competing Meta app surpassed 10 million registrations just seven hours after its launch. This is an opportunity for ecommerces and ebusiness with high social media leads awareness and engagement. Read how use it for your purposes. (Entrepreneur en Español)
Nestlé and The Yield Lab LATAM launch a program for sustainable startups. This program aims to support sustainability projects and facilitate pilot tests in the Mexican market. (Contxto)
Biotech startup triumphs. Mexico's Biogrip stood out in an international competition organized by Santander, Microsoft and Oxentia. It was one of the three winners in the 'startup' category of the Santander X Global Challenge | The AI Revolution. (Entrepreneur en Español)
Venture capital shortage. In the first quarter of 2023, USD$406 million was invested, the fourth lowest figure since 2017 because of high interest rates. The figure represents an 88% drop from the USD$3.382 billion invested in the first quarter of 2022, reveals a study by Glisco Partners and Endeavor. (Business Insider)
Tech companies improve their eNPS to +37 in 2023. Nailted, a technology startup focused on improving employee experience, has released a comprehensive analysis of the employee experience in technology companies. (Contxto)
Clip and Tiendanube join forces to offer entrepreneurs who sell online a digital payment platform that allows them to accept credit cards, debit cards and vouchers, integrate payments for online sales and receive them on any day, including holidays. (El Economista)
Stasher, the British luggage storage startup, expands to Chile. The entry into Latin America was made possible through the partnership with AirKeep, which offers over 250 available locations for luggage storage in the region's major cities. (Contxto)
Mexican startup seeks to detonate solar energy financing. Finsolar is committed to the development of different solutions in order to make it easier for companies of all sizes to adopt photovoltaic panels without the need to purchase them (Forbes).
Rural startups. Village Capital, in collaboration with Moody’s, has announced the selection of 7 startups from Latin America to participate in the Innovation for Ecosystem Restoration program: LatAm 2023. (Contxto)
Finds
tools, websites and accessories
Holded. This software brings together in a single platform all the management of your company. It is possible to manage invoicing, accounting, projects, CRM and inventory management from there.
Jamf Connect. A browser-based 2FA authentificator for you and your team. Easy import from Google.
Trello. It is a simple and very complete tool that helps to organize any activity. It allows you to easily manage all tasks and work teams. You already konw it, but it has new functions. Check it out.
Focus.txt. A simple, text-based, and short-lived daily planner that allows you to use variables for date, time, check and quote.
Food for Thought
North American Startup Funding Fell Across All Stages In Q2
Is anybody out there talking about a funding crises? Actually, is not the best time ever, but not the worse —yet. North American venture funding continues to decline, that’s a fact: with Q2 2023 showing the lowest total in over three years at USD$31.8 billion for U.S. and Canadian startups, according to preliminary Crunchbase data. The drop is seen across all stages, especially in later rounds (Series C and beyond), and deal numbers are also the lowest in two years. However, some large financings occurred in the quarter, and seed, and early-stage deals have only seen slight quarter-over-quarter decreases, indicating a still robust pipeline of investable companies. The question is, what would you do with this perspective? (CrunchBase)
Did startups overcome the investment winter?
Latin American startups, after experiencing a booming investment and growth period in 2021 and early 2022, are facing an 'investment winter' due to macroeconomic challenges like high inflation rates and increased interest rates. McKinsey & Company's report suggests that these startups, which are now facing their first significant downturn, need to find a balance between growth and profitability. Endeavor's data shows that startups are exploring new financing methods, such as credit lines with traditional banks. In Q1 2023, startups contracted $344 million in credit lines, 2.25 times more than in Q1 2022. Investment funds have shifted their focus from later-stage startups to those at earlier stages, correcting the high valuations previously observed. This new scenario suggests a strategic shift in the startup investment landscape in Latin America. (Forbes México)
Can Twitter Alternatives Escape the Enshittification Trap?
Bluesky, the invite-only Twitter alternative, is gaining traction for its "fizzy, fuck-around energy." It's compared to Twitter's early days, with lively debates and open dialogue, despite being marred by issues like bugs and unclear community rules. However, it wasn't designed as a Twitter competitor, but as a decentralized protocol that other platforms could adopt, allowing different servers to interoperate. Its launch seemed unlikely, as Twitter's relinquishing control over user data seemed improbable. But with Elon Musk's recent Twitter acquisition and the separation of Bluesky from Twitter, the situation shifted. Bluesky's leaders began developing the AT Protocol and an independent social app. This new platform aims to avoid "enshittification" - a term coined by Cory Doctorow to describe the cycle where digital platforms initially draw users in, then change rules to maximize profit, leading to user dissatisfaction and eventual platform downfall. (Wired)
Worthy Recommendations
Podcast Worth Listening, according Joaquín Abal, VC investor at DILA Capital:
The Twenty Minute VC (20VC). It is a podcast by venture capital investor Harry Stebbings, who has access to many entrepreneurs, operators and investors around the world, and has recently started interviewing Latin American people. "The level of insights it gives is very good, it was the podcast with which I started in the world of venture capital," says the DILA Capital investor.
Event Worth Going:
US Angel Investors Meeting. Great startups will be presenting to investors. Mostly tech and healthcare and sometimes other sectors. Mix of stages: Seed, Series A and sometimes beyond. Restricted to accredited investors and a limited number of selected guest entrepreneurs.
Jobs
Content Creator @ Klar (Mexico, City, expected to hybrid work)
Business Development Specialist @ Kavak (Mexico, City, attendance at work is required)
Lead Flutter Developer @ Kiwi (Mexico, City, expected to remote work)
Channel Marketing Specialist @ Tiendanube (Mexico, City, expected to remote work)
Sales Executive @ Nowports (Mexico, City, expected to hybrid work)
Deals
These startups and companies received capital this week:
Shinkansen | Fintech | Seed. Shinkansen enables fintechs and startups to transport money automatically to consumers, suppliers, banks, and conventional networks. It raised USD$3 million in a round led by Mexican fund ALLVP and Chile Ventures, and had Pedro Pineda, CEO of Fintual, as an angel investor.
Orizon | Envaironmental | Debt. Orizon Valorização de Residuos is a waste treatment and recovery company that raised R$130 million from International Finance Corporation.
Somos Internet | Internet | Seed. Mexican fund Nazca participated in a USD$13.4 million round with Kaszek and other funds for Medellin-based Colombian Somos Internet, which offers prepaid subscription internet through an interconnected network.
Nutri Co | Plant Based Food | Seed. Nutri Co raised USD$1 million. The Peruvian startup markets nutritious plant-based products based on superfoods: shakes, bars, cookies, oatmeal and others. MrPink, White Lions, Terraflos Inc, Artfo Holdings Family Office and angel investors participated in the round.
Celes | Retail | Seed. Celes helps medium size retailers prevent stockouts, retain customers and optimize pricing, using pre-trained AI and analytics. The Colombian startup raised USD$1 million from MatterScale Ventures, Primeline Gruop and Rockstar.
NG.CASH | Fintech | Seed. NG.CASH is a digital bank built for GenZ teenagers to teach them in making smart financial decisions with their cash. The Brazilian startup raised USD$1,6 million.
ClickGreen | Fintech | Seed. ClickGreen is the circular economy fintech that raised a Seed round from Cube Ventures and José Bermudez, as an angel inverstor.
GrupoTusMaquinas | Construction | Seed. GrupoTusMaquinas, a portal that connects equipment and machinery with construction sites in Latin America, closed a USD$1.2 million round to reach Mexico.
Instituto Clima e Sociedade | Philantropic. Instituto Clima e Sociedade is a Brazilian philanthropic organization that mobilizes resources and changes in the subject of climate change that raised USD$6 million from Bezos Earth Fund.
BNDES | Bank | Debt. The Brazilian Development Bank (BNDES)
BNDES is the main financing agent for development in Brazil and obtained USD$750 million in debt from the BID bank.