Venture Capital Investment and Startups through Nearshoring in Latin America
A profile on VC investors ALLVP. Nearshoring in Latin America. Platzi pursues the next technological revolution with AI. Elon Musk's new biography.
Welcome to our weekly newsletter covering the latest news and trends in the Latin American startup scene.
ALLVP: Catalysts for Innovation and Entrepreneurship in Latin America
ALLVP is a venture capital firm founded in 2012 by Federico Antoni and Fernando Lelo de Larrea. They aim to finance entrepreneurs using technology to address pressing problems in Latin America.
Their investments include Carrot, the first carsharing platform in Mexico City, and Cornershop, which was sold to Uber for $3 billion. ALLVP has become one of the most influential VC firms in the region, managing four institutional funds with over $350 million in assets.
They focus on early-stage companies with significant growth potential in sectors such as fintech, climatech, smart cities, and human capital. ALLVP is currently raising $150 million for their fourth fund and has already invested in Sensai and Shinkansen.
Vía Contxto
Nearshoring in Latin America: a new horizon for venture capital investment and startups
The United States is seeking to reduce its dependency on China and other distant countries by shifting towards nearshoring, which involves relocating business operations to nearby countries. Latin America has become an attractive option for nearshoring, leading to increased foreign investment, including venture capital, in countries like Mexico.
However, startups in the logistics and transportation industry in Latin America received less capital in 2022 compared to the previous year. Nevertheless, the trend is changing, and more investors are now betting on tech startups in the region.
Nearshoring in Latin America offers advantages such as cost savings, a wide range of qualified professionals, time zone convenience, ease of communication, and a solid business environment. The region's stable economies and favorable policies make it an attractive destination for foreign investment and long-term growth.
Vía Contxto
Quick News
Konfío Shuts Down Gestionix to Strengthen Focus on Financial Services for SMEs
Mexican fintech firm Konfío has announced the closure of Gestionix, an ERP software company it acquired in 2020, in order to focus on its financial services for SMEs.
M&A history. Konfío has previously made acquisitions to strengthen its market position, including Astro and Sr.Pago. Contalink is emerging as an alternative for independent accountants and SMEs in the changing fintech landscape.
Valuation. Konfío is valued at USD$1.3 billion, and is one of the largest fintech firms in Latin America. (Contxto)
Stori will now offer savings and investment products
Mexican startup Stori has acquired financial society MasCaja, expanding its offerings to include savings and investment products.
Objectives. With over 2.2 million customers and a valuation of USD$1.2 billion, Stori aims to provide credit card access to 80 million Mexicans.
The acquisition. Acquiring MasCaja is just the beginning for Stori, as the company plans to further expand its range of products and services and leverage its expertise in serving an underserved market. (Contxto)
‘Más efectivo sin efectivo’: A Galileo project to boost cashlessness
Galileo Financial Technology has launched a new platform called 'Más efectivo sin efectivo' to promote the use of electronic means over physical money in Latin America.
Value proposition. The platform aims to educate people about the costs of using cash and the benefits of digital transactions. It also aims to increase trust in cashless transactions and promote financial inclusion. (Contxto)
Platzi pursues the next technological revolution with AI as a flagship
Platzi, the largest tech school in the Spanish-speaking world, is focused on transforming Latin America into a technological powerhouse by offering a wide range of courses in technology-related subjects.
Value proposition. Platzi aims to prepare people for the AI revolution and has already started rolling out AI courses covering machine learning, natural language processing, and data science. (Contxto)
Briq.mx and Bramah Desarrollos sign the first 100% Digital Administration Trust
Real estate in Mexico is undergoing a transformation with the first 100% digital and remote trust management.
The trust. The trust was created for the funding and operation of the Sanâh Tulum boutique hotel, with over MX $33 million raised from 1,232 investors. This achievement opens up possibilities for investment in the Proptech-Tourism market with a secure legal structure.
Highlights. The collaboration between briq.mx and Bramah Desarrollos made this possible, with technological support from Weetrust and Banco Covalto. The digitization of the legal process saves time and costs by eliminating the need for physical presence. (Contxto)
Paymentology and Nelo partner to facilitate in-person payments in Mexico
Paymentology, a global leader in card issuance and payment processing, has announced a strategic partnership with Nelo, a consumer payment platform in Mexico.
The partnership and why it’s important. The collaboration will support Nelo's Mastercard for in-person payments through Google Wallet and the launch of physical cards. The partnership will provide Nelo with a fast and scalable infrastructure solution, enabling them to extend their reach and improve financial inclusion in Mexico. (Contxto)
Data snapshot: 5 years of agrifoodtech investment in Latin America
A new report from AgFunder reveals that agrifoodtech startups in Latin America have raised over $7.3 billion since 2018, accounting for 5% of the global market. The number of funding rounds in the region has consistently increased over the past five years, reaching 176 deals in 2022.
Highlights. The top-funded areas in Latin America's agrifoodtech investment were eGrocery and Cloud Retail Infrastructure, which raised 22% of the overall funding.
Top industries and companies. Food delivery and eGrocery startups have dominated the top funding rounds in the region, with companies like Rappi and iFood securing significant investments. (AFN)
8 Latin American VCs share why they’re brimming with optimism about the region’s startups
Latin American startups are focusing on sectors beyond fintech, such as healthcare, logistics, communications, and agriculture, to drive substantial disruption in the region.
Value proposition. Latin America's startup scene is not just limited to fintech, with other sectors like healthcare, logistics, communications, and agriculture poised for disruption. Education is also an area where technology can play a key role in closing the skills gap.
The opportunity for VC’s. Despite inflationary pressures, venture capital investment and fundraising in the region are expected to benefit from potential slowing inflation.
Surviving the lack of funding. Startups are employing various strategies like reducing headcount and negotiating lower prices to cut costs and reduce burn. (TechCrunch)
Startups funding extending beyond traditional LatAm tech hubs
The share of new venture capital-backed startups headquartered outside of Latin America's traditional tech hubs has grown in the first half of 2023, reaching 39%.
Brazil leading the funding. Emerging tech hubs include cities such as Rio de Janeiro, Lima, and Monterrey. In Brazil, startups raised USD$327 million in August, the best month for fundraising so far this year, with fintechs receiving the most capital. (bnamericas)
Spain's First Vice President, Nadia Calviño, highlighted the importance of strengthening relations between the European Union and Latin America during an event in Madrid.
The event. The event, organized by CAF-Development Bank of Latin America and the Caribbean, focused on common challenges in areas such as green energy, digital transformation, and human development.
The opportunity in LaTam. The region of Latin America has a lot to contribute, particularly in the energy transition, and aims to move beyond being a mere supplier of raw materials. The region is vulnerable to climate change and faces challenges in accessing financing for climate change projects. (El País)
Finds
tools, websites, and accessories
Zapier. Zapier is an automation tool that can save you time by connecting different apps and services to create a smarter workflow. With Zapier, you can automate tasks such as sending custom tweets, sharing new content on different platforms, and receiving alerts for important emails.
AdCreative.ai. AdCreative.ai provides unlimited generations of creatives, access to free stock images, AI-powered text generation, creative insights, and the option to collaborate with multiple users.
SaneBox. SaneBox is an email management tool that uses AI to identify important emails and organize the rest. It also offers features like deep cleaning old emails, organizing emails, blocking annoying senders, grouping newsletters, and creating custom folders.
Food for Thought
The author of the article attempts to estimate the value of Rappi, a Latin American delivery app, using the Price to Sales multiples of Instacart and DoorDash. Based on their calculations and assumptions, they estimate Rappi's value to be around USD$3.7 billion, which is lower than its private valuation but higher than the capital it has raised.
The assumptions made in this valuation, such as the 50/50 split between restaurants and supermarkets, may oversimplify the complexity of Rappi's business and the potential revenue from other lines of income.(LinkedIn)
Nine wild details from the new Elon Musk biography
The article discusses key details from the recently released biography of Elon Musk written by Walter Isaacson.
It highlights several interesting aspects, including Musk's attempt to get a discount on the Twitter deal, Jack Dorsey almost backing out of investing in Twitter 2.0, Musk's desire to ban activists after buying the company, his anticipation of Twitter Blue's disastrous rollout, his awareness of the need to be cautious about China, his strained relationship with Sergey Brin, his refusal to work with Bill Gates due to a short position on Tesla, Hollywood agent Ari Emanuel's proposal to run Twitter for $100 million, and Musk's favorite mobile game, The Battle of Polytopia. (The Verge)
Here’s how we raised a Series B for our AI startup during a downturn
Raising a Series B funding round for AI startups has become more challenging as the market becomes saturated with companies claiming to be in the AI space.
To stand out, founders need to convey the measurable impact of AI on their product offerings and demonstrate how they differentiate themselves from major players like OpenAI. Additionally, establishing credibility with investors is crucial in a market flooded with AI startups. (TechCrunch)
Worthy Recommendations
The Coming Wave: Technology, Power, and the Twenty-First Century’s Greatest Dilemma, recommended by Reid Hoffman, Cofounder, LinkedIn; partner, Greylock
The Coming Wave: Technology, Power, and the Twenty-first Century's Greatest Dilemma. “Mustafa is the rare entrepreneur who has founded not one but two major AI companies, and I’m so thrilled that he’s sharing his deep thinking with us all, rooted in his desire to uplift and improve humanity.”, Hoffman says.
Jobs
Partner Engagement Manager at Netflix (Mexico City, remote)
Tech Product Manager at Truora (Colombia, remote)
Global Talen Coordinator at Netflix (Mexico City, remote)
Senior Product Marketing Manager at unico (Mexico City, not specified)
Capital Collections Specialist at Stripe (Mexico City, not specified)
Deals
These startups and companies received capital this week:
Kunzapp | SaaS | Not specified. Mexican and Chilean startup Kunzapp has raised USD$750,000 in a funding round led by Platanus Ventures. The company was founded to address the lack of practical solutions for managing multiple software subscriptions in Latin American companies.
EZVolt | EV | Venture. Brazilian startup EZvolt, which provides electric vehicle charging services, has raised USD$2 million in funding from Vibra Venture. Mexico is currently the largest market for battery electric and plug-in hybrid vehicle sales in Latin America, presenting significant growth opportunities for EZvolt.
Syscap | Fintech | Funding. Mexican fintech startup Syscap has raised USD$2.3million in an initial funding round to expand its private credit infrastructure. The platform allows non-bank lenders to efficiently manage and access private credit lines, offering a centralized point for communication, monitoring, and reporting.
123Lease | Rental | Venture. Mexican car leasing startup 123 Lease has secured USD$30 million in financing from Emso Private Credit Fund. The company offers a leasing service where customers can rent vehicles for their business activities without the option to purchase the asset at the end of the contract.
iRancho | Agrotech | Seed. Brazilian bank Banco do Brasil has invested USD$1.4 million in agtech firm iRancho through its corporate venture capital fund, BB Ventures. iRancho focuses on improving farm productivity and profitability through user-friendly technological solutions.
Rocketfy | Analytics | Debt Financing. Colombian e-commerce platform Rocketfy has raised USD$7 million in debt funding from Aluna Partners to enhance its technology and develop new logistics and payment solutions. Rocketfy connects entrepreneurs across Latin America to the e-commerce ecosystem, offering personalized online stores and managing shipping through partnerships. The company has integrated artificial intelligence to optimize processes.
Mentatech | Ticketing | Pre seed. Argentinian startup menta tech raised an undisclosed amount from 17Sigma. The startup offers advanced infrastructure solutions tailored to optimize ticket inventory.
KairosAI | Big Data | Angel. Colombian startup KairosAI raised USD$15,000 from GT Family. The startup uses artificial intelligence to help businesses optimize and automate their operations. By integrating AI, companies can maximize efficiency, reduce costs, and minimize errors.
Databits | Edtech | Pre-Seed. Databits, an Edtech startup in Latin America, has raised $600,000 in a pre-seed round to expand its presence in Mexico. The funds, from institutional funds and family offices in Mexico, the United States, Brazil, Ecuador, and Peru, will be used to develop more courses and programs on data science and AI.
Kolors/Urbvan | Transportation | M&A. Mexico City-based startup Kolors is acquiring B2B van pooling provider Urbvan for USD$12 million in cash. Kolors, which connects intercity bus riders with bus drivers, aims to offer a door-to-door solution with the addition of Urbvan's services. The acquisition will allow Kolors to connect business travelers within cities to corporate offices, business parks, factories, and distribution centers.