INSUBCONTINENT EXCLUSIVE:
Sophia Wood is a principal at Magma Partners, a Latin America-focused seed-stage VC firm with offices in Latin America, Asia and the U.S
Sophia is also the co-founder of LatAm List, an English-language Latin American tech news source. More posts by this contributorBrazil
continued to churn out unicorns this month, with Curitiba-based Ebanx becoming the first startup from the southern part of the country to
top a $1 billion valuation
U.S.-based FTV Capital provided the investment but did not disclose the amount invested nor the exact valuation of Ebanx after the
investment.Ebanx is an end-to-end payment processor that helps international companies receive payments in the Latin American market,
Their clients include Airbnb, AliExpress, Pipedrive, Spotify, Uber and Wish, and more than 50 million Latin Americans have conducted
transactions with more than 1,000 companies through the Ebanx platform
This investment comes on the heels of exciting partnerships with Uber Pay, Shopify, Spotify and Visa to expand cross-border payment
processing across the region.Ebanx has operations in Brazil, Mexico, Argentina, Colombia, Chile, Peru, Ecuador and Bolivia, and will expand
their local payment solution, Ebanx Pay, into Colombia in 2020
The company has grown its user base by offering a full-service product that includes market research, 24/7 customer service and anti-fraud
technology.The Ebanx investment is part of a growing interest in Latin American payments startups
Brazil’s PagSeguro and StoneCo had successful IPOs last year, while Mexico’s Conekta and Ecuador’s Kushki have raised large rounds to
try to unite the region under a single processor as Latin America rapidly adopts e-commerce.Uber acquires Cornershop, takes off where
Walmart left offThe acquisition of the Chilean-Mexican grocery delivery startup Cornershop has been an emotional roller coaster for Latin
American entrepreneurs and investors throughout 2019
First Walmart announced a $225 million deal that would be one of the bigger exits of the region, then the acquisition was blocked by Mexican
antitrust institution COFECE
This announcement dealt a blow to the ecosystem as entrepreneurs and VCs had eagerly awaited this boost in liquidity in the local
market.
Last-mile delivery and logistics became a very competitive space in Latin America in 2018. Then in mid-October 2019, Uber
announced it would take a 51% stake in Cornershop for a reported $450 million, quadrupling the startup’s value in the four months since
This deal will consist of cash, investment in Cornershop’s growth and stock in Uber, which IPO’d earlier this year.However, this deal
must also be approved by the Chilean and Mexican antitrust boards, which are expected to release their decisions within the next two weeks
In the meantime, Cornershop will continue its expansion into the Colombian market after it added Peru and Canada in 2019.Last-mile delivery
and logistics became a very competitive space in Latin America in 2018, and many of the players are sitting on enormous pools of capital
Colombia’s Rappi raised $1 billion from SoftBank in early 2019, breaking records for startup investment for the region
Brazil’s iFood raised $500 million from Naspers at the end of 2018
However, delivery continues to be a cash-intensive business, with many of these companies burning through capital quickly to gain market
Cornershop was an exception and had raised less than $50 million before the acquisition.Brazil’s Buser, Olist, raise funding from
SoftBankDespite the WeWork crash, SoftBank has continued investing consistently in Brazilian startups
In early October 2019, the Japanese investor led an undisclosed Series B round for Brazilian collaborative bus chartering startup Buser
Buser’s team will invest more than $73 million in growth over the next 12 months to create new alliances for their network of operating
partners.Buser helps coordinate groups of people to charter buses at convenient times and lower prices, disrupting the bureaucratic,
anti-competitive and inefficient bus system
The company has grown 1,500% over the past nine months and serves more than 3,000 people per day
While Buser has been popular with locals, traditional bus drivers are calling for regulation to slow the company’s meteoric growth
Buser plans to add more than 100 direct jobs in 200 cities over the next 12 months, and SoftBank’s most recent investment will help power
this growth.Brazil’s e-commerce marketplace integrator Olist also received investment from SoftBank for its Series C, coming in around
Redpoint eVentures and Valor Capital also participated in the round.
This investment signals the increased interest by traditional
retailers in startups that are slowly chipping away at their market share across the region. Olist connects small businesses to larger
product marketplaces to help entrepreneurs sell their products to a larger customer base
They will reportedly use this investment to investigate the development of financial products and look for collaboration with SoftBank’s
other companies, like Rappi and Loggi
Based in Curitiba, Olist was founded in 2015 to help small merchants gain market share across the country through a SaaS licensing model to
small brick and mortar businesses.Today, Olist has more than 7,000 customers and uses a drop-shipping model to send products directly from
stores to clients around the country, allowing them to grow with a capital-light model
They will use the investment to add up to 100 new employees.Carrefour Brazil acquires 49% of EwallyGrocery chain Carrefour acquired a large
stake in Brazil-based Ewally after it completed Village Capital’s first regional acceleration program.Ewally improves financial inclusion
in Brazil through a mobile wallet app that allows unbanked clients to pay bills and make purchases online through the blockchain
Carrefour will reportedly use the acquisition to accelerate digital transformation and improve online payment mechanisms throughout
Brazil.Carrefour did not disclose the amount invested and the deal is still subject to approval by Brazilian financial regulation
However, this investment signals the increased interest by traditional retailers in startups that are slowly chipping away at their market
share across the region.News and Notes: Early-stage rounds are getting biggerStartups in Brazil, Colombia and Argentina raised several
rounds this month, ranging from $1.5 million to $13 million
Brazil’s Xerpa, Colombia’s Sempli, Brazil’s Gorilla and Argentina’s Bitso and Worcket were among those that raised capital from
local and international investors in October 2019.Brazilian human resource management platform Xerpa raised $13 million from Vostok
Emerging Finance to continue to help companies like MercadoLibre, iFood and QuintoAndar provide benefits for their employees
Previous investors include Nubank’s David Velez, Kaszek Ventures and QED Investors.Sempli, an online lending platform for small businesses
in Colombia, raised an $8 million Series A from new investors Oikocredit and Incofin CVSO, as well as previous investors BID LAB, XTPI
Fund, Generación Exponencial, and Impulsum Ventures
To date, Sempli has raised more than $24 million in equity funding
The founders will use this round to grow their portfolio and improve their risk assessment technology to provide more small business loans
in Colombia.Brazil’s Quicko, an alternative mobility startup that uses big data, raised $10 million in October from Brazilian transport
Quicko’s technology integrates all mobility options — from bicycles to Uber and 99 — to help people get where they need to go as
quickly and inexpensively as possible.Also in Brazil, startup Gorilla Invest raised $8.4 million from Ribbit Capital, Monashees and
Gorilla aggregates financial assets so that investors can review all their commitments in one place, and currently manages more than $1.2
billion for 40,000 clients.Mexican cryptocurrency exchange Bitso raised an undisclosed round from Argentine startup Ripple to expand into
the Southern Cone, especially Argentina and Brazil
Other investors in the round included Pantera Capital, Digital Currency Group, Jump Capital and Coinbase.Looking ahead to November, with
unsettled politics in several countries across the region, tech startups are growing despite governmental changes
Some of these changes will likely have a positive effect on the regional ecosystem as people push for more sustainable and equal economic
growth.What to watch next? Last year, Q4 was marked by a wave of large investments as funds and startups look to end the year strong
IFood raised its record-breaking $500 million round in December 2018
We may well see a similar uptick this year as mega-funds like SoftBank have been consistently investing multi-million dollar rounds since
There is no sign international investment in Latin America will slow through the end of the year, so we can likely look forward to several
more growth-stage rounds before the year is out.
