Week 23, 2023 - Find The Way Newsletter

“We are all one. Only egos, beliefs, and fears separate us.” - Nikola Tesla

MARKETS

June 9, End Of Day

• Argentina S&P MERVAL Index = 381,763.86 (YTD = 88.91%)
• Brazil BOVESPA Index = 117,019.48 (YTD = 6.64%)
• Chile S&P IPSA Chile = 3,216.20 (YTD = 1.38%)
• Colombia MSCI COLCAP = 1,183.97 (YTD = -7.94%)
• Mexico IPC Mexico BMV = 54,512.14 (YTD = 12.48%)
• Peru S&P/BVL Peru = 22,237.14 (YTD = 4.25%)

TECH

Fundraising picks of the week

illow makes your website compliant in less than 5 minutes. They enable companies to use users’ data. Their SaaS gets/stores users’ consent and their API helps companies to automate data deletion once users request it. Only non-European Union startup that won a Privacy Grant from the EU.

Worknmates is a marketplace for remote companies and employees → Work from anywhere. In Worknmates, companies set up a maximum budget for employees. What can employees do with this budget?

1. They can book a space by hour, day or longer in 2,500 coworking spaces in 25 countries.
2. Those staying at home can purchase products (headsets, monitors, coffee capsules, etc.) from the home office supply store.
3. They can include their food in their experience with integrations with Rappi, Uber Eats, PedidosYa, and Ifood.

Dive deeper into other fundraising firms in LatAm here.

Other tech news

Uruguayan-based company Nocnoc has raised $14 million in Series A funding, led by PayPal Ventures, to facilitate cross-border e-commerce between Latin American merchants and global sellers. Nocnoc's platform allows online merchants to upload their product catalog and sell on various marketplaces, managing product listings, marketing campaigns, communication with consumers, and logistics, while also offering faster payment processing and expanding its services across Latin America.

S?o Paulo-based venture capital firm Positive Ventures has secured $25 million for its impact fund, tripling its previous fund and bringing its assets under management to $1 billion. The firm focuses on investing in Latin American founders building tech-driven solutions in areas such as climate change, education, healthcare, and financial services for underserved communities, with plans to invest in 20-25 companies at the pre-seed and seed stages.

CURRENT AFFAIRS

Brazil: Consumer prices in Brazil decelerated in May, with 12-month inflation reaching its lowest level in over two years and falling below 4%. The data supports calls from President Luiz Inacio Lula da Silva's government and business community to lower the country's high-interest rates, with Credit Suisse economists revising their inflation forecast and predicting a rate cut in sight.

Chile: The new Constitutional Council, dominated by conservative parties, has started the process of drafting a new constitution, replacing the existing one from the Pinochet dictatorship era. The council, elected in May, marks a significant shift from the previous left-wing assembly, and the completed draft will be put to a national vote in December after a shorter and more limited process.

Mexico: Toyota will invest an additional $328 million in its plant in Guanajuato, Mexico, to adapt production for a new hybrid model of its Tacoma pickup truck, aligning with its electrification strategy. The investment aims to meet the growing demand for electric-powered vehicles in the North American market, as carmakers worldwide shift away from internal-combustion engines to comply with stricter emissions regulations.

Honduras: President Xiomara Castro is set to visit China as the country seeks to strengthen its ties with Beijing, aiming to boost its economy. The trip highlights China's growing influence in Central America, where countries like Honduras are looking to balance relations with the United States and pursue closer economic engagement with China, a shift that has raised concerns from the US.

FURTHER READING

McKinsey engaged with the very heart of LATAM's tech landscape. They surveyed 200 top startups, conducted in-depth interviews with 30 market leaders, and gathered invaluable input from over 300 startup employees and STEM students. By exploring eight countries and more than 15 different industries, this report offers a panoramic view of the thriving tech scene across the region.

LATAM has experienced an exhilarating journey in recent years, witnessing its first significant venture capital boom. Notably, the number of unicorns—the elusive startups valued at $1 billion or more—soared to an impressive 34 in 2021, a remarkable leap from merely 9 in 2018. Accelerating the startup development cycle, an abundance of capital has surged into the region, sparking a transformative shift in mindsets. A staggering 87% of newly minted tech graduates now aspire to work for a startup, while 83% dream of venturing into the entrepreneurial realm themselves. Read the report HERE.

Some of the key findings from the report:

1. Capital Influx: Despite a slight drop between 2020 and 2022, the volume of capital invested in LATAM remains an impressive 63% above pre-pandemic levels. Notably, this influx is predominantly directed toward early-stage startups, highlighting the untapped potential for further growth.
2. Runway Challenges: Close to one-third of startups in LATAM possess less than 18 months of runway, underscoring the pressing need for sustained financial support and strategic guidance.
3. Capital Shortage: The report reveals a staggering annual capital shortage of over USD 2 billion for series B+ startups in LATAM. Addressing this gap holds immense potential for unlocking further growth and innovation.
4. Changing Investor Landscape: The top 10 investors active in LATAM, responsible for 40% of the deals in 2021, witnessed a notable shift in 2022, accounting for only 24% of the total investments. This evolving landscape hints at exciting new players entering the scene and potential opportunities for both startups and investors.
5. Mergers and Acquisitions: Brace yourself for a potential wave of mergers and acquisitions in the LATAM tech space, signaling a dynamic period of consolidation and strategic collaborations.