Editor's Note

LAVCA has tracked an uptick in startup M&A transactions since the year started, notably:

• Celcoin acquired Finansystech
• Mendel acquired Te Facturo
• Pravaler acquired Workalove
• PicPay acquired BX Blue
• Inretail acquired JOKR’s Peruvian operation
• CRM&Bonus acquired Giver
• Infracommerce acquired Ecomsur
• PedidosYa acquired Hugo

M&A activity doesn’t seem to be slowing down, with an additional four new startup M&As in this issue, a stark contrast to founder lack of appetite for inorganic growth in 2022, per LAVCA’s Startup Founders Survey. 

Despite a significant downturn in VC investment compared to 2021, VC remained the second largest asset class in Latin America in 2022 as a proportion of total private capital invested.

Our annual Trends in Tech report breaks down 2022 VC investment data, top deals, highlighted transactions and most active investors, as well as round size analysis and country-specific trends. 

Notable analysis in this year’s report includes:

• The rise of venture debt investing and opportunities for structured financing
• Analysis on investment activity by investment stage
• The emergence of cleantech and biotech

LAVCA Members can log in and download an accompanying LAVCA Data Pack with fundraising and disclosed closings; exits; all disclosed transactions, sortable by stage, sector and HQ; stage analysis for the major markets, round size analysis and sector breakouts with year-over-year sector growth.

Startup M&A ​​

▸ SPAC |  nuvini, a Brazilian B2B software aggregator, will list on the NASDAQ through its merger with Mercato Partners Acquisition, a SPAC listed by US-based private equity firm Mercato Partners in 2021.

▸ HRTECH | Flash, a Brazilian on-demand corporate benefits provider for executives, acquired FolhaCerta, a Brazilian employee time-management platform. 

• Battery Ventures and Whale Rock led a USD100m round for Flash in March 2022.

▸ HRTECH | Gupy, a Brazilian recruiting platform, acquired Pulses, a Brazilian employee engagement platform.

• Gupy raised a ~USD93m round led by Riverwood Capital and SoftBank in February 2022 in what was the largest known investment in an HRtech startup in Latin America at the time.
• Invisto invested ~USD600k in Pulses in October 2021. 

▸ AGTECH | Seedz, a Brazilian loyalty platform for rural producers, acquired Gaivota, a Brazilian agriculture input and sales management platform.

• Alexia Ventures led a USD16.5m round for Seedz in December 2020 and invested in Gaivota previously. 

▸ HRTECH | minu, a Mexican employee wellness platform, acquired Plerk, a Mexican employee benefits platform, to expand its offering to payroll advances and grocery vouchers. 

• minu just raised a USD10m bridge round from Coppel Capital, Besant Capital and Enea Capital. Plerk raised a USD12m Series A led by Upload Ventures in September 2022.

Deals

▸ HRTECH | Rankmi, a Chilean employee recruitment and performance management platform, raised an undisclosed Series A led by SoftBank Latin America and merged with Osmos, a Mexican payroll provider. 

▸ DEBT | Mexican lending platform Konfío secured a ~USD28m credit line extension from Goldman Sachs and Gramercy. 

• Konfio secured a USD10m debt facility from Citibanamex, DFC and Ford Foundation in March 2022 and a USD80m credit line from Community Investment Management in December 2021.

▸ DEBT | Mattilda, a Mexican finance management and tuition collection platform for private schools, secured a credit line of up to USD10m from Addem Capital. 

• Mattilda raised a USD10m seed round led by FinTech Collective in November 2022.

▸ Marco Financial, a Miami-based lending platform for Latin American SMEs conducting international trade, raised a USD8m round led by Arcadia Funds. 

• DEBT | MidCap Financial Investment and Castlelake also provided USD200m in a credit facility. 
• Marco Financial raised a USD7m seed round in July 2021 alongside a USD75m credit facility. 

▸ CROSSBORDER | Chinese investor CY Capital invested ~USD8m in aMORA, a Brazilian rent-to-own residential real estate platform.

• GFC led a ~USD3.2m round in April 2022.
• This is CY Capital’s first known investment in a Latin American startup.

▸ CVC | SRM Ventures, the CVC arm of Brazilian asset manager SRM, invested ~USD7m in Blipay, a Brazilian payroll advancement platform.

▸ Igah Ventures led a ~USD4m Series A for Dattos, a Brazilian billing and payment automation platform, with participation from Investtech, ABSeed Ventures and GR8 Ventures.

▸ Empirica Investimentos invested ~USD4m in ContaFuturo, a Brazilian debt refinancing platform for employees. 

▸ CVC | Bradesco invested ~USD2m in 4intelligence, a Brazilian predictive model developer for inventory management. 

• 2bCapital led a ~USD2m Series A in June 2021. 
• 4intelligence clients include Coca-Cola, Volvo and Hering.

▸ CVC |Grupo Leveros, a Brazilian air conditioner manufacturer, invested ~USD2m in Web.art Group, a Brazilian e-commerce and digital marketing platform. 

▸ HEALTHTECH | VivaWell, a Mexican health insurance provider, raised USD1.6m from undisclosed FOs.

▸ Big Bets led a ~USD1.4m round for Newtail, a Brazilian market intelligence platform for retailers, with participation from Verve Capital, Prodigio Capital and angel Alex Szapiro (SoftBank), and follow-on from Norte Ventures.

• Latitud led a USD250k round in 2021. 
• Newtail’s clients include Mondelez, Ambev, Heinz and Hortifruti.

▸ DEBT | Finsocial, a Colombian consumer lending platform for teachers and pensioners, secured ~USD210k in debt from undisclosed investors to expand its credit origination facility. 

• Finsocial secured USD20m in debt financing from Swiss impact fund Symbiotics in September 2020.

▸ IoT Kamay Ventures invested in Webee, an Argentine IoT manufacturer for agriculture producers. 

▸ Mexican VC Ananda Ventures invested in HAAB, a Mexican community-driven collaboration platform for creators.

Funds 

▸ 5G | TIM, a Brazilian internet service provider, made a USD50m commitment to anchor Upload Venture’s new growth fund with a USD250m target to invest in 5G infrastructure in Latin America.

▸ WOMEN-LED | EWA Capital (formerly Mountain Nazca Colombia) reached a USD10m first close for FCP EWA II, its second flagship fund with a USD25m target to invest in early stage startups in Spanish-speaking Latin America.

• EWA Capital was co-founded by Patricia Saenz.
• EWA Capital’s LPs include IFC, Bancoldex, Fundación WWB and Mountain Partners.
• EWA Capital’s portfolio includes Plurall, Sempli and TPaga.

▸ PROPTECH | Terracotta Ventures launched its second flagship fund with a ~USD60m target to invest in Brazilian proptech startups.

• Terracotta Ventures’ first fund includes CondoConta, InstaCasa, Approva Fácil, Rede Vistorias, Livance.

▸ Thadeu and Felipe Diz of Zee.Dog launched CamelFarm Capital, a VC fund with a ~USD14-20m target to invest in early stage Brazilian CPG startups.

• Petz, a Brazilian pet shop chain, acquired Zee.Dog for ~USD163m in 2021. 

▸ Brazilian investment bank Questum Investimentos launched a VC fund with a ~USD40m target to invest in seed and early stage startups.

• Questum Investimentos was founded by angel Rafael Assunção.
  
  Assunção to NeoFeed: “Vou fazer o funding da startup já pensando no caminho de saída…Eu não acredito em animais mitológicos.”

▸ HEALTHTECH | Bayer is the new partner of Cubo Health, a healthtech accelerator program launched by Cubo Network and Dasa in 2018 to support early-stage Brazilian startups developing consumer health solutions.

• 177+ healthtechs have made business connections with Dasa through the program so far, according to Startups. 

▸ Brazilian accelerator ACE Startups launched a boutique M&A practice to support founders outside of its portfolio with inorganic growth strategies.

• ACE’s portfolio includes VizioMed, Flapper, Eva, Deskfy, Leaf Agriculture, EasyQasa.

▸ Founders Fund cut the target of its current flagship fund by USD1b, following the downturn in dealmaking in 2022.

• The firm plans to roll over the difference into a future fund.
• Founders Fund investments in Latin America include Nubank, Kavak, Belvo, Mudafy, Inventa, Xerpa and Facily

▸ LAVCA publishes an annual directory of its VC/Tech members, with profiles on 75+ firms active in Latin America.

Startups 

▸ LAST MILE | Mexican grocery delivery platform Jüsto will leverage Rappi’s partners' distribution network in Brazil to deliver orders to end consumers.

▸ LAST MILE | iFood reduced its workforce by 6.3%, impacting 355 employees. 

• The restructuring comes six months after Prosus Ventures acquired a 33.3% stake in iFood from Just Eat for ~USD1.5b in cash with an additional USD300m earnout.

▸ Tribal Credit, a San Francisco-based B2B payment platform for emerging markets, is shutting down its operations in Brazil a year after SoftBank Latin America led its USD60m Series B. 

▸ PROPTECH | Brazilian proptech Loft announced its fourth restructuring in the past six months, reducing its workforce by an additional 340 employees after announcing a 12% reduction earlier this year. 

▸ Belvo, a Mexican fintech providing a financial services API for mobile applications, launched operations in Brazil.

• Citi Ventures made an undisclosed investment in Belvo in September 2022; Belvo raised a USD43m Series A in June 2021.

News 

▸ The Brazilian Central Bank approved the launch of WhatsApp’s merchant payment system. 

• WhatsApp users in Brazil have been able to make peer-to-peer payments since 2021, but the new development clears the way for merchants to receive payments.

▸ CRYPTO | Nubank launched Nucoin, a blockchain-based digital currency, as part of its new customer loyalty program. 

▸ EV | Tesla will build its next Gigafactory in Mexico, with capacity to manufacture up to 750k EVs per year.

• This is Tesla’s first factory in Latin America and its fifth globally after its operations in Austin and Fremont (US), Shanghai (China) and Berlin (Germany).

▸ CRYPTO | Brazilian retail conglomerate Magazine Luiza partnered with Mercado Bitcoin to enable crypto investing through its fintech arm MagaluPay. 

▸ TikTokers are setting up warehouse consultancies by teaching Latin American audiences to import products from Alibaba:

"Despite not being supported or even acknowledged by Alibaba, TikTok entrepreneurs are helping the Chinese e-commerce giant gain a foothold in countries like Peru and Bolivia, where it currently does not have a clear growth strategy."

People & Programs

▸ Nubank appointed David Marcus (formerly of PayPal and Meta) to its board of directors.

▸ Kamay Ventures is hosting Kamay Code Buenos Aires 2023 on 29-30 March, a program focused on connecting CVCs and startup founders in Argentina. Registration is now open.

▸ The third edition of the VC LatAm Summit will be hosted on 19-20 April in Miami in partnership with eMerge Americas.

• Organizing local associations include: ARCAP, ABVCAP, AMEXCAP, ACVC, ColCapital, ECUACAP, PARCAPY, PECAP and Uruguay XXI. 
• LAVCA Member GPs and LPs are welcome to register; organizers will offer a limited number of complimentary passes to qualified LPs.

▸ AMEXCAP will host Cumbre de Capital Privado 2023 in Mexico City on 28-29 March. Details here.

Global Tech

▸ SIGN UP for GPCA’s Global Tech Brief. Edited by LAVCA Senior Advisor Julie Ruvolo, this bi-weekly newsletter covers tech activity in Asia, Latin America, Africa, CEE and the Middle East. Recent issues covered breastmilk innovation and China’s growing EV investment. 

LAVCA is now part of GPCA, the Global Private Capital Association, and will continue to operate as a parallel membership organization with its own dedicated team and board.