A resurgence in growth equity

#074: A SPAC-quisition goes official — but did the stock price rally?

Olá technopolists,

Event season is fully underway, whether you attended Finnosummit in CDMX or Vamos Latam in São Paulo. Saludos to all our Technopoly friends at all of these events.

If the back-to-school ambience of large-scale events hasn’t gotten your mojo flowing, then perhaps the trickle of IPOs has… even if it’s not always smooth sailing on the choppy seas of public markets (more below).

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What’s Hot

🌱 Growth equity’s resurgence. With IPO markets thawing (despite some mixed results), growth equity is gaining traction. In recent weeks, Bicycle Capital made its debut investment from an inaugural $500mn fund while JOKR/Daki closed a $50mn Series D. Three new $30mn+ growth rounds were also announced this week from Albo, the Mexican fintech; Gringo, the Brazilian car superapp for gig drivers; and Lumu Technologies, the Colombian cybersecurity platform. All the commotion even has General Atlantic restructuring itself, with LatAm head Martin Escobari taking over as global head of growth equity. (TechCrunch, Bloomberg Linea)

💱 Nubank enters ETFs. The Brazilian neobank is getting its feet wet in the investment market with the launch of two new dividend-focused ETFs. Launched last Thursday in partnership with Brazil’s B3 stock exchange, the new ETFs (Ibov Smart Dividendos and Nu Renda Ibov Smart Dividendos) are index-based funds available to Nubank customers as well as institutional and retail investors. The two equity ETFs are just the start of a new wave of investment products, and Nu Asset Management’s director, Andres Kikuchi, hasn’t ruled out fixed-income and hybrid products in the future. (Bloomberg Linea)

💳 Brazil’s credit card caps. Brazil’s senate passed new legislation capping credit card interest rates at 100% annually as the country’s private debt burden swells to record highs. Average interest rates on revolving credit cards shot to an average of 455% — their highest levels since 2017 — while total household debt in the country reached approximately half of disposable income. Is this actually Hot? Depends on your perspective: after the passing vote, Brazil’s bank lobby group, Febraban, warned legislators that the new laws may reduce the availability of credit cards by rendering many credit cards economically unviable for lenders. (Bloomberg Linea)

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What’s Not

📉 Nvini’s SPAC listing. The trail of muted public listings continued this week with SaaS company Nvini (formerly Nuvini), which became one of LatAm’s few SPAC exits. Last Friday, the company announced the deal, causing shares in parent company Mercato Partners to spike to $11.73; yet on Monday, shares in the newly merged entity plummeted -45% to close the first day of trading at $6.35. Nuvini aimed to raise approximately $60mn from the SPAC listing, which was originally announced in January this year. (Startupi, Startups Brasil)

🤫 Crypto secrecy in Brazil. Brazil’s public inquiry into crypto malfeasance reached a new crescendo this week, as its investigative body announced it will break bank secrecy rules in order to gather data from crypto exchanges regarding their customers’ money flows. This latest measure — first levied against Binance as part of its ongoing fraud probe — is now extended to a swath of mainstream crypto exchanges that includes Mercado Bitcoin, Bitso, Foxbit, Ripio, and more. The CPI investigative body has been cracking down on crypto exchanges for their alleged involvement in supporting pyramid schemes and circumventing Brazilian laws. (Brazil Crypto Report)

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Stat of the Week

Most conversations about financial inclusion focus on the end user, asking questions like: How can we increase the number of people with a bank account? 

It’s important, but it’s only one side of the equation.

In the wild world of digital payments, it takes two to tango: inclusion amongst shoppers is key, but merchants need to accept your payment type to make everything work. Anyone with an Amex card will know this pain acutely.

When we think about PIX as the case of financial inclusion par excellence, we often cite figures like its 80% penetration amongst Brazilian adults. But what about the other side of the transaction: merchants? Well, it’s finally won the race there too.