Gig work: winners, losers, and big bets
#072: Bicycle Capital makes its debut investment.
Olá technopolists,
Gig work is the watchword. Colombia’s leftist government has reached an agreement to increase gig driver protections, while a state court in Brazil is cracking down hard on old labour grievances with Uber. But that isn’t stopping Bicycle Capital from announcing a big bet on the future of motorbike rentals for delivery riders.
A mandatory word on IPO markets: yes, the success of Arm’s listing last week was a huge boon for other IPO hopefuls. But it’s too early for SoftBank and Arm[chair] optimists to declare outright victory; Arm’s share price slide early this week is making the early results look a little more earthly.
What’s Hot
🛡️ Colombian gig worker protections. Colombia’s government reached a landmark agreement with a consortium of delivery startups, including DiDi and Rappi, guaranteeing social security protections for 120,000 gig delivery workers in the country. Under the agreement, gig workers will remain independent contractors while employers will be responsible for paying up to 60% of workers’ social security allowances. The agreement comes as part of President Petro’s labour reforms and will include other guarantees, such as a maximum 8-hour working day and worker protection from unjust termination. (Bloomberg Linea)
💰 Bicycle’s first investment. Bicycle Capital, the LatAm-focused growth VC firm recently launched by ex-SoftBankers Marcelo Claure and Shu Nyatta, made its first investment last week as it led a $50mn Series C investment in Mottu, a Brazilian motorbike rental platform. Bicycle’s investment was a $25mn cheque out of its inaugural fund, which has $440mn committed from Claure’s family office and Mubadala investments out of a $500mn target close. Mottu is riding the food delivery wave with its rental platform and attracted QED as investors in its latest round. And there’s even some poetic justice, too: Bicycle’s first investment is in… bikes. More in the Stat. (FT, Bloomberg)
⛓️ Drex’s pilot. Brazil’s central bank announced that Drex, its central bank digital currency (CBDC), completed 500 successful transactions in the first 50 days of its pilot programme amongst 11 entities in its pilot consortium. Last week, the network executed 2 transactions for tokenised federal bonds for the first time. While the main use cases for Drex are still unclear, the pilot programme continues to be one of the latest stage CBDC programmes around the world — despite Brazil’s recent slippage from 7th to 9th in Chainalysis’ global adoption rankings. More in The Rundown. (Brazil Crypto Report)
What’s Not
🛑 Uber Brazil’s labour woes. A labour court in the state of São Paulo levied hefty penalties against Uber last week based on a 2021 lawsuit alleging irregular working relations with its drivers. The court ordered the mobility platform to pay a fine of $205mn ($1bn reais) in addition to hiring all its drivers as employees; the court has given Uber 6 months to implement the penalties, or it faces a daily penalty of $2k ($10k reais) for non-compliance. Uber stated it will appeal the decision and will not adopt any measures until all applicable appeal channels have been exhausted – and, moreover, that it’s being unfairly targeted as the only mobility platform involved in the suit. (Reuters, Startupi)
👋🏽 Konfio shutters its ERP. The Mexican fintech unicorn announced that it will close all operations for Gestionix, an ERP software it acquired in 2020. Konfio said the decision was a result of ‘focusing on its financial and payments solutions for SMEs’ — which seems to be an implicit admission that the ERP proposition wasn’t a strategic fit with its lending and payments products. Customers will have until October 30th to migrate to other competitors; Contalink has been identified as a safe home for stranded customers. (Contxto, Fintech Expert)
Stat of the Week
Bicycle’s bet on motorbike rentals is based on long-term optimism for gig work; Mottu’s entire proposition is a picks-and-shovels infrastructure play that benefits from industry-wide growth, regardless of whether iFood, Rappi, or someone else is top dog in the platform wars.
This week, we’re looking at growth in the number of gig drivers to see what’s underneath Bicycle’s bullishness.