#013: How large is LatAm’s gender gap?
M&A heats up, DeFi goes mainstream in Brazil, and Mexico welcomes its first female-founded unicorn
Hol@ technopolists,
As inflation soars and the correction sinks in, ongoing stories of layoffs and lower fundraises are continuing. But that’s not overshadowing the activity elsewhere, with M&A staying red-hot and a new unicorn coming to the block.
This week in data, we’re looking at the global gender gap and how LatAm stacks up.
What’s hot
🛍️ Shopping around. LatAm acquisition activity from January to May is up from last year per recent reports, and last week was especially hot. Local is buying local: Brazilian unicorn Hotmart acquired fellow Brazilian fintech eNotas to beef out their creator content platform. Global is coming local: global mobility provider Swvl purchased the Mexican shared transportation startup Urbvan for $82mn. And local is going global, too: Chilean insurtech unicorn Betterfly bought Spanish fintech Flexoh to expand into Europe. (Bloomberg Linea)
🏦 Brazilian tokenism. Itaú, Brazil’s largest private bank, has announced plans to create a tokenisation platform that turns mainstream financial instruments into blockchain-enabled tokens and allows users to store their own cryptocurrencies. Rather than going straight to retail consumers, Itaú will launch the platform for institutional investors first — unlike most crypto products. The bank’s spokespeople haven’t ruled out the possibility of allowing crypto trading through their platform. Itaú clearly wants to be a mainstream crypto leader; earlier this year, they were selected by the central bank to help launch a digital Brazilian real. The country’s first cryptocurrency regulation bill currently sits with the Senate and is expected to go through after October’s presidential elections. (CoinDesk)
💰 Something borrowed. Stori, the Mexico City-based fintech, became LatAm’s newest unicorn with a $150mn fundraise that landed a $1.2bn valuation. The company issues credit cards onlinethrough paperless, mobile-first process andthat targets the underserved and rural populations. Two things to know: first, co-founder Marlene Garayzar has become the first Mexican woman to found a unicorn in the country; second, the company managed to increase their valuation 25% since their last one in September ‘21 – notable while other late-stage companies are facing flat valuations and down rounds. Elsewhere in credit news: Mercado Libre, the Argentinian ecommerce giant, has secured a $233mn loan from Goldman Sachs to finance growth for its fintech arm, Mercado Pago, in Mexico and Brazil. The fintech plans to expand its credit offerings for individuals and small businesses fairly evenly across the two countries. The Argentinian ecommerce platform will be hoping to show promising growth to investors ahead of its Q2 earnings announcement, having missed earnings in Q4 ‘21 and Q1 ‘22 (despite turning a profit for the first time ever in Q1). Mercado Libre has shed 66% of its market cap since its peak at $100bn last September. (TechCrunch, Bloomberg)
What’s not
🔥 Mexican fire sales. Credito Real, Mexico’s second-largest non-bank lender, has been ordered to liquidate its assets by a Mexican commercial court. This seems to be the end of a tumultuous saga for the lender. Three weeks ago, Credito Real fought back against bondholders who tried triggering involuntary bankruptcy in the United States following a defaulted foreign debt payment. The company refused to do so, firing the advisors who supported filing for voluntary bankruptcy in the US — only to be whacked with the new sell order on home turf. (Bloomberg)
👩🏽💻 The culling continues. Facily, the Brazilian social commerce unicorn, has announced up to 100 new dismissals on top of the 260 employees (30%) already laid off in April. Alice, a Brazilian healthtech, has laid off 7% of its workforce (63 employees). Fintech is feeling the pain heavily, too: MovilePay in Brazil has let go of 16% of its team (40 employees), while the Mexican credit fintech Tribal is cutting 15% of its team. Daki, Jokr’s Brazilian subsidiary, has made 16 layoffs while fellow Brazilian startups Ame Digistal, Provu, and Goomer have also made layoffs. Most cuts are concentrated in sales and operations as leaders downgrade their growth ambitions to fit the market. (Bloomberg Linea)
Stat of the week
In light of Stori founder Marlene Garayzar’s milestone achievement, we’re looking at the global gender gap. Why are we looking at the gender gap in a tech newsletter? For one, a smaller gender gap is a critical input to increase innovation. And second, it’s a critical output for startups; we’d hope that our most innovative tech businesses are contributing towards (or at least correlated with) more equitable societies.
Latin America ranks behind only North America and Europe. At this pace, LatAm will fully close the gap in 67 years, compared to 59 years in North America and 132 years for the world.
In terms of the economic gap, however, LatAm performs worse. It is ahead of the global average but lags behind most regions. Economically speaking, the pandemic hit women around the world hardest, reducing their labour participation, increasing their domestic care burdens, and widening the divide.
How does each country in LatAm stack up? Mexico and Argentina have the smallest gap, and there’s a small-nation benefit; because of size, small changes to women’s participation in power positions lead to bigger proportional swings, like in Nicaragua. While Brazil is normally the leader of any metric cited in this newsletter, it’s underperforming on this one.
Despite the massive gender fundraising gap, there’s a small silver lining: women are becoming founders around the world faster than before.
This data is global, but there are examples like Garayzar’s in LatAm at least. Increasing participation isn’t just good for women; it’s good for the economy. Research has demonstrated that women are not only on par with men’s leadership skills — they frequently outperform them in the majority of core skills.
Smart links
LatAm startup investment shrank sharply in Q2
The 10 LatAm startups receiving the most capital so far in 2022
Rappi mafia: How a delivery startup took over Colombia’s tech scene
Panama looks to fine tune crypto law, learning from El Salvador
Seasoned entrepreneurs emerge as angel investors in LatAm
Mexico’s largest entrepreneurship hubs: Mexico City, Guadalajara, and Monterrey
Inter-American Development Bank makes $1bn push for ESG bonds in LatAm
Endeavor launches Endeavor Hub, a digital knowledge hub for entrepreneurs
Latin America and the Caribbean is still 67 years away from eliminating the gender gap
Chilean peso extends fall as central bank disappoints FX markets
Brazil: killing of Lula’s party treasurer raises fears of violent run-up to election
Argentina’s new finance minister pledges to bring ‘order and balance’
Might Jair Bolsonaro try to steal Brazil’s election?