Kavak, Nubank, and Rappi expand, while others take a hit
#065: The market's stuck in weirdness. Who's making the most of it?
Hola technopolists,
The market’s stuck in a weird moment: investment data is still grim, while many are keen to call the bottom by saying ‘we’re so back’ or ‘the worst is behind us’.
That weirdness is likely to stay with us for at least another quarter – at least until we get more definitive data – and it’s definitely with us this week. Regional darlings are making perky expansion moves, but the once-lucrative sectors of food delivery and crypto are making headlines for the wrong reasons.
What’s Hot
🚘 Kavak in Chile. On the first anniversary of its operations in Chile, the secondhand car marketplace announced a $40mn investment into the Andean country. It’s the first major news from the unicorn in nearly 10 months, following its $120mn Middle East expansion announced last October. Kavak raised a blockbuster $810mn asset-backed credit facility one year ago to put towards international expansion; with the Chilean news, roughly 40% has now been earmarked. (Contxto)
🏦 Nubank moves up. The Brazil-based neobank now has 80 million Brazilian users, overtaking Banco do Brasil to become the fourth-largest bank in the country. Quick context: the neobank became the fifth-largest Brazilian bank last October, notched 10% user growth since the start of 2023, and now only sits behind Itaú, Bradesco, and Caixa in size. The data gathered by Brazil’s central bank also reports that Nubank claims 60% market share of active Brazilian SMEs. (Yahoo)
💸 Rappi’s lending. The SoftBank-backed food delivery unicorn is partnering with fintech R2 to begin lending to restaurants on its platform in Mexico and Colombia. Taking a leaf out of Doordash’s playbook in the US, Rappi aims to lend $60mn to the ~80,000 restaurants on its platform in both countries. Though it didn’t disclose the loan terms, it’ll use restaurants’ revenue through the platform to receive repayments and reduce delinquencies. (Bloomberg)
What’s Not
🛍️ Merqueo on the brink. The Colombia-based grocery delivery platform quietly shut off its Brazilian app earlier in July, subsequently dismissing nearly all of its 120-strong workforce in the country after racking up supplier debts nearing $1mn. It’s been a perplexing ride for Merqueo, which retreated from Mexico last July but initiated formal IPO filings early this year. Merqueo now only operates in Bogota, and sources say the company is preparing to liquidate its remaining Colombian assets. The retreat is part of a wave of food delivery retrenchments that have seen the likes of Jokr and Uber Eats retreat. (Startups Brasil)
⛓️ Worldcoin lands in Brazil. The global crypto project backed by OpenAI’s Sam Altman debuted in Brazil, with the company’s controversial iris-scanning ‘orbs’ collecting biometric data en masse in exchange for $50 in its eponymous cryptocurrency. The project, a self-proclaimed experiment in identity authentication and universal basic income, has attracted ire for dubious privacy practices in developing markets worldwide. (Brazil Crypto Report)
Stat of the Week
Nubank’s overtaking of Banco do Brazil is worth a second look.
So what? Nubank continues to be a neobank that sets its own standard. Not only does it now boast 85mn customers worldwide – nearly triple the size of Revolut – but it’s grown 45% in its home country over 5 quarters. That’s 9x the average growth rate of the other 5 banks shown. At its current trajectory, we can imagine Nu reaching Brazil’s Top 3 by the end of 2025.
The Rundown
How the Colombian slump in home sales is hitting tech businesses like hardware marketplace Tul. (Bloomberg)
Postmortem: Analysing the rise and fall of unicorn-hopeful proptech Casai. (Contxto)
Inside Revolut’s superapp plans following its new Brazilian licence. (Iupana)
Why two prominent Mexican banks decided to keep their digital innovation arms in-house. (Iupana)
MercadoPago can now lend in Colombia after receiving regulatory approval to become a financing company. (Valora Analitik)
List: The Top 100 Startups in Mexico by funding. (Forbes)
Brazilian corporate VCs double their share of funding activity, filling the gap left by traditional VCs. (Valor)
Deals (July 25-31, 2023)
Fundraises
🇲🇽 Hospitales MAC, a hospital network, raised a $160mn round from General Atlantic.
🇲🇽 Bright, a distributed solar energy company, raised a $31.5mn Series C led by the Danish Investment Fund for Developing Countries with participation from First Round Capital, Y Combinator, Leonardo DiCaprio, and others.
🇲🇽 Vetalia, a veterinary services network, raised a $10mn round from angel investors, including current and former leaders at Rappi, Merama, and Laika.
🇨🇴 Licify, a procurement management platform for the construction industry, raised a $3.4mn seed co-led by Accion and Brick & Mortar Ventures with participation from G2 Momentum, Dash Fund, and Columbia University.
🇨🇱 ZeroQ, a platform that helps reduce customer wait times, raised a $3mn round through crowdfunding platform ScaleX.
🇨🇴 Zhana Solutions, an industrial waste management company, raised a $1.2mn round from Alphamundi, Fondo Acción, the Impact Fund of EAN University, Fondo Asiri, and angels.
🇧🇷 Axur, a digital risk management and cybersecurity platform, raised an undisclosed amount of Series B funding from Igah Ventures.
Debt
🇧🇷 Sanasa, a cleantech and water utility provider in Campinas, raised a $55mn loan from the International Finance Corporation.
Funds
🌍 The European Union announced a $45bn investment package into LatAm, with a large focus on technology and sustainability.
🇨🇴 SMBC and LarrainVial announced the first close of their Colombian renewal energy debt fund, targeting a $200mn final close.
🇧🇷 Virya Capital, a search fund specialising in SME acquisitions, raised a $7mn investment.
🇸🇻 StartupBootcamp, a global network of corporate-backed accelerators, announced it will invest up to $3.5mn in Salvadoran startups.
🇧🇷 Arena Hub and Slat Ventures partnered to launch Sports Angels, a $3mn fund to invest in sports startups.
Simon Rodrigues is a consultant, writer, and speaker specialising in strategy and storytelling for startups.