PIX is now more popular than credit cards
#057: What payment methods is PIX destabilising as it rises to the top?
Hola technopolists,
May’s investment numbers are in, and they’re… well, they’re pretty bad. But, as if to buoy our sentiment, two mega-rounds and a slate of fundraising announcements arrived to kick-start June (see Deals below for more).
What’s Hot
🟣 Nubank announced an additional $160mn of investment into Colombia by 2025, raising the neobank’s total investment in the country to $460mn. Today, Nubank has 635k credit card customers in Colombia — roughly 3.6% market share — and is the company’s third-largest geography. From Nubank’s past experience, market entry doesn’t come cheap: the bank recently hit 5mn users in Mexico having invested $1.3bn there. (Reuters)
🏦 Neobanks and consumer fintech startups in Brazil have grown significantly in the past year despite the macroeconomic chop, according to a slew of recent data releases. Fintechs and neobanks have expanded to 6% share of Brazil’s $1tn consumer credit market, up from 4.8% the year prior (and non-existent five years ago). In the past three years, the number of credit cards issued by fintechs and digital banks more than quadrupled — as has the number of open finance API calls. (Fintechs Brasil)
📱 Mexican smartphone app usage rose to the global top 10, according to new data from growth agency RocketLab. Total in-app spending crested $700mn in 2022, a 22% YoY increase, with the majority of spending coming from ecommerce, fintech, streaming platforms, and food and beverage delivery. Mexicans are amongst the most smartphone-heavy users in the world, logging an average of 4.5 hours per person per day (TechLA)
What’s Not
📉 LatAm VC investment in May posted its worst results of the year, with investment levels dropping to their lowest since July 2020. Total investment value plummeted to $253mn, an -82% decline compared to the year prior. Deal count fared slightly better, with 70 funding rounds completed (-36% YoY) as early-stage investment activity continues with characteristic resilience. A not-so-surprising bright spot was deeptech, a minuscule segment that nearly 5x’d in a year. (Sling Hub)
🛩️ Brazil’s largest online travel agency, Hurb, is laying off 40% of its staff and making mass cancellations in a bid to stay alive after weeks of public discord. The platform rose to prominence during the pandemic with travel packages enabling customers to pick a destination while choosing dates and details later. The company now faces a cash crisis. Airline partners claim they owe at least $3mn, while thousands of customers have been abandoned without recourse after their bookings have not been honoured. The government has since banned Hurb from selling any more flexible packages. (Globo)
Stat of the Week
Did you really think there would be Brazilian fintech news that didn’t somehow loop back to PIX? While neobanks are making inroads in credit cards, PIX again manages to triumph.
So what? PIX’s meteoric rise has been well documented elsewhere – but this data tells us, for basically the first time, what digital payments methods PIX is cannibalising. Transfers on bank rails are understandably vanishing, since PIX is basically the new bank transfer. Boleto – a ‘ticket’ that represents a cash transfer – is the next most-impacted payment method, likely to go the same way as your mother’s chequebook.
The Rundown
🏠 AirBnB Latin America grew 22% YoY in its latest earnings release — an important growth lever as the company focuses on lower-cost stays to fight inflation →
🤑 Brazilian co-founder of Facebook, Eduardo Saverin, became the richest person in Brazil (and 93rd richest in the world) →
💼 32 firms dropped out of Mexico’s fintech regulation process, casting doubt on the strictness of the law →
🌐 Citigroup now plans to take Banamex public after doomed sale to Grupo México →
💳 Stori, the Mexico-based consumer credit card provider, hit 2 million users →
💸 Mercado Bitcoin, Brazil's largest crypto exchange, received a license to become a payments institution →
🎯 Brazilian neobank C6 is targeting high-income customers by launching new bricks-and-mortar branches →
📺 Explainer (Video): The Future of Finance in LatAm, from QED’s investment team →
💳 Apple Pay launched in El Salvador, Honduras, Guatemala, and Panama, raising its total number of LatAm countries to 10 →
🇺🇸 US Census data indicates that Hispanics are the youngest demographic in the country, and one in four US children are Hispanic →
🍺 FEMSA, Mexico’s Coca-Cola bottling conglomerate, is looking to sell another 6% of Heineken shares →
📊 SoftBank’s stock price had its biggest week in three years, surging 17% on the back of a strong outlook for AI companies and Nvidia →
Deals (May 30 - June 5, 2023)
M&A
🇧🇷 Flexdoc, an identity verification startup, was acquired by 🇧🇷 Valid Soluções, a secure printing company, for $7.9mn. The deal was announced on May 23, 2023.
🇧🇷 Code7, a customer service software, was acquired by 🇺🇸 Yelcho Partners, an investment fund, for an undisclosed amount.
🇧🇷 Meetime, a sales engagement platform, was acquired by 🇧🇷 Sankhya, an ERP software, for an undisclosed amount.
🇧🇷 Bankly, the banking-as-a-service platform of Méliuz, was acquired by 🇧🇷 Banco BV, a bank, for an undisclosed amount.
🇦🇷 S4Go, a farming intelligence platform, was acquired by 🇧🇷 Agrotools, an agribusiness platform, for an undisclosed amount.
Fundraises
🇨🇴 Habi, a real estate marketplace, raised a $50mn round from IDB Invest. The funds will be used to finance deeper expansion into Mexico.
🇨🇱 Ceibo, a sustainability-focused industrial biotech for the mining industry, raised a $30mn Series B led by Energy Impact Partners with participation from Khosla Ventures, CoTec Holdings, Audley Capital, Orion Industrial Ventures, Unearth Capital, and Aurus Ventures.
🇧🇷 Sami, a health insurance marketplace for SMEs, raised an $18mn Series B led by Redpoint Ventures and Mundi Ventures.
🇦🇷🇺🇸 Waterplan, an AI-driven water conservation platform, raised an $11mn Series A led by Base10 Partners with participation from Giant Ventures, Transition Global, Y Combinator, MCJ Collective, and the Branson Family.
🇧🇷 Compra Rápida, a one-click-to-buy ecommerce platform, raised a $3.6mn seed led by Olive Tree Capital with participation from Y Combinator, Iporanga Ventures, Verve Capital, and Soma Capital.
🇨🇱 BuyDepa, a real estate marketplace, raised a $1.5mn seed from Quest Capital Partnership.
Debt
🇲🇽 Stori, a fintech consumer lender, raised a $50mn debt facility from Community Investment Management (CIM). It is the fund’s second credit line to the startup.
VC Funds
🇲🇽 ALLVP, an early-stage fund, announced “ALLVP IV”, a new $150mn fund to invest in artificial intelligence. ALLVP currently manages over $300mn in assets.
Simon Rodrigues is a consultant, writer, and speaker specialising in strategy and storytelling for early-stage startups.