Spanish-speaking startups outperform global peers
#075: Shein and StoneCo announce management changes
Hola technopolists,
We’re two weeks into October, and Q4 is officially underway. As we wait for Q3 earnings results, it’s a perfect opportunity to look back at Q3’s VC activity (more in the Stat), and forward to all the management shuffles from Shein to StoneCo.
Meanwhile, if you’re looking for a riddle to solve, you can try to explain the logic behind the Southern Cone hosting just 3 matches in World Cup 2030.
What’s Hot
🛍️ Claure shines at Shein. Marcelo Claure, current head of Bicycle Capital and former SoftBank COO, was named Shein’s Global VP as the fast fashion behemoth leans deeper into LatAm. Claure was named Shein’s LatAm chairman in January, and his promotion reflects Brazil’s growing importance both to Shein’s supply chain and retail revenues. The company has contracted 200 manufacturing facilities across 12 Brazilian states in the last year, while Claure has been involved with the Brazilian tax reform that enables breaks on international purchases up to $50. Shein’s aggressive Brazilian expansion has inspired fear and ire from local rivals, with Chinese counterparts like Shopee and AliExpress following suit. (Bloomberg Linea)
📊 Hispanophone hype. New analysis from Nazca Ventures highlights how startups in Spanish-speaking LatAm (SSL) generally outperform their global peers in capital efficiency. The analysis shows that SSL startups produce roughly 4x more revenue and gross profit per dollar raised than global VC benchmarks; SSL startups also generate nearly 3x as much revenue per employee than global benchmarks, too. The one laggard stat is EBITDA, where SSL is currently behind global benchmarks — a sign that overheads are still slightly bloated, though at current growth rates, that gap would be erased by 2024. (Nazca Ventures)
🌱 Agro-M&A in Brazil. Despite an overall downturn in merger and acquisition activity around the world, activity in Brazilian agribusiness has grown 30% in 2023, according to a new PWC study. In the year through August, 56 M&As took place in Brazil in 2023, compared to 43 in 2022. The report’s publishers estimate that agribusiness has been more resilient because of its centrality to the Brazilian economy and tech’s reach within it: a Brazilian federal study estimates that 84% of farmers use at least one digital platform in their operations, while Brazilian agritech companies alone are estimated to be worth $8bn by 2026. (Startups Brasil)
What’s Not
🏦 StoneCo’s management shakeup. Nearly six months into his tenure as StoneCo’s chief, CEO Pedro Zinner is restructuring the fintech’s top brass in an attempt to accelerate its profit transformation and save its share price from the doldrums. The reorg is branded around focusing more on the end customer, but in effect, it gives Zinner more direct oversight to drive the turnaround: business units are now aligned by customer segment (instead of by product), and business unit leaders will report directly to Zinner (removing other buffer C-Suite execs). Despite consecutive quarters of profitability growth and a share repurchase announcement, shares have slid for 2 consecutive months and are nearing all-time lows. (Brazil Journal)
⛓️ An Argentine CBDC? Argentine Economy Minister and presidential hopeful Sergio Massa made a surprise announcement at a presidential debate on Sunday, revealing his intent to launch a central bank digital currency if elected premier. Crypto-optimists might find this Hot for its link to CBDCs programmes like Brazil’s Drex, but we’re scratching our heads at this announcement: the real-world use cases for CBDCs are still unclear, which makes this move feel both like distracting Hail Mary while inflation rages at +100%. Plus, it’s not even certain which currency Argentina will be using in coming years — not if Milei has his way. (Pagina 12)
Stat of the Week
One month ago, we celebrated how August topped 2023 in VC activity, thanks largely to Brazil and debt rounds.
Now that September has come and gone, we can ask: did all that momentum carry on?