#003: Major layoffs, Brazil's crypto ambitions, and women in the spotlight
Unicorns cull hundreds of employees while Brazil pursues a national crypto exchange and Bloomberg names the Top 50 women to watch
Hey technopolists,
This week, Brazil’s crypto regulation advanced, early stage funding grew, and unicorns got thinner — with layoffs seen across some of the most high-profile companies in the space. Meanwhile, Bloomberg’s Top 50 list named the top women to watch across the continent, and critics called out LATAM’s equity gap.
Also, if you don’t already, follow me on Twitter (@_simonrodrigues) for the latest updates.
Let’s get into it.
What’s hot
✍🏽 Brazil targets crypto regulation. Last week, the Brazilian Senate approved a bill that paves the way for a nationally regulated cryptocurrency exchange. The exchange would only handle cryptocurrencies (no NFTs or alternative assets) and would fall under the remit of Brazil’s central bank and securities exchange commission. Crypto purists argue this is antithetical to the whole point of DeFi, but proponents say that investment, entrepreneurship, taxation, and law enforcement would all benefit from regulation. If the bill passes, Brazil — as LATAM’s largest economy and most developed fintech ecosystem — would take a giant leap towards mainstream legitimization of crypto. The bill now needs to pass the upper congressional house before getting presidential approval. (Leandro Miguel Souza / Startups BR, 606 words)
💰 Early stage takes centre stage. Global and local investors are creating momentum as new funds open to focus on early stage businesses. Endeavor, the global entrepreneurship NGO and accelerator, has announced that it’s begun fundraising its second fund (Scale-Up Ventures 2), and they’ve already committed $20mn of it to Brazilian startups. This follows the first funds created by Argentina’s 17Sigma ($30mn) and emerging market-focused Tofino Capital ($10mn). What’s more, early stage investment volume is the only segment of LATAM venture funding that has steadily grown in the past two years. (Isabela Fleischmann / Bloomberg Linea, 734 words)
💁🏽♀️ Impactful women in the spotlight. Bloomberg released their list of LATAM’s 50 most impactful women of 2022 last week. The list covers all sectors — from footballers to financiers — and inclusion is based on economic, cultural, and social impact. Most nominees work in finance, and 20% of nominees came from tech, entrepreneurship, and venture (TEV). Among the key TEV candidates were Mexico’s Bárbara González Briseño (Bitso) and Bárbara Garza (Buenbit Cripto), and Brasil’s Silvia Penna (Uber) and Lindalia Sofia Junqueira Reis (HACKING.RIO). — (Bloomberg Linea, full list)
What’s not
🦄 Unicorns face layoffs. LATAM tech giants aren’t safe from the contagion of global macroeconomic pullback, as several unicorns have recently announced steep personnel cuts. Facily, the Brazilian e-commerce darling that became a unicorn with its $135mn fundraise only 6 months ago, is culling at least 130 employees (~30% of its workforce). Loft, QuintoAndar, Creditas, and Liv Up have all announced significant layoffs in the last 2 weeks that reach the hundreds — an echo of the 2,000+ layoffs announced by Silicon Valley startups in the past month. Management say higher interest rates and over-egged blitzscaling are causing the cuts. (Gustavo Brigatto / Startups BR, 414 words)
🤑 LATAM startups are stingy with equity. Rest of World commissioned a small-scale study showing that LATAM startups offer less equity to their employees than US counterparts; restricted stock units (RSUs) are 5x more common in the US than in LATAM. But the full compensation picture still needs more development — stock options and alternative compensation (like crypto tokens) are all critical to comparing compensation, but their high variability makes comparison difficult. On the whole, LATAM founders have the opportunity to share more upside and create a wealthier generation of future entrepreneurs. (Leo Schwartz / Rest of World, 774 words)
Stat of the week
Fintechs dominate LATAM headlines, and here’s a simple chart to show why founders and investors flock to this massive opportunity:
Source: Endeavor via World Bank
For the culture
Global crypto enthusiasts are queuing up to join Bitcoin City, the state-supported, cryptocurrency-fueled autonomous zone under development in El Salvador. What some wealthy futurists (e.g., Peter Thiel, Marc Andreessen) see as a decentralised utopia is being decried by locals and academics as a thinly veiled exploitative neocolonialism — the United Fruit Company of the 21st century. Did I mention they’re building it on top of a volcano? (Laurie Clarke / MIT Tech Review, 3,020 words)
Since releasing 4 albums, winning 6 Grammys, and owning the #1 spot on Billboard’s Latin charts for 3 years in a row doesn’t seem to be enough, Bad Bunny will be expanding his acting repertoire. Marvel has announced that the Puerto Rican sensation, who has previously appeared in Narcos: Mexico, has been cast as the wrestler-cum-superhero “El Muerto” in a standalone Spiderman film set for release in 2024. Bad Bunny seems to be on a wrestling streak; he has recently featured in “Cassandro”, a biopic tracing the rise of the famous Mexican-American luchador Saul Armendariz. Star power abides, as BB will also soon appear alongside BP (Brad Pitt) in “Bullet Train”, set for release this July. (Marianne Garvey / CNN, 148 words)