The most underrepresented readers in LatAm
#050: Kavak makes headlines after 4 months of silence, and Technopoly turns one year old.
Hola technopolists,
Today is Technopoly’s first anniversary.
Thousands of you have joined the Technopoly journey, and I’m extremely grateful for every article you’ve read, liked, and shared. Across the past 50 editions, we’ve built a vibrant community of readers looking for a sharper, keener, and leaner view of Latin American tech and venture capital.
For those of you who are new, let me take a moment to re-introduce myself:
I’m a freelance startup consultant specialising in growth, strategy, and branding. With nearly a decade of experience as a management consultant and a startup operator, I’ve sat in the same chairs as many of you — I understand much of the pain you’re going through now, which is what set me out to consult and write in ther first place.
Through my consulting and writing, my goal is always to share punchy insights that add grist to the mill for high-octane, time-poor investors and operators.
Today, my clients cut across industries — from fintech to edtech, gaming to professional communities — and have raised hundreds of millions in venture funding. To learn more about what I do, follow this link.
And for now… back to our regularly scheduled programming.
What’s Hot
💰 Brazil’s Pix instant payment system broke two records last week as consumer adoption and merchant acceptance surge. On April 6, Brazilians conducted 122mn transactions worth $12.8bn via Pix — that’s 7 transactions for every 10 Brazilian adults, each worth an average of $104. Plus, a new study indicates that 93.2% of Brazil’s largest online merchants now accept Pix as a payment method, compared to 27% acceptance rates of debit and credit cards. Before the results, the study’s researchers estimated that adoption would struggle to crack 93%; they’ve since estimated that Pix will reach 96% adoption. (Globo)
💸 Spin, the digital wallet provided by Oxxo, received authorisation to become an electronic payments entity (IFPE). The approval is a huge coup for the fintech powered by Mexico’s largest convenience store chain. Now, Spin can support account-to-account digital payments — a hot feature in a country lacking a frictionless, ubiquitous e-payments system like Pix. The authorisation is especially rare because regulatory approval under Mexico’s Fintech Law has been extremely challenging, with rivals typically buying their way into IFPE approval (see: Walmart’s acquisition of Trafalgar). (Tekios)
🚘 Kavak announced the acquisition of OPI Analytics, a Mexico-based data science company that develops machine learning-based models for clients around Latin America. Deal terms were not disclosed, but here’s what we know: according to Pitchbook, OPI has raised $1mn from 3 investors and lists 11 employees on LinkedIn. OPI’s CEO, Alejandro Maza, has been acqui-hired to become Kavak’s new Chief Data Officer. Though not earth-shattering, this represents the first real piece of news from the company since its organisational re-shuffling and cost-cutting doldrums of late 2022. (TECHLA)
What’s Not
🛍️ Brazilian unicorn Facily has undertaken a colossal down-round and is “likely a write-off”, according to company employees and investors. Per an investigation by Neofeed, the social commerce platform has received a capital injection at a 80% valuation cut to its 2021 fundraise, when it raised $135mn at a $1.1bn valuation. According to the reports, the company is attempting a drastic re-boot after cutting 80% of its 1,000+ workforce, shuttering operations everywhere but São Paulo, and slashing monthly cashburn from $30mn to $2.5mn. The cause of its woes has been a reported 90% decline in total transaction volume on their platform, a sector-wide trend that has forced foreign rivals Favo (Peru) and Muni Tienda (Colombia) to exit the country. Facily’s CEO did not respond to the claims directly but admits the company nearly folded; now, he claims the company can break even this year.(Neofeed)
🚫 Rappi stirred the pot, dispelling IPO rumours fuelled by one of its prominent investors. In an interview, CEO Simon Borrero stated that the company has no plans of going public ever, claiming that the company has already reached breakeven profitability and no longer needs capital injections to survive. His comments referred to last week’s TechCrunch interview with Juan Franck, SoftBank’s LatAm fund manager, which listed Rappi as one of many potential portfolio companies to IPO this year or next. Sounding defensive, Borrero stated: “It is not in the plans and it is not a decision made by anyone more than Rappi, its team, and its founders… We are a company that has a scale and sustainable business, that has cash and doesn’t need money from anyone outside.” Roar. (Bloomberg)
Stat of the Week
Technopoly’s first anniversary is a good opportunity to shine a light on all of you. Here’s a breakdown of Technopoly’s global readership:
So what? Of the 2,000+ subscribers, nearly half are from Brazil. Interestingly, this has roughly approximated the levels of VC investment in the region we’ve seen in the past 12 months. This is completely organic — I haven’t even set foot in Brazil since this newsletter was launched.
Mexico is surprisingly underrepresented (especially considering the amount of venture capital deployed and the time I spend here). It is no major surprise that it shares rough representation with the US, since this newsletter is in English, after all.
The Rundown
📉 According to Crunchbase, Latin American Q1 venture dollars dropped -84% YoY to hit the lowest point in two years →
🏦 A study by Serasa Experian estimates that 35mn Brazilians — 22% of the adult population, and disproportionately young — do not have a single financial record and are blocked from credit sources →
💬 Meta revealed that WhatsApp Pay will soon launch in Brazil, enabling merchants to receive payments in WhatsApp via debit, credit, and prepaid cards from Mastercard and Visa — but not Pix →
📈 Analysts at Santander and UBS raised their target share price for Mercado Libre to 20% above its current value, signalling a strong growth outlook for the e-commerce and fintech platform →
🔎 Inside Mercado Pago's strategy to be one of the three largest digital banks in Brazil by 2025 →
🛒 Brazilian retail giant chain Magalu is reinforcing its fintech strategy by naming Banco Carrefour’s ex-CEO as its new fintech lead →
🇦🇷 Ponzi schemes, spirituality, and cryptocurrencies collide in the boom-bust tale of Argentine platform Generación Zoe and its guru-like founder →
🇸🇻 El Salvador’s crypto reserves are still down -29% despite recent bitcoin rallies, while crypto remittances fell -18% YoY →
Deals (April 11-16 , 2023)
M&A
🇲🇽 Kavak, the secondhand car marketplace, acquired 🇲🇽 OPI Analytics, a data science company, for an undisclosed sum.
🇧🇷 Superbid Exchange, a digital platform supporting auctions and B2B transactions, acquired 🇧🇷 Canal do Campo, a livestock marketplace, for an undisclosed sum.
🇧🇷 SPOT Metrics, a data intelligence and CRM platform for retail, acquired 🇧🇷 Action and 🇧🇷 Guru CRM, two similar CRM and sales enablement platforms. The combined acquisitions are valued around $10mn.
🇧🇷 NonStop Produções, a content company for digital platforms, announced the acquisition of 🇧🇷 DeuBom, a proprietary influencer marketing platform, for an undisclosed amount.
🇫🇷 Publicis Groupe, a media and tech conglomerate, acquired 🇦🇷 Practia, a digital transformation agency, for an undisclosed amount. Practia will be integrated into Publicis Sapient, the digital business transformation subsidiary of Publicis Groupe.
🇧🇷 DM, a private label credit card issuer, acquired 49% of 🇧🇷 FortBrasil, a fintech rival, for an undisclosed amount.
🇨🇴 KIO Network, a data centre and digital infrastructure platform, acquired 🇨🇴 Zetta Complex, a datacenter, for an undisclosed amount.
🇵🇹 Bravantic, an IT infrastructure integrator, acquired 🇧🇷 InfraTI, a digital infrastructure-as-a-service company, for an undisclosed sum.
Fundraises
🇨🇴 Instaleap, a retailtech software powering rapid deliveries, raised a $5mn round co-led by Redwood Ventures, Pegasus, and Eduardo Castro-Wright (ex-CEO of Walmart).
🇨🇴 Kala, a fintech infrastructure provider, raised a $4mn round led by Cometa with participation from existing investors (Canary, Acrew, Clocktower and 99 Startups).
🇧🇷 Eyecare Health, a software platform for eye doctos, raised a $2.6mn seed from VOX Capital.
🇪🇸 MediQuo, a platform for digital doctor consultations, raised a $1.5mn round led by Grupo Silanes with participation from Encomenda, Trampoline Venture Partners, Capital Cell, and Tokavi. The company will use the funds to expand to Latin America.