Where will deeptech take off next?
#059: Ex-SoftBankers launch a new fund, Brazil’s central bank launches a superapp, and Visa makes M&A moves.
Hola technopolists,
There are some gathering greenshoots that might just signal a spring following the funding ‘winter’: M&A interest is picking up, tech stocks are powering public market rallies, LatAm’s got a shiny new growth fund, and we’re seeing mega-rounds on a weekly basis…
For those of you who are new or missed last week, don’t miss out: I’m gathering names for those interested in posting to a (potential) Technopoly job board, so fill out this flash survey to register your interest—it’ll be open until the end of the month.
What’s Hot
🚀 Ex-SoftBankers launch a new VC firm. Bicycle Capital, newly founded by former SoftBank LatAm execs Marcelo Claure and Shu Nyatta, is targeting a $500mn close for its inaugural LatAm-focused growth fund; so far, it has secured $440mn in commitments with anchor investments from Claure’s family office and Mubadala (Abu Dhabi’s sovereign wealth fund) alongside participants like Nubank’s David Vélez and BTG’s André Esteves. The fund’s launch has been highly anticipated, with discussions swirling since the senior duo left SoftBank’s LatAm fund in 2022 following Claure’s $2bn compensation disputes. (Bloomberg)
📱 Brazil’s central bank is developing its own financial superapp. Roberto Campos Neto, the BCB president, explained that the app will be a full personal financial aggregator, pulling data from PIX, bank accounts, credit cards, the digital real, and even international currencies. The ambitious project—currently in its first stage of implementation—will even allow users to tokenise and sell their own data to third parties, something Campos Neto calls a ‘digital data portfolio’. (Finsiders)
🤑 Visa edges past Mastercard to acquire Pismo. According to insiders, Visa—which has been vying with its key rival over the deal— is in advanced talks with Pismo, the São Paulo-based B2B payments platform, which received a purported $1.4bn price tag in Q1. The acquisition could come within weeks, and if completed, would represent the biggest LatAm fintech exit since Nubank’s 2021 IPO. (Valor Econômico)
What’s Not
🇧🇷 Brazilian BNPL pays…now. Addi, the Colombia-born BNPL unicorn with a star-studded cap table, announced the closure of its Brazilian operations; after two years in the country, it reached 750 companies and 500k end users with its PIX-based offering. The Addi announcement came days after mass layoffs at Provu, the Brazilian BNPL-adjacent fintech. Not only has BNPL faced global challenges (see: Klarna’s -85% valuation cut), but PIX’s own BNPL offering has been a major competitor that threatens the entire Brazilian ecosystem. (Finsiders)
🇨🇳 Shein faces a new war in Brazil. Temu, the ecommerce platform backed by Chinese supergroup Pinduoduo, will launch in Brazil, according to exclusive reports by Neofeed. While Temu is an Amazon-style marketplace, its retail offering competes head-to-head with Shein, and analysts forecast that the move will be a nightmare for Shein: Temu already leads Shein in app downloads across 12 of 25 major markets—including in the US, where Temu has logged 20% more sales, according to Bloomberg estimates. (Neofeed)
Stat of the Week
‘Deeptech’ today is what ‘state-of-the-art’ was in the Nineties: sexy, aspirational, flush with cash, and doling out lopsided growth. These days, the category — which covers everything from AI to nanotechnology, robotics, and advanced biotech — has carried the weight of the entire ecosystem’s hopes and dreams at a moment where hope (and capital) is in much shorter supply.
So how does deeptech follow — and buck — innovation trends around LatAm?
So what? The first wave of investment has been propelled by biotechs (and especially agro-biotechs), which make up 61% of the region’s VC investment. That’s largely come from Argentina and Chile, where an innovation head start translated to a handful of soonicorn-worthy success cases (e.g., Bioceres and Stamm in Argentina; NotCo in Chile) that provide enough sizzle to convince investors to double down.
Brazil is well-poised to explode: after a relatively slow start (Brazil is responsible for 40%+ of overall VC activity, after all), leading indicators are all trending positively: STEM talent, patent filings, and research paper volumes align with a major uptick in new startup formation. Mexico and Colombia show echoes of the same trend, but with more tepid signals.
Costa Rica has to prove whether it’s a one-hit-wonder: Establishment Labs, a medical devices company, is listed on the NASDAQ ($ESTA) and trades at a $1.7bn market cap.
The Rundown
💰 Study: Appetite for mergers and acquisitions is growing in Latin America. (Reuters)
🚘 Analysis: an update on Kavak since its blockbuster year in 2021. (Whitepaper)
🤖 Report: The LatAm countries where deeptech is flourishing. (Bloomberg, IDB Lab)
🇧🇷 Brazil’s central bank has officially been named as the regulator for crypto markets, which likely means a lenient, crypto-friendly legal framework. (Brazilian Report)
🔈 Spotify is launching advertising tracking analytics around LatAm, alongside swish new PIX payment rails in Brazil. (Startupi)
💳 Plata will take on Nu and Stori in Mexico with a credit card offering up to 5% cashback. (Latam Fintech Hub)
⛔ Payback, a Mexican B2B loyalty wallet operator for 78 mainstream brands, will cease operations in November. (Forbes)
🇨🇴 Colombia’s central bank is partnering with Ripple to explore a central bank digital currency, following Brazil’s lead. (CoinDesk)
📉 Molten Ventures cut its valuation of Revolut by -40%. (Bloomberg)
👁️🗨️ GitHub CEO Thomas Dohmke discussed the company’s plans to expand into Brazil at WebSummit Rio. (Bloomberg)
Deals (June 13-19, 2023)
M&A
🇧🇷 Clouki, a foodtech that operates digital native cloud kitchen brands, was acquired by 🇧🇷 Simple&Co., a competitor. Financial details were not disclosed.
Fundraises
🇺🇸 FZ Sports, a sports media and content platform, raised a $74mn round in a mixture of equity and debt from 777 Partners, MEP Capital, Torneos, Serengeti Asset Management, and Magma Partners. The company has a significant footprint in Latin American sports leagues.
🇨🇴 FinMaq, a consumer and SME fintech, raised a $23.5mn round from undisclosed investors in a mixture of equity ($3.5mn) and convertible debt ($20mn).
🇧🇷 Dr. Consulta, a network of medical centres focused on low-income patients, announced a $20mn round led by IDB Invest with participation from the Japan International Cooperation Agency.
🇪🇸 Bit2Me, a crypto exchange, raised a $15mn round led by Investcorp with participation from Telefónica, Stratminds VC, Cardano, and YGG Fund. The funds will be used to expand in Latin America.
🇧🇷 Kanastra, a capital markets infrastructure provider, raised a $13mn seed led by Valor Capital and Quona capital with participation from QED, Actyus, Collaborative, Crestone, Grão, Endeavor, ClockTower, Latitud, Norte, and angels.
🇧🇷 Exato Digital, a KYC and background check platform, raised a $3.5mn round from undisclosed investors.
🇧🇷 Mombak, a forestry and carbon capture climatetech, raised a $3mn round from undisclosed investors.
🇧🇷 Intellya, an AI-based threat intelligence software, raised a $1.5mn seed led by Gabriel Paiva (Dfense Security).
Debt
🇦🇷 The Inter-American Development Bank approved a $35mn loan to Argentina to invest in AI and human capital in the knowledge economy.
VC Funds
🇺🇸 Bicycle Capital, a Miami-based growth firm focused on Latin America, launched its inaugural fund targeting a $500mn close. The fund has $440mn in committed capital from Marcelo Claure’s family office, Mubadala (Abu Dhabi’s sovereign wealth fund), David Vélez, André Esteves, and others.
Simon Rodrigues is a consultant, writer, and speaker specialising in strategy and storytelling for early-stage startups.