LatAm’s Mega Deals

Originally published on Fintech Today on June 15, 2021

Jenny here.

Is there anything hotter than fintech in Latin America right now? While Ian at Bitcoin Week in Miami may give LatAm a run for its money, the last month in Latin American fintech has been, dare I say, lit. The original plan for this week was to dive into Central Bank Digital Currencies (CBDC) but I had no choice but to change course with everything going on.

It has been a month of mega deals by size and volume, new funds, and more IPO fun. What can you expect from a region of:

• 630M people
• 8 of the 20 countries across the world
• The largest concentration of bank power
• Highest income inequality
• Highest interest rates
• Below average public health expenditures as a proportion of GDP
• Ridden with large, unplanned urbanization

If you missed my big ‘why you should care about fintech in LatAm’ sermon, check out my February piece. TLDR: the region is primed for fintech disruption and disruption it shall have.

Today we are diving into what you should know, but please excuse me if I have missed anything as I simply can’t keep up. By the time we publish, who knows what else will have been announced.

Deals

Latin America has welcomed in a new member to the unicorn club: Clip. Clip is a digital payments and commerce platform in Mexico. They raised $250M (the largest round ever for a payment company in Mexico) from SoftBank Latin America Fund and Viking Global. The valuation came in at $2B, making Clip the first payments unicorn in the country. It was also SoftBank LatAm Fund’s first investment, and they have seen them grow to 600+ employees across Mexico, the US, and Argentina.

Now onto the biggest LatAm unicorn, the tri-decacorn (is that how that works?) Nubank. Last week, Nubank raised a $750M extension to its Series G (which was a $400M round in January) at a valuation of $30B. Nossa. That means WOW in Brazilian Portguese. The real wow for me is not that they have raised $1.15B, or that its latest valuation is $5B more than it was in January, or that Nubank has serves 40M users (up from 35M less than 3 months ago). The wow is that our friends in Omaha, Warren Buffett, led this round with a $500M check.

Nubank is now live in Brazil, Colombia, and Mexico. At the same time, I haven’t heard as much buzz about Nubank’s Colombian or Mexican credit card product as I would have expected since its cross-border expansion in 2018. Not many fintechs have successfully expanded pan-region and if Nubank can’t figure it out, there may be little hope for all the $10M pre-product seed decks I see promising total LatAm domination.

On to even more mega deals:

• ​QuintoAndar raised a $300M Series E at a $4B valuation from Ribbit, with participation from SoftBank LatAm Innovation Fund, LTS, Maverik, Alta Park, KASZEK, Dragoneer, and others. QuintoAndar was a first mover in disrupting the renters real estate market in Brazil.
• ​Bitso, the cryptocurrency platform, raised a $250M Series C from Coatue and Tiger Global.
• ​Kushki raised $86M from SoftBank’s Latin America fund with follow-on from DILA Capital, Kaszek, Clocktower Ventures and Magma Partners. Kushski is an Ecuadorian payments platform. With a reported valuation of $600M, Kushki may soon enter the LatAm unicorn club.
• ​ADDI, a Colombian point-of-sale lending platform, raised a $65M Series B from Union Square Ventures
• ​Belvo, the “Latin American Plaid” raised a $43M Series A from Future Positive, Kibo Ventures, FJ Labs with follow-on from MAYA Capital, KASZEK, Venture Friends and the CEO of Nubank, David Veléz. *Disclosure that I am a tiny investor in Belvo.
• ​Jeeves, the expense management platform, emerged from stealth mode with a $31M led by a16z with participation from YC Continuity Fund, Jaguar Ventures, Urban Innovation Fund, Uncorrelated Ventures, Clocktower Ventures, and others.
• ​idwall, the Brazilian regtech focused on identity validation and risk analysis, raised a $38M Series C led by Endurance.
• ​Clara, a Brex look alike for corporate credit cards and expense management in LatAm, raised $30M from General Catalyst, DST Global and monashees. The round really closed a while ago but hey, never too late to post about a round (rumors are that the next raise is coming soon).
• ​Onze, the Brazilian pension plan management platform, raised a R$52M (~$10.4M) Series A from Ribbit Capital.
• ​Pomelo raised $9M Seed from Index, monashees, a16z and others. Pomelo is one to watch as one of the first fintech-as-a-service players in the region. If you thought BaaS was big in the US, wait until to see what these players will do to transform the fintech and embedded finance opportunities in Latin America.
• ​Divibank raised $3.6M from Better Tomorrow. Divibank is a Brazilian revenue-based financing platform for startups and SMEs. The round included Village Global, Clocktower Ventures, Magma Partners, Rally Cap Ventures and others. *Disclosure that I am an investor in Divi.

Funds

The fintech party was not exclusive to deals this past month. Many new fund raises were announced as well. Kaszek, one of the first Latin American VC funds founded by some of the MercadoLibre mafia, reached a $475M close of their fifth flagship early-stage fund. They also closed a $250M late-stage fund called Kaszek Ventures Opportunity II. If you are not already following Kaszek, you should (they are now revived on Twitter which makes it a bit easier).

Other notable local raises were OneVC, the roaring seed fund, which closed a $18M second fund to invest pan-region. On the US front, QED raised a $12M seed and pre-seed fund called Fontes, focused on fintech startups in Latin America. I also have to shout out Clocktower Ventures who similarly raised a LatAm fintech focused fund in March — coming in at $25M for early-stage bets. Andreesen has also been more active and more focal about the opportunity in Latin America. Don’t miss checking out a16z’s post on the region. Bravo Matt for that and a tweet I couldn’t agree more with:

IPOs

Last but not least, the US isn’t the only market seeing fintech startups go public, though the SPAC wave hasn’t taken off in LatAm yet.

Dlocal went public in early June on the Nasdaq, giving the Uruguayan cross-border payments firm $620M in fresh capital and a market cap of ~$9B. Nubank is rumored to soon be filing for an IPO in the US. PicPay, a Brazilian mobile payments app, filed their F-1 in April for an IPO on the NASDAQ valued at up to $100M.

Historically, the most sought after jobs in Latin America were the usual traditional higher paying salary jobs: banking, consulting, law, and even accounting. Latin Americans in tech preferred a higher salary over higher equity, with many not even knowing how to value equity. There were also only a handful of liquidity events for startups. These truths are changing, and with them, I hope a point of view shift is coming for Latin America with this new wave of IPOs. These startups going public could mean some big returns for a wave of Latin American entrepreneurs and a new generation of capital-flush future founders and angel investors. I am hopeful this will provide another strong datapoint for the best minds across the region to escape banking, consulting, and law to go rocketship building and start valuing equity along the way.

Is anyone else’s head spinning? As I mentioned up top, seriously, @ me if I missed anything. Otherwise, see you next time!