Antonia Rojas Eing joins ALLVP as the youngest female VC partner in Latin America

Antonia Rojas Eing, the youngest female partner of Latin America’s major VCs, has joined ALLVP as a partner. 

Twenty-nine year old Rojas Eing first entered the investment world in Germany (she is half Chilean, half German), but with a real estate angle. “I learned the discipline and analysis needed to make an investment decision, and how to see the world from an international perspective,” she noted. 

Good VCs are often founders-turned-investors. Rojas Eing has worked on the startup side as well, as she pursued an entrepreneurial project with an edtech startup a few years ago, although that company is no longer in existence. She experienced how hard it was to raise early stage capital in Chile – a problem she is back now to solve. After some time in the Bay Area pursuing a masters degree in social entrepreneurship, she returned to Chile to invest in seed stage startups with a fund called Manutara. Now, after a months of mentorship with ALLVP, she will be joining the Mexico-based fund as their third partner. 

Rojas Eing says her first focus will be on enterprise SaaS in Colombia, Mexico and Chile. “Latin America is the biggest untapped VC opportunity in the world, and ALLVP is all about transforming and improving the way Latin Americans lead daily lives.” Indeed, Latin American startups can get funding if they’re solving serious pain points for the region’s massive, digitally engaged middle class. 

ALLVP is one of the most active new wave funds in Spanish-speaking Latin America right now. The firm, which was founded in 2012, was an early backer of Cornershop, the Chilean grocery delivery startup that raised $31.7 million (mostly from Silicon Valley’s Accel) and exited to Uber after a $225 million deal with Walmart unraveled after being blocked by antitrust regulators in Mexico. ALLVP has also invested in Colombian cloud kitchen MUY and Mexican Opendoor clone Flat. The firm has over $200M in assets under management across three portfolios, having closed its third $100M fund in 2018. 

The relationship Rojas Eing and ALLVP serendipitously began at the TechCrunch Sao Paulo Battlefield event in 2018, when Rojas Eing and ALLVP general partner Fernando Lelo de Larrea judged a Startup Battlefield session together. 

Antonia Rojas Eing and Fernando Lelo de Larrea judge Startup Battlefield São Paulo in November 2018.

Toward the end of 2019, Softbank began rapidly deploying its $5 billion Latin America-focused Innovation Fund, enabling growth stage financing for companies like Brazil’s QuintoAndar, Mexico’s Konfio, and Argentina’s Uala. “Softbank is a confirmation that Latin America is going through a special moment, and it allows us to think big. Softbank has already transformed the region and will continue to do so,” says Rojas Eing.  

As the youngest female partner in this part of the globe, one can’t help asking what it’s like to compete in a male-dominated field, let alone in a region that has historically been socially and politically hostile to women.

For example, Magma Partners’ Sophia Wood points out that “married women in Chile could not purchase real estate or open a credit card without their husband’s permission until 1977, and divorce was only legalized in 2004. As recently as 2018, Chile’s ‘sociedad conyugal’ marriage law still prohibited women from managing joint financial accounts—up to 50 percent of Chileans are currently married under this law. Similar laws have restricted women’s access to credit, capital, and even education across Latin America until the recent past.”

Undoubtedly, sexist rhetoric has bled into the tech scene in regards to funding female-led companies. “Only .4 percent of the $400 billion in venture capital funding deployed between 2009 and 2017 went to Latin American women,” details the same report

“You cannot be moving with doubt,” remarks Rojas Eing. From her vantage point as a 29-year-old female partner, she feels responsibility to surface conversations about gender imbalance and inclusivity in her work. 

“Women entrepreneurs and investors represent the largest untapped pool of talent in the world. Working in a relatively young ecosystem such as Latin America provides us with the unique opportunity of creating a more inclusive entrepreneurial and VC community from the start,” says ALLVP partner Federico Antoni.  

In an industry historically dominated by toxic masculinity, sexist frameworks of thinking and extreme gender imbalance, there’s an opportunity to grow the inverse of these worldviews. Hopefully, leaders in Latin American tech will instate tactical measures to encourage positive masculinity in its rapidly expanding startup culture, and we will see more women assigned into leadership roles at startups and funds.

Perhaps as Latin America’s nascent tech revolution explodes, founders and investors can learn from Silicon Valley’s pioneering mistakes in blitzscaling, valuing profitability over growth, and startup culture that have kept women underrepresented and unsafe at work for over a decade. 

As far as ALLVP’s track record goes, partner Federico Antoni says that female founders made up 33% of their first fund, and that 20% of the companies in their second portfolio were co-founded or founded by a woman. The third fund has yet to invest in a female entrepreneur. 

Expanding the pipeline to reach more female entrepreneurs is a focus for ALLVP, and the fund says that while the ALLVP team meets with only a third of pipeline opportunities, they offer meetings with any female founder. 

More funds are diving into content marketing. Sites and blogs leverage SEO to widen the top of the funnel. Podcasts and newsletters help funds establish themselves as thought leaders and grow interest from the brightest founders. ALLVP is tapping into the content opportunity with a monthly podcast series that educates around the gender imbalance in tech too. 

Representation matters, and women fund women. ALLVP hopes that bringing Antonia on to the team will help the fund be a better partner to women. “having her on board is not a box we checked but part of a process that will ultimately lead us to a more balanced team, portfolio, and better returns.”

Assigning more women to leadership roles is certainly one step in the right direction. 

How two-year-old Loft nabbed $175M led by Andreessen Horowitz

Loft may have better product market fit in Brazil than Opendoor does in the U.S. And now the São Paulo-based property tech company has growth funding to prove it.

Andreessen Horowitz is doubling down on its first Brazil investment with Loft, a two-year-old real estate marketplace. The $175 million Series C was co-led by Vulcan Capital. 

In the U.S., sites like Opendoor give us visibility into how much your house or properties you’re interested in are worth. That transparency doesn’t exist in Latin America. 

Loft founder and co-CEO Mate Pencz describes the residential real estate market in Latin America as a $6 trillion opportunity. As it exists now, lack of data transparency around property listings results in low-quality listings, disproportionately high asking prices and prolonged selling times. This creates a painful experience for buyers, sellers and brokers. The market is locked up, but Loft thinks it can create transparency and liquidity with open data sets for property value. 

Loft has been supported by some pretty big Silicon Valley names since its genesis in 2018. Loft raised equity capital from angel investors such as Max Levchin of PayPal, Joe Lonsdale of Palantir, Opendoor founder Eric Wu, Mike Krieger of Instagram, David Vélez of Nubank and Josh Kushner of Thrive Capital, whom Pencz met during undergrad studies at Harvard. It helped that Loft was not Pencz’s first entrepreneurial rodeo — the founder started web-printing company Printi, which exited to Vistaprint in 2014 for a $25 million stake. 

Growth-stage funding will enable Loft to scale

Pencz says they’ve transacted on 1,000 properties in their key market of São Paulo, and plans to tackle new cities with the “Uber growth model” of replicating the same service in new cities, like Mexico City. Loft is currently operative in Brazil, and has big plans for Mexico in 2020. Penzc has poached the Latin American head of Uber Eats, Juan Pablo Ramos, to launch Loft’s services in Mexico City within the next two to four months. As Loft mobilizes in Mexico, this could mean trouble for Flat, an existing Opendoor clone in Mexico, which will now fight for market share against a heavily funded competitor. 

Loft’s São Paulo HQ

When it comes to marketing, Loft isn’t thinking about Facebook or SEO performance advertising. Pencz sees more value in physically integrating the Loft brand into the fabric of new neighborhoods through festival sponsorships and community events, while leveraging broker channels. “Partnering with brokers and being perceived as a positive brand with a high NPS are the two key pillars of Loft’s expansion strategy,” says Pencz. 

The founders began by physically measuring buildings and making estimates about how much houses and apartments were worth. The founders didn’t stop there — they envision the future of Loft as a one-stop shop with services like renovations, property financing for mortgages and insurance through banks. The company wants to completely upend real estate in Latin America, and those big ambitions have piqued investor interest. 

Andreessen Horowitz and Vulcan Capital co-led the Series C, with participation from QED Investors, Fifth Wall Ventures, Thrive Capital, Valor Capital and Monashees. What is a16z’s Latin America strategy?

Andreessen Horowitz general partner Alex Rampell notes that while Loft marked the firm’s entry into Brazil, the fund has been active in Latin America for a few years: a16z invested in Colombia’s delivery unicorn Rappi, Uruguayan restaurant management platform Meitre and Colombian point of sale lender ADDI. And, a16z joined in Loft’s $70 million Series B that closed in March 2019.

Rampell, who previously invested in Opendoor and sits on the board of TransferWise, says that a16z doesn’t really have an investment strategy when it comes to Latin America. Instead, the idea with Loft was that while the iBuyer Opendoor for transactional multiple listing services isn’t by any means a proprietary business model, it may work better in a country like Brazil — where buyers and sellers are slowed down by bureaucratic policies and lack of fair market value data — than in the U.S. To put it simply, Loft has better product market fit in Brazil than Opendoor does in the U.S. 

Loft hopes its customer-friendly Nubank-esque branding will win over new users 

Rampell references the U.S.’s Groupon and Korea’s Coupang for comparison. The Groupon model blew up in Asia as Coupang’s valuation reached $9 billion. Groupon rose fast and fell hard, and now its founders are on to their next entrepreneurial ventures

“There’s a lot of value in multiple listings services, and the opportunity might be better for a market like Brazil, especially if you back the right entrepreneurs — because that’s all that really matters in the end,” says Rampell. This new model that opened or pioneered at the iBuyer model is going to pop up all around the world. So VCs are figuring out the best pockets of the world for different business models, and finding the best entrepreneurs to lead these companies. The thesis for Loft’s growth funding is that Brazil is underserved on this particular macro trend. 

Loft monetizes through the sale of properties and ancillary products. Cuts from referral and partnership fees from banks or insurance companies will continue to help Loft monetize, in addition to the $275 million in capital it has raised during its two short years in existence. 

Pencz declined to comment on Loft’s valuation.

Latin America Roundup: XP’s chart-topping IPO, Wildlife becomes a unicorn, Softbank backs Konfio

December has been a strong month for Brazilian startups, bringing a big IPO and a new unicorn for local companies. Tech-driven investment firm XP Investimentos went public on the US Stock Exchange in mid-December raising $1.81B in the fourth-largest IPO of 2019. XP’s stock price jumped 30% on its first day of trading from $27 per share to $34.50. 

XP was founded in 2001 to provide brokerage training classes to Brazilians to help them invest in the international stock market. Today, it is a full-service brokerage firm, providing fund management and distribution to over 1.5 million customers in Brazil. 

Notably, XP has outlined a strategy for beating Brazilian banks, among the most profitable in the world, in its 354-page report to the SEC. Brazil’s banking market is highly concentrated, with the top five players dominating 93% of market share. This concentration has led to significant inefficiencies that XP tries to disrupt by offering a variety of financial products through an accessible online platform. 

The heavy bureaucracy of these banks will prevent them from innovating quickly enough to compete with newer institutions like XP, whose debt products are attractive to frustrated Brazilian customers. The inefficiency of the Brazilian financial system has opened opportunities for companies like XP, or neobank Nubank, to rapidly attract customers who are disgruntled with the traditional system. 

Gaming startup Wildlife becomes a unicorn

Brazil has seen a new unicorn emerge almost every month this year, and December was no exception. Gaming startup Wildlife raised a $60M Series A round led by US-investor Benchmark Capital at a $1.3B valuation to become the country’s eleventh unicorn. This round was big even for Silicon Valley standards, and it is uncommon for startups even in markets like the US or Europe to hit a $1B+ valuation in such an early round. 

Wildlife has created over 60 games since 2011, including Zooba and Tennis Clash, which have both reached global acclaim. Founded by brothers Victor and Arthur Lazarte, Wildlife operates on a freemium model that only charges users for in-app purchases. They plan to use the funding to double their employee base and grow to $2B in 2020, continuing the 80% yearly growth they have seen since 2011. 

Mexico’s lender Konfio receives $100M from Softbank

Konfio provides small business loans in Mexico through an online platform to help SMEs gain liquidity and grow their operations. These small businesses are often overlooked by banks in Mexico and Latin America who do not know how to price risk for businesses that process under $10M per year. 

Konfio recently raised $100M from Softbank’s Innovation Fund, the third investment that Softbank has made into Mexico since launching the fund. The capital will go toward financing working capital loans, as well as creating new products for Konfio’s customers. Today, Konfio’s loans average at around $12,000, while banks still struggle to loan under $40,000. The tech-driven platform allows Konfio to disburse loans within 24 hours without requiring collateral.

Small business lending is a tremendous opportunity in Latin America, where banks are among the most profitable and the least competitive in the world. Brazil’s Creditas and Colombia’s OmniBnk are among the other startups who are providing innovative products that calculate risk more effectively than banks in Latin America’s complex lending environment.

 

The Albo team has raised $26.4 million to scale its leading neobank.

Albo, Mexico’s leading neobank, raises $19M

In an extension of a Series A round, Mexico’s albo raised a further $19M from Valar Ventures to bring their newest round to $26.4M in total. Albo previously raised $7.4M from Mountain Nazca, Omidyar Network, and Greyhound Capital in January 2019. Albo’s mission is to provide banking services to unbanked and underbanked clients in Mexico. Over half of albo’s customers claim that albo was their first-ever bank account. 

Founded by Angel Sahagun in 2016, albo quickly became Mexico’s largest neobank, serving over 200,000 customers and sending out thousands of new cards every day. The investment from Valar Ventures, founded by Peter Thiel (also an investor in N26 and Transferwise), is a vote of confidence for this Mexican fintech. Albo has also previously received investment from Arkfund, Magma Partners, and Mexican angels. 

Albo plans to use the capital to develop new products, including savings and credit services, in the coming year. Mexico will likely be a battleground for Latin American neobanks in 2020, as Klar, Nubank, and potentially Argentina’s Uala, will begin to grow in the region’s second-largest market. While there is room for several competitive neobanks to thrive in Mexico, this industry will be one to watch in 2020.

News and Notes: Mercado Credito, Mimic, Rebel, and Rappi

Goldman Sachs loaned $125M to MercadoLibre to continue developing their credit product, MercadoCredito. MercadoLibre will use the capital to triple its $100M debt facility for small business loans in Mexico. To date, MercadoCredito has loaned over $610M to 270,000 businesses around the region in Mexico, Brazil, and Argentina. 

Brazilian cloud-kitchen startup Mimic raised $9M in a seed round led by Monashees to develop a more efficient food delivery model in Brazil. Mimic will exclusively manage the logistics of “dark kitchens,” which exist only for delivery and have no sit-down facilities, saving time and money for clients. Mimic will use the investment to grow its team.

An early-stage online lending startup in Brazil, Rebel, recently raised $10M from Monashees and Fintech Collective to provide unsecured loans to middle-class Brazilians at affordable rates. Rebel has lowered rates to around 2.9% per month, compared to 40-400% at Brazil’s largest banks. The startup uses a proprietary algorithm to calculate risk for clients and provide loans rapidly through its online platform. 

Colombia’s Rappi recently announced an expansion into Ecuador, where it has rapidly reached 100,000 users between Quito and Guayaquil, the country’s two largest cities. Rappi is now active in nine countries and over 50 cities in Latin America. 

2019: A Year in Review

Given the arrival of the Softbank Innovation Fund, Latin American startup investment in 2019 will likely more than double the $2B invested in 2018. Here are a few of the highlights we saw this year:

  1. Record-breaking rounds and Brazilian unicorns: In 2019, Rappi raised $1B from Softbank, beating iFood’s previous record-breaking $500M from Naspers in 2018. Brazil got at least six new unicorns – Nubank, QuintoAndar, Gympass, Wildlife, Loggi, and EBANX – most of whom raised funding from international investors. 
  2. Asian investment in Latin American fintechs: Nubank received $400M+ in 2019 from investors that included TCV, Tencent, Sequoia, Dragoneer, and Ribbit Capital. Argentina’s Uala received $150M from Softbank and Tencent in November 2019. Softbank has been investing in Brazilian and Mexican fintechs including Creditas, Konfio, and Clip, throughout the year. 
  3. US investors take an interest in LatAm: Many US investors made their first Latin American investments in 2019 including Valar Ventures (albo), Bezos Expeditions (NotCo), SixThirty Cyber (Kriptos), and Homebrew (Habi). This year has also seen large funds like a16z, Sequoia, Accel, and others making earlier stage investments in Latin America, rather than Series B and beyond. This change demonstrates that US funds are becoming more familiar and involved with the Latin American ecosystem, helping early-stage companies grow rather than focusing on international scale-ups as they have in the past.
  4. The Cornershop acquisition: Chilean-Mexican delivery startup, Cornershop, was acquired by Walmart in late 2018 for $225M, but the deal was blocked by the Mexican government. Four months after the block, Cornershop announced that Uber would take a 51% share of the company for $450M, representing a 4x growth in valuation since the previous acquisition deal. The Mexican and Chilean governments still have to approve the Uber deal, so all eyes will be on Cornershop through the start of 2020. 
  5. The start of the battle for Latin America’s super-app: In China, two companies dominate the mobile market, handling payments, communications, ridesharing, delivery, and more within a single app. Events in 2019, such as Rappi’s $1B round and the merger between Mexico’s Grin and Brazil’s Yellow, suggest that Latin America may be heading in the same direction toward a few apps that integrate dozens of features. Colombia’s Rappi and Brazil’s Movile are strong competitors for the role, but the rise of a regional super-app still remains far in the future for Latin America.

Latin America’s startup and investment ecosystem has likely more than doubled this year as compared to 2019. As international investors like Softbank, Andreesen Horowitz, Sequoia, Accel, Tencent, and others are taking more bets on the region, more startups than ever have scaled and reached unicorn status. These startups will continue to scale in 2020, taking on a regional presence to provide services to Latin America’s 650M population.

 

Latin America roundup: Neobanks raise $205M+; Softbank backs VTEX

Argentina’s Ualá became the most recent Latin American fintech to receive a growth-stage funding ($150 million) from Asian investors, Tencent and Softbank. 

This marks Tencent’s second round of investment in Ualá, the first coming in April 2019. Tencent also invested $180M in Brazil’s leading neobank, Nubank in 2018. With Ualá, Tencent and Softbank will join a team of investors including Soros, Goldman Sachs, Endeavor, Monashees, Ribbit Capital, and Jefferies LLC, who have backed Ualá since it was founded in 2016. Ualá has provided over 1.3M accounts for unbanked and under-banked Argentine customers in the past two years and recently launched new products for lending and savings. 

Ualá was not the only neobank celebrating a significant round this month; Brazil’s Neon raised a $94M Series B round from Banco Votorantim and General Atlantic just one week earlier. Neon offers a fully-digital bank card to almost 2M customers across Brazil, mostly concentrated in Rio de Janeiro and São Paulo. The round will enable Neon to expand beyond Brazil’s biggest cities and double its user base in 2020. 

Neon has raised $121M to date, with previous investors Quona Capital, Propel Venture Partners, Omidyar Network, and Monashees, also joining their most recent round. The two-year-old startup has been expanding its product offerings to include credit, investment, and most recently, a personal lending line in July 2019.

Neon’s products are helping to bring banking services to a famously complex and competitive market in Brazil. Brazil’s largest neobank, Nubank, is valued at $10B+, has 10M customers in Brazil and Mexico, and is now the most-downloaded neobank in the world. Brazil’s banking sector is one of the most lucrative in the world, with credit card interest rates reaching triple digits, whereas Nubank and competitors offer more US-style rates, putting Brazilian banks on the defensive against disruptors like Nubank and Neon who will drive competition. 

With strong funding from Asia, Brazilian, and US-based backers, these neobanks are gaining traction across the region to provide banking services to the 50% of Latin America’s population that is still excluded from traditional financial institutions. 

Softbank invests $140M in VTEX

VTEX, a Brazilian cloud e-commerce platform for large companies, joined the growing list of Softbank’s Brazilian portfolio companies, including QuintoAndar, MadeiraMadeira, Creditas, Buser, Gympass, and Loggi. The Japanese investor is supporting VTEX with a $140M investment to help the startup expand internationally and develop new products. 

VTEX already has 14 offices in Latin America, Europe, and the US, and serves over 2500 global clients including Ambev, Nestle, North Face, Coca Cola, and General Electric. VTEX’s solution involves a comprehensive digital commerce platform including order management, B2B marketplaces, web and in-store points of commerce, and customer service. As the back-end for some of the world’s largest companies, VTEX provides an enormous opportunity for integration with other marketplaces and platforms. 

LinkedIn expands to Mexico

Mexico is Latin America’s second-largest market after Brazil for many US tech companies like Uber and Facebook. In November 2019, both LinkedIn and Stripe announced their intention to expand into the Mexican market with offices and operations. Over 13 million of Linkedin’s 92 million total clients are in Mexico, making this country a logical place for Linkedin’s second Latin America office. Linkedin opened their first Latin America offices in São Paulo in 2013. 

The Mexican office will open in July 2020 and will help LinkedIn produce more Spanish-language content, as well as bring users closer to large clients like BBVA and Aeromexico. 

Notable Rounds and Acquisitions from November

  • Brazilian bank Itaú acquired growth-hacking and digital consulting startup, Zup, for a $140M deal that will be disbursed over four years. Zup will help the bank improve and develop digital channels for customer acquisition and management. Although Itaú now owns 51% of Zup, the two companies will continue to operate separately and under different brands for the foreseeable future. Acquisitions of this size are still very rare in Latin America and provide liquidity into the startup ecosystem that can promote the development of a more dynamic environment for tech companies. 
  • MUY Tech, a Colombia cloud kitchen startup, raised $15M this month to expand into Mexico and Brazil. MUY uses AI technology to predict food trends and create less waste, allowing users to order personalized meals from MUY’s physical restaurants or through a mobile app. The startup currently serves more than 200,000 meals per month, according to founder Jose Calderon, who previously exited Domicilios to Delivery Hero. Mexican investor ALLVP led the round with support from previous investor Seeya.
  • Brazilian mobility startup Kovi raised a $30M Series B led by Global Founders Capital and Quona Capital, with support from previous investors Monashees, Maya Capital, Kevin Efrusy, Y Combinator, Broadhaven Ventures, Justin Mateen, and ONEVC. Kovi rents cars to drivers that work for rideshare companies like Uber, Didi, or Cabify to make quality vehicles available to these potential gig-economy workers. They will use this investment to grow the team and fleet, as well as exploring new geographies. 
  • Mexico’s virtual supermarket, Justo, raised $10M in a seed round from Foundation Capital to continue growing in the local market. Justo is the first grocery store in Mexico with no physical branches, using a D2C model that has been increasing in popularity in Latin America. The startup was founded by Ricardo Weder, the former president of Cabify, earlier in 2019 to disrupt the wasteful grocery industry. 
  • Brazil’s identity verification startup, idwall, raised $10M from Qualcomm Ventures to continue developing facial recognition software that helps large companies like Loggi, 99, and OLX to verify the identity of their employees and customers.

Looking ahead to December, Latin American financial institutions are on the lookout for a shaky future based on the recent unrest in countries like Chile, Bolivia, Ecuador, and Colombia. This instability might provide a competitive edge for fintech startups who can use real-time data to adapt more quickly to the changing situation. 

What to watch next? International investors have not pulled out of the region despite recent political turmoil and many are willing to wait out this period to support their startups. While we may not have access to Q4 2019 for a few months, it will be interesting to see if growth and investment have been rocked by the changes of the past two months. Certainly the status quo for the traditional players in Latin America is rapidly changing, potentially leaving room for startups to take over more market share and compete for disgruntled customers.

Argentine fintech Ualá raises $150M led by Tencent and SoftBank

Ualá, an Argentine personal finance management app, has raised a $150 million Series C led by Tencent and SoftBank’s Latin America-focused Innovation Fund.

Ualá is a mobile banking app and lending platform with services similar to Revolut, Monzo and Nubank. However Ualá has no intention of actually becoming a bank itself. 

Founder and CEO Pierpaolo Barbieri, a Buenos Aires native and Harvard University graduate, says his ambition was to create a platform that would bring all financial services into one app linked to one card. As it exists now, Ualá is linked to a prepaid, global Mastercard and allows users to transfer money, invest in mutual funds, request loans, pay bills and top-up prepaid services. 

Although SoftBank has rapidly deployed its Latin America-focused Innovation Fund (most recently with a $140 million investment in VTEX, a Brazilian e-commerce platform used by Walmart), Ualá’s Series C marks SoftBank’s entry into Argentina. While Argentina is well known developer talent and high entrepreneurial spirit, the country has remained under-capitalized.  

Argentina is in the midst of a presidential leadership shift, as well as a $330 billion debt uncertainty. However personal mobile banking services like Ualá that promote a financial system that is more open, inclusive and competitive, are resonating with both the market and investors.

Barbieri doesn’t have his sights set on expanding Ualá into any other Spanish-language countries at this time. Ualá has 1.3 million issued cards in a market of 45 million people – so there’s still a lot more work to be done in Argentina alone.

Buenos Aires-based Ualá closes a $150 million Series C

What exactly does Tencent gain by partnering with these country-specific fintechs? The Shenzhen-based internet giant and WeChat parent company wrote the playbook on mobile payments and has strategically invested in other Latin America fintechs like Nubank. Tencent clearly wants a granular understanding of the Latin America consumer spending behavior and market – and has the capital in the form of large and consistent checks to back it up.

While it’s unclear if there are any WeChat/Ualá collaborations on the product roadmap, Barbeiri explains that working with Tencent will help them learn how to create a product that drives daily engagement.

When it comes to capital deployment, Barbieri tells me that the money will be used to triple the company in size, hiring about 400 people between operations and technical roles. The new capital will be used to scale the teams that touch partnerships and business development, too. Ualá has existing partnerships with tech companies like Netflix, Rappi and Spotify, and intends to strengthen and expand similar deals over time. 

The fintech launched in October 2017, and last raised $34 million in 2018 led by Goldman Sach’s venture unit, along with Ribbit Capital and Monashees. Tencent also invested an undisclosed amount earlier this year in March. The most recent round brings Ualá’s total funding to $194 million. Barbieri declined to comment or benchmark Ualá’s valuation. 

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Muy raises $15M to grow its new cloud kitchen concept

The cloud kitchen craze has reached Latin America. Food tech startup called Muy landed a fresh $15 million Series B to expand into Mexico and soon Brazil. The service is currently operative in Colombia. 

Muy is a “cloud kitchen meets Chipotle,” says one investor. The company describes itself as a virtual kitchen and smart chef system that uses AI to produce food based on forecasts of demand, which can help to reduce food waste. Muy, translated from Spanish to English as “very,” allows users to place personalized orders in one of Muy’s physical restaurants or through a mobile app. Muy’s concept also exists as 20 physical dining locations offering what it says are quick, fresh and personalized dishes. Founder Jose Calderon says Muy is serving more than 200,000 dishes per month. 

The round was led by Mexico-based investor ALLVP, with previous investor Seaya returning. The $15 million Series B brings MUY’s total funding to $20.5 million.

Calderon is no newcomer to the takeaway experience space. He previously raised $47.7 million for a Colombian online food ordering startup called Domicilios, which he exited to Delivery Hero

The explosion of delivery apps has kept options competitive for customers not only in the U.S. but across Latin America. The congested highways of São Paulo, Mexico City, Bogotá and beyond are filled with motor couriers running deliveries with Rappi, UberEATS and the like.  

Calderon notes that cloud kitchens are poised to make on demand ordering and delivery more efficient in these high-density cities due to the long commute times that keep the growing middle class out of their homes for extended periods of 12 hours or more.  

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A MUY customer orders at one of the company’s physical locations in Colombia.

Alternatives like full service restaurants can be prohibitively expensive and time consuming, and traditional casual restaurants don’t meet quality standards. A large part of the market, around 40%, brings a lunch to work, says Calderon. But as disposable income increases, he predicts that more people will avoid cooking at home and will opt for faster and higher-quality options like Muy.

Cloud kitchens – the fully equipped, shared, commercial grade spaces for restaurant owners – have left U.S. investors balking. Journalists have described these virtual spaces as “ghost kitchens” and many have noted the threat they pose to independently owned restaurants. My colleague Danny Crichton wrote that “cloud kitchens are the WeWork for restaurant kitchens,” adding that suddenly sharable kitchen space will lead to bidding wars between these virtual food brands.  

This rhetoric isn’t hindering the rise of cloud kitchens and the services that support them from launching in the U.S. and down to Latin America. According to Calderon, the food service market opportunity in Latin America will reach $270 billion by 2021.

The founder also notes that the Latin America market is highly fragmented; the top 10 chains only hold around 5% of market share in comparison to countries like the U.S. where this figure reaches 24%. “Large players will consolidate and win, and small ones will face pressure,” he says. 

Larger incumbents have already begun to dip into the cloud kitchen opportunity. Earlier this year, Amazon took a $575 million bite into Deliveroo, which opened up its first shared kitchen in Paris in 2018. City Storage Systems, the holding company of CloudKitchens, was backed with a $150 million controlling stake from Uber founder and ex-CEO Travis Kalanick. 

For better or worse, delivery apps and cloud kitchens are revolutionizing the way we eat in the U.S., Asia and now in Latin America. The winners among the various global delivery apps, cloud kitchens and controlling incumbents have yet to emerge, but what we do know is that everyone needs to eat lunch.

Latin America roundup: SoftBank bets on Brazilian unicorns and Konfio raises $250M for lending plans

SoftBank did not let up the flow of capital to Brazil this month, staying busy despite the WeWork debacle. With two more $100 million-plus rounds in QuintoAndar and MadeiraMadeira, the Japanese investor has funded at least one more unicorn in the Brazilian ecosystem. Their investments in Brazil from the past two months alone far outstrip Latin America’s venture capital funding in all of 2016.

In early September, SoftBank backed QuintoAndar for a $250 million Series D round alongside Dragoneer, General Atlantic and Kaszek Ventures, which recently made headlines for raising $600 million to invest in Latin America. QuintoAndar is a real estate rental startup that simplifies the process of locating and renting an apartment in Brazil. Although the startup only has 2% of the rentals market share in Brazil, QuintoAndar’s tech solution enabled them to scale rapidly, beating out traditional incumbents in the region’s bureaucratic rental structure.

QuintoAndar’s founders ideated the business model while they were struggling to find an apartment in São Paulo after finishing their MBAs at Stanford. They have seen property rentals grow 5x on their platform since raising a $70 million Series C just nine months ago.

SoftBank stayed bullish in Brazil with a $110 million investment in home goods marketplace Madeira Madeira, which has been described as the “Wayfair of Brazil.” This drop-shipping business has grown to sell thousands of products online with a relatively capital-light model that connects buyers directly with warehouses, saving on overhead costs. The SoftBank investment dwarfs all of Madeira Madeira’s previous capital raised — $38.8 million — by almost a factor of three.

Madeira Madeira plans to use the capital to expand across Latin America, as well as improve logistics and customer service.

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David Arana, Konfio founder and CEO

Mexico’s Konfio receives $250 million credit line from Goldman Sachs, Victory Park Capital

Konfio provides unsecured loans to small and medium businesses in Mexico that are currently underserved by the traditional banking sector. Goldman Sachs contributed up to $100 million in secured credit to Konfio to allow them to make up to $250 million in loans to 25,000 companies over the next 12 months. Victory Park Capital also contributed to this debt round, bringing Konfio’s total raised to $43 million in equity and $260 million in debt.

This capital mints Konfio as one of the largest fintech startups in the region. It will also allow them to take on larger loan sizes. Konfio’s average loan size hovers around $20,000. Konfio uses credit ratings to calculate risk and disburse loans within 24 hours, and at half the rate of a traditional bank loan.

To date Konfio has served over 1 million clients in what is currently a $100 billion market in Mexico. Mexico’s access to credit is still significantly lower than the rest of Latin America, so Konfio is well-placed to grow within this market, especially with this new funding.

Klar, Mexico’s newest challenger bank, raises $57.5 million from U.S. investors

Mexican challenger bank Klar, a Chime clone, recently raised over $57.5 million in debt and equity in one of Mexico’s largest seed rounds. The $50 million credit line came from San Francisco’s Arc Labs, while Quona Capital led the $7.5 million equity round with support from Santander InnoVentures, aCrew Capital, FJ Labs and Western Technology Investment.

Klar was founded less than 10 months ago to help Mexicans access free and fair financial services through digital banking. Currently Klar offers a debit and a credit product with transparent fees; today, only 15% of Mexicans have access to credit cards, most of which have +60% interest rates and a lot of hidden fees. Klar wants to make banking accessible for everyone in Mexico through their free digital platform.

This startup will be one to watch over the coming months as it competes with Nubank and other local neobanks to bank Mexico’s unbanked.

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U.S. and Mexican investors back Flat, an Opendoor clone in Mexico

Mexican property-tech startup Flat is taking the Opendoor model to Latin America. This startup raised an unprecedented $4.6 million in their pre-seed round led by ALL VP, with support from Liquid2 Ventures, Next Billion, Picus Capital and angels.

Besides Mexican e-scooter giant, Grin, Flat’s pre-seed is the largest ever for Mexico. Flat’s founders, Victor Noguera and Bernardo Cordero, are betting on a $25 billion home sales market in Mexico that is currently stuck in the 20th century. Flat will allow homeowners and buyers to gain access to accurate information about home prices (think Zillow in the U.S.), as well as managing the slow process of notarizing the purchase after the fact. With Flat, the startup manages everything from valuation to ownership transfer, all through their platform, and within 72 hours of purchase.

Flat will use this investment to vertically integrate within the Mexican market, rather than expanding across Latin America.

News and notes: Mexican fintechs in focus, more VC funds opening in LatAm

  • Other deals in September included Mutuo Financiera’s $100 million credit facility granted by Crayhill Capital Management, a New York-based alternative asset management firm, at the beginning of the month. Mutuo Financiera is a vehicle fleet leasing company that focuses on clean energy transportation. The investment will help the startup acquire new compressed natural gas vehicles to serve increased demand in Mexico for clean transportation alternatives.
  • Brazilian growth-stage VC fund Base Partners closed a further $135 million to invest in scaling Latin American startups. The fund, founded by Fernando Spnola and Arthur Mizne and backed by over 43 limited partners, has previously invested in companies like ByteDance and Stripe, recently crowned the U.S.’ third most valuable startup. Base Partners will now compete against investment giants like Kaszek and SoftBank to participate in Latin America’s top expansion stage deals.
  • Mexico’s Credijusto, which offers asset-backed loans and equipment leases to SMEs, raised their Series B this month, topping $42 million led by Goldman Sachs and Point72 Ventures. Credijusto has processed more than $90 million in loans since they were founded in 2015 and closed a $100 million credit agreement with Goldman Sachs just months before this round.
  • Looking ahead to October, SoftBank is said to be evaluating several investments in Brazil and will likely continue deploying capital rapidly in Latin America’s largest market. We may see a few more unicorns in Brazil before the year is out. It is also likely that the Innovation Fund will make its way out of Brazil to other big markets like Colombia or Mexico, where SoftBank has invested in the past.
  • Accion Venture Lab launched a social impact fund and Ewa Capital began raising capital for a female-focused fund in September, so hopefully investment in female founders and inclusive tech will rise in coming months.
  • Mexico’s Square clone, Billpocket, also recently announced an undisclosed round from Axon Capital Partners. Billpocket has been accelerating e-payments in Mexico at a triple-digit pace since it started, carving out a name for itself in a competitive space where incumbent Clip has already received funding from SoftBank.

SoftBank mints QuintoAndar a new unicorn in Latin American real estate tech

QuintoAndar, the Brazilian real estate technology developer, has secured a massive $250 million Series D led by SoftBank, as the Japanese conglomerate continues to deploy its $5 billion commitment to the Latin American region. The round is the latest sign that startups in Latin America can get money if they’re developing technologies in specific areas that are massive painpoints for the geography’s nascent middle class.

QuintoAndar invented a marketplace that lets users search, book, rent and advertise rental properties in Brazil. The site manages listings and visits, transaction processing between tenants and landlords, and houses the digital contracts that bind these agreements together. QuintoAndar also developed a credit analysis system that negates the need for co-signers, deposits and rental insurance – barriers that have historically blocked deal flow in this industry.

Co-founder and CEO Gabriel Braga says QuintoAndar has now entered unicorn territory thanks to the SoftBank-led round. Dragoneer also participated, as well as return investors General Atlantic and Kaszek (which recently announced a fresh $600 million fund of its own). 

QuintoAndar, which literally translates from Portuguese to English as “fifth floor,” is an example of a Brazilian startup solving Brazilian problems. Those seeking long-term rentals in big cities like São Paulo and Rio de Janeiro are throttled by bureaucratic policies that enforce expensive deposits, co-signer requirements and skyscraper-high insurance fees. On the supply side, amateur landlords are tunnel visioned on making money from transactions, creating a terrible customer service experience for tenants, along with wasted hours of apartment hunting. QuintoAndar is billing itself as a modernized fix that lets users search, book, rent and advertise rental properties in Brazil. 

The startup, which has grown into a 1,000 person São Paulo-based operation has now amassed a total of $345 million to date, including a $64 million Series C led by General Atlantic that closed just nine months ago. Braga declined to confirm the exact valuation of QuintoAndar, but says that it has crossed the threshold of billion dollar status. The company was founded in 2013. 

Why is this long term rentals startup accumulating so much capital? Brazilians are seeing home ownership as less of a long-term goal and are opting to rent, meaning more money in the bank and freedom to relocate. This, the founder believes, creates a big opportunity to make renting more efficient in a country where 62% of Brazilians are aged 29 or under, according to this review. Brazil’s population of 211,000,000 people has proven a hungry enough market for a startup like QuintoAndar to turn profitable, and to attract foreign investors like SoftBank. Co-founders André Penha and Braga were able to leverage these massive foreign investment checks to create a specific product to help generate liquidity for users in its home market. 

Braga says the company doesn’t measure success by volume of users or its newly minted unicorn status, but by number of property visits carried out on QuintoAndar. The company is projecting over 2 million visits scheduled through its platform in 2019, and is seeing 4,500 contracts signed per month. The CEO attributes QuintoAndar’s popularity to its ease of use, and the fact that the renting service is generating liquidity for brokers and sellers in the Brazilian long term rentals market. 

With the new funding, Braga intends to strengthen QuintoAndar’s userbase by acquiring new customers in more cities across Brazil. The company also intends to attract new talent and build out broker partnerships. In the long term, QuintoAndar envisions launching more financial products for its customers, and eventually using its suite of data to make recommendations for services like home renovations. 

QuintoAndar now joins Nubank, Loggi, Gympass and Stone in the growing club of billion dollar Brazilian tech companies, but its founder is more interested in keeping the momentum going than celebrating entrance into the Latin American unicorn club. “I’m more focused on the long term mission that we have, and not overly excited about being a unicorn. Tomorrow’s another day, we have to keep working,” says Braga. 

Flat, a Mexican property tech startup, raises $4.6M pre-seed led by ALLVP

Flat has raised one of Mexico’s largest pre-seed rounds to take the Opendoor real estate marketplace model across the Rio Grande. 

The company snagged a $4.5 million pre-seed round to expand its business helping homeowners quickly sell their properties in Mexico. The round was led by ALLVP, an active early-stage fund in Mexico. California-based Liquid 2 Ventures (for which Hall of Fame quarterback Joe Montana is a GP), NextBillion and a few angels supported the round, as well. 

At the time of writing, Flat’s raise is the largest pre-seed funding round for a Mexican startup aside from the scooter company, Grin, which was backed by Y Combinator and later went on to raise a $45 million Series A and consolidate with Brazil’s bike-sharing startup, Yellow. 

While this ‘i-buying’ business model was initially pioneered by Opendoor in the U.S., the same need to efficiently sell property exists for consumers in other growing markets around the world. That’s why co-founders Victor Noguera and Bernardo Cordero founded Flat. 

Bucking a trend that has seen many new Latin American founders hailing from Stanford University, Cordero and Noguera met at the University of California, Berkeley — just across the bay.

The founders estimate the total value of the 40 million homes in Mexico to be a $1.6 trillion total addressable market. They equate the value of homes sold per year to $25 billion. Let’s not forget the elephant in the room — SoftBank is undoubtedly eyeing Mexico with its $5 billion LatAm commitment. 

Flat says it’s solving a few problems in the local home-buying market in Mexico. Firstly, anyone interested in selling their property lacks information about how much their home is actually worth. In the U.S., sellers can reference Zillow — but no such centralized database of real estate pricing information for the market of Mexico exists. 

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Then there’s the operational piece of transferring ownership of the property, which Flat says can take up to eight months and is a notarized process — making the overall experience incredibly illiquid. 

Flat’s actual product is a marketplace focused on helping the seller sell quickly. Flat visits your home, takes measurements, documents how many bathrooms and bedrooms exist in the property and determines how much your home is worth. From there, they manage renovations and transfer ownership of the property. The seller is paid within 72 hours. 

International expansion has been difficult for many startups operating in Latin America as every country has its own regulatory barriers. That’s why when it comes to growth, Flat says it’s more focused on growing out their product within other verticals of property management to only serve a Mexican market, rather than expand to other Spanish-language countries in the LatAm region.