Fintech in Latin America continues to draw big dollars as Softbank invests $231 million in Creditas

As investors continue to move more aggressively into Latin America’s startup scene, there’s one industry that seems to be drawing more attention than any others — financial services.

As wealth across the region continues to rise, access to adequate financial services — specifically debt — has become a pain-point for an upwardly mobile middle class that wants to be more entrepreneurial and have more financial tools than straight cash at their disposal.

That’s what’s driven companies like Nubank, the Brazilian consumer credit card behemoth, to valuations of roughly $4 billion; and it’s also what contributed to Creditas, a provider of secured loans, raking in $231 million in new financing from the SoftBank Vision Fund and SoftBank Group. Previous investors Vostok Emerging Finance, Santander InnoVentures and Amadeus Capital also participated in the round. 

Founded by Sergio Furio in 2012, the company started as an originator of loans to Brazilian customers who were willing to offer up collateral in exchange for lower interest rates on their debt. Back in 2017, the company became more of a fully integrated lender for the entire process.

Thanks to investments from local and international investment firms including Kaszek Ventures, Quona’s Accion Frontier Fund, Redpoint eVentures, QED Investors, Naspers Fintech, International Finance Corporation and Endeavor’s Catalyst fund, the company became one of Brazil’s largest new financial services startups.

Expect the company to use the new cash to expand its product portfolio and try to offer new lines of credit that it would issue itself — perhaps by trying to enter new businesses like unsecured consumer lending and credit cards.

If it does make its way into unsecured side of the lending market, that would put the company squarely in competition with Nubank (which was reportedly in discussions with Creditas’ lead investor, SoftBank, about an investment earlier this year).

“At Creditas we relentlessly focus on creating an amazing experience that provides efficiency and lower prices to democratize the access to low-cost lending in Brazil. With these investments, we plan to accelerate this process and expand our business model in order to improve the lives of the Brazilian population,” said Sergio Furio, Founder and CEO of Creditas, in a statement.

As a result of the investment, representatives from the SoftBank Vision Fund and SoftBank Latin America Fund will join Creditas’ Board of Directors.

Uber CTO says competing with Didi is ‘very healthy’ despite their complicated relationship

Competing with a company that counts you as an investor is hardly conventional — some might call it strange — but for Uber it’s a situation that is not only normal but essential.

That’s according to the ride-hailing giant’s CTO, Thuan Pham, who talked about the complicated rivalry Uber has with China’s Didi Chuxing, which counts each other as investors. Uber famously exited China in 2016 — it has since left Southeast Asia and merged with a rival in Russia, too — and part of that deal saw it take nearly six percent of the Chinese company’s business while Didi got equity in Uber. Yet, years later, the two compete in the growing Latin America market, where Didi is making aggressive moves, and also in Australia.

“If you don’t have competition then you can become complacent because there’s no competition to challenge,” Pham said during an interview at the Rise conference in Hong Kong today. “This competition is definitely a very healthy thing, it’s very very necessary.”

When competing in China, “both of the companies had to be on our best in order to compete,” Pham said, and he maintains that iron continues to sharpen iron on the other side of the planet.

“Even after we exited [China] we ran into them in other markets as well,” he added. “Our philosophy [is that] if they are doing something better in terms of features, we try harder to close the gap and surpass them. In the areas where our services are better, we try not to rest on our laurels because we see them trying to catch up all the time.”

Pham didn’t address the fact that Uber owns pieces of its rivals directly — and thus it burns money competing with them — but he did allude to that fact that the battle in some markets may make or break ride-hailing services.

“The best few companies will ultimately get to stay around and the lesser companies will get absorbed,” he said.

uber 2

HONG KONG , Hong Kong – 9 July 2019; Thuan Pham, CTO, Uber, left, with Shelly Banjo, Asia Tech Reporter, Bloomberg, on Centre Stage during day one of RISE 2019 at the Hong Kong Convention and Exhibition Centre in Hong Kong. (Photo By Stephen McCarthy/Sportsfile via Getty Images)

Uber’s relationship with its competition is very tangled. It owns stakes in Didi and Grab and its M&A activity included buying Careem in the Middle East for $3.1 billion. Didi, meanwhile, spent $1 billion to acquire Brazil’s 99 to kickstart its Latin America business — Uber is said to have bid for 99 unsuccessfully. Didi is also a prolific investor and it owns stakes in Ola, Grab, Careem and Bolt, each of which competes with Uber… which counts Didi as a shareholder.

An added wrinkle to the global rivalry is that investors such as SoftBank, its Vision Fund and Coatue own stakes in multiple ride-hailing services.

Despite a trio of global retreats which suggest that Uber’s one-size-fits-all approach to international markets struggles against localized plays, Pham maintained that Uber’s approach is still to “build globally.”

That may be up for debate, but those retreats do give the company interesting options for the future. Already, Uber has made billions on paper from the stakes it owns in markets where it exited. The big question is whether, in the long term, it’ll cash out of those deals and realized profits or look at M&A opportunities to re-enter those regions. It’s certainly a unique situation.

PayU, Naspers’ global fintech firm, enters Southeast Asia with acquisition of Red Dot Payment

PayU, the Naspers owned fintech firm that specializes in emerging markets, is broadening its global reach into Southeast Asia after it announced a deal to buy a majority stake in Singapore-based Red Dot Payment.

Naspers is best known for its payments and fintech business in markets like India, Latin America, Africa and Eastern Europe, but now it will enter Southeast Asia, a market with over 600 million consumers and rapidly rising internet access.

PayU plans to tap that potential through Red Dot, an eight-year-old startup founded by finance veterans which offers services that include a payment gateway, e-commerce storefronts and online invoicing across Southeast Asia. PayU said it has acquired “a majority stake” in the business. It did not specify the exact size but it did disclose that the deal values Red Dot at $65 million.

It isn’t clear exactly how much Red Dot had raised from investors overall — its Series B was $5.2 million but the value of prior rounds were not disclosed — but its backers include Japan’s GMO, Wavemaker, Skype co-founder Toivo Annus and MDI Ventures. The company said that that “the majority” of its investors exited through this transaction, but some stakeholders — including CEO Randy Tan — are keeping shares with a view to a later buyout in full.

That’s important for PayU, according to CEO Laurent le Moal, who stressed that the company believes in retaining teams and empowering them through acquisitions, rather than simply buying an asset.

“We have to strike the balance between a solid majority [acquisition] and an opportunity” for founders, he told TechCrunch in an interview.

PayU plans to put “real investment” into the startup, whilst also integrating its services into its ‘Hub’ of services and tech, a stack that is shared with its mesh of global business and was built from its acquisition of Israel’s Zooz. PayU’s India business alone is estimated to be worth $2.5 billion, but its overall business is hard to value but more details emerge of its global business as Naspers lists select entities through an IPO in Europe.

Back to the deal, Tan called it “a marriage made in heaven,” and he also revealed that Red Dot had turned down recent investment and acquisition offers from three other suitors.

“They [PayU] operate globally and have over 300,000 merchants, including Facebook, Google and the kind of clients we aspire to win,” he said.

So why Southeast Asia, and why now?

“We want to build the number one payments company for high growth markets,” le Moal said. “If you look at what the top 10 economies will be in 2030, half are in Southeast Asia and the rest are growth markets we are already in

“We are number one in India, in the biggest markets in Africa, the fastest-growing part of Europe and Latin America, but we have no presence in Southeast Asia,” he continued. “It’s fundamental… you want to go where the consumer growth is.”

The initial focus post-deal is to supercharge the Red Dot business through shared tech, networks and expertise, but, further down the line, de Moal has a vision of going deeper into fintech and financial services to offer products such as consumer credit, as it has done in India.

Such a product launch isn’t likely to happen for another 12 months at least, the PayU CEO said. Before then, there will be a focus on growing Red Dot’s cross-border trade business and developing synergy with its business in other markets, especially India.

Laurent Le Moal 2017

PayU CEO Laurent Le Moal said the company is looking to dominate high-growth markets in Southeast Asia following its acquisition of Red Dot Payment

De Moal hinted also that PayU has ambitions to be in Japan and Korea, although he conceded that the exact strategy — which could include organic growth — is still to be defined. We can certainly expect to see an uptick from the company in Southeast Asia and the wider Asian continent.

“There will be an acceleration of investment and M&A,” de Moal said. “It’s just the beginning for us as PayU and Naspers in the region.”

From seed to Series A: Scaling a startup in Latin America today

It’s not easy to raise growth-stage capital in Latin America, but it’s getting easier. As startups begin to flourish in the region’s largest markets, available funding is evolving to suit the needs of these maturing companies. However, Silicon Valley-style Series A rounds in Latin America are still rare, especially outside of Brazil and Mexico.

Even in Silicon Valley, only a small percentage of startups can bring together enough pieces to raise a Series A round. Jacob Mullins, a partner at Shasta Ventures, recently published an article on Medium on what it takes to raise a Series A round in San Francisco today, which inspired my take for the Latin American ecosystem.

In the piece, he lays out the table stakes for any startup looking to raise Series A capital, including product-market fit, a strong revenue model, 2x or 3x YOY growth, a data-driven go-to-market strategy, a compelling market opportunity, a great team and a great story. These prerequisites apply to startups anywhere in the world. However, if these requirements are the minimum needed for a Series A in San Francisco, startups outside of the Valley, including in Latin America, will have to work even harder.

Latin America’s exceptional growth in VC funding over the past 12 months speaks to the growing number of later-stage rounds startups are raising across the region. 2018 was Latin America’s inflection point for startups, with four big trends:

Record-breaking rounds: Mexico’s Grin Scooters raised Latin America’s largest seed round, and Brazilian bike and scooter-sharing startup Yellow raised Latin America’s largest Series A round to date (then they merged!). Food delivery startup Rappi became Colombia’s first unicorn, raising $200 million (and then $1 billion from SoftBank shortly thereafter), and Brazil’s iFood also raised $400 million, one of Latin America’s biggest rounds ever.

A closer examination reveals patterns in what it takes to raise scale capital in the Latin American market today.

Soaring Asian investment: Brazil’s most popular ride-hailing app, 99, was acquired by Didi Chuxing, China’s version of Uber . Tencent invested in Brazilian fintech Nubank; Ant Financial invested in Brazilian POS company StoneCo; SoftBank invested in Brazil’s logistics provider Loggi, Brazil’s Gympass and Colombia’s largest hotel chain, Ayenda Rooms. SoftBank also committed a $5 billion fund for Latin America, outstripping all previous funds by an order of magnitude.

Exits to Latin American and U.S. corporates: Chilean-Mexican grocery delivery startup Cornershop went to Walmart for $225 million and e-commerce company Linio was acquired by Falabella for $138 million. These deals reveal a growing concern from large companies in Latin America about competition from startups.

More YC grads: Latin America sent at least 10 startups to the Y Combinator, and many more to other international accelerators, in the past year. These companies include Grin, Higia, Truora, Keynua, The Podcast App, SkyDrop, UBits, Cuenca, BrainHi, Pachama, Calii, Cuanto, Pronto and Fintual.

2018 really was a breakout year for Latin American startups.

So who is raising Series A rounds in the region?

Within the list of 30 or so companies that have managed to raise a Series A in Latin America in the past year, most of the startups fit into a few categories. There is also significant overlap between the investors who are pursuing tickets of this size, most of whom are located in major markets like Mexico and Brazil, or have offices in Silicon Valley. A closer examination of these startups reveals patterns in what it takes to raise scale capital in the Latin American market today.

Copycats

Copycats — or startups that copy a successful business model from another market — are a good business in Latin America. Among those to raise Series A rounds within the past year were:

  • Grin and Yellow (now Grow Mobility): Bird/Lime clones raised $150 million as Grow Mobility from GGV Capital and Monashees.

  • LentesPlus: 1-800-Contacts clone raised $5 million from Palm Drive Capital, with participation from IGNIA and InQLab.

  • Mercadoni: Instacart clone raised $9 million from Movile.

  • Uala and Albo: Monzo/Revolut clones raised $10 million from Soros, Greyhound Capital, Recharge Capital and Point 72 Ventures, and $7.4 million from Omidyar, Greyhound and Mountain Nazca, respectively.

International investors often see copycat models as less risky, because the model has been tested before.

Logistics and last-mile delivery

Brazil’s CargoX, the “Uber for trucks,” is leading the market for logistics solutions in Latin America, receiving international investment from Valor Capital and NXTP Labs starting in their first round. They have also received funding from Soros, Goldman Sachs and Blackstone in later rounds. Recently, logistics startups like Colombia’s Liftit and Mexico’s Skydrop have raised multimillion-dollar rounds from Silicon Valley investors, including IFC, Monashees, MercadoLibre Fund, Variv Capital, Sierra Ventures and Sinai Ventures . Startups like Rappi, Loggi and Mandaê have also raised Series A rounds, and beyond.

Brazilian startups

In many ways, the Brazilian market operates separately from the rest of Latin America, and not only because of the language difference. Brazil has Brazil-centric funds and its startups follow their own rules, because the market is big enough to accommodate companies that only operate locally. Brazil also receives a majority of international VC funding and has produced a significant portion of Latin America’s unicorns.

Brazilian (and some Mexican) startups in edtech, healthtech and fintech, including Neon, Sanar, Mosyle, UnoDosTres and Nexoos, raised Series A rounds in 2018. Key investors included Quona Capital, e.Bricks Ventures, Elephant and Peak Ventures. Brazilian startups tend to scale more quickly at all sizes; Creditas and Loggi were able to raise their Series A in 2016 and 2014 respectively. In 2018, they were already raising $55 million at Series C and $100 million+ Series D from investors such as Vostok Emerging Capital, Kaszek Ventures, IFC, Naspers and SoftBank. However, startups in these industries in other Latin American countries might not find it as easy to raise larger rounds.

How much to raise in a Latin American Series A

Latin American valuations are noticeably lower than their Silicon Valley equivalents. A Series A round in a small or medium Latin American market like Chile or Colombia might end up looking a lot like a San Francisco seed round. Valuations and amount are bifurcated: those that have access to Silicon Valley-style capital can get higher valuations and bigger checks (still lower and smaller than the U.S.), while those that don’t have access have lower valuations.

The startup’s team, story and revenue model should all align to create an unbeatable business.

Outside of Brazil or Mexico, startups should not expect to raise more than $5 million in a Series A, even if they are receiving co-investments from the U.S. The average Series A round in the U.S. hit $11.29 million in 2018; however, the top 10% of deals averaged more than $60 million.

In Latin America, a Series A could range from as little as $1 million to around $10 million in most countries. Brazil and Mexico might break the mold, but startups looking for growth capital in Latin America should not expect to raise more than $5 million if they are not in a massive market. For example, Chile’s Destacame raised $3 million in their Series A from Chilean funds in early 2019. By comparison, Brazil’s Neon raised $22 million in their Series A in the same year. While these are different industries and comparing apples to oranges, the orders of magnitude seem right.

If we compare in the same industry but different years, the results are similar. Nubank’s Series A in 2014, led by Sequoia Capital, was $14.3 million. Neobanks in smaller markets, like albo and Uala, raised $7.4 million and $10 million, respectively, in their Series A rounds.

To date, the largest Series A raised in the region went to Yellow, Brazil’s bike-share and e-scooter company, created by the founders of 99, Ariel Lambrecht, Eduardo Musa, and Renato Freitas. Yellow raised a $63 million Series A within a year after launch, then merged with Mexico’s Grin Scooters.

Where to look for investment: Latin America or USA?

There are still very few entirely Latin American funds investing at Series A. Most of the time, Latin American startups must look to Mexico and Brazil, or beyond the region to Asia and the U.S., to fund rounds beyond the seed stage.

Within Latin America, some of the actors in this investment sector include Brazil’s Monashees and Valor Capital, Argentina’s Kaszek Ventures, Peru and Mexico’s Angel Ventures and Mexico’s ALLVP, MITA Ventures and Ignia. Startups might also find Series A-level investment from major regional tech leaders who are scouting acquisition opportunities, like Movile’s investment in Mercadoni. Movile is Brazil’s leader in mobile technology, with a mission to impact one billion people, following in the footsteps of China’s giant conglomerate, Tencent. Movile has invested in and acquired many Latin American startups to increase their mobile offerings for its customers.

While some funds in Latin America participate in investments of this scale, most Latin American startups target at least a part of their Series A rounds from outside the region. Latin American startups have been able to reach U.S. VCs in one of three ways: through top-tier accelerators, by selling to consumers in the U.S. market or by taking on a copycat model. U.S.-based VCs Accel Partners, Sequoia Capital, Andreessen Horowitz, Base10, Liquid2 Ventures, Quona Capital, QED, IFC and Sierra Ventures have all made multiple contributions to Series A rounds in Latin America within the past year.

Raising a Series A round in Latin America today

Raising a Series A round anywhere means checking a lot of boxes. Beyond bringing a great product to market, the startup’s team, story and revenue model should all align to create an unbeatable business. In Latin America, raising a Series A also means knowing where to look for capital, and which models are receiving funding.

Although there is no instruction manual for raising a Series A anywhere, following in the footsteps of companies that have done so successfully can be a wise way to start. Latin America’s Series A success stories outline a list of investors that are interested in this stage, as well as how much they are investing in Latin American companies. Founders can use this information to structure their fundraising efforts and optimize their time to raise a Series A and continue to scale.

Airbus-owned Voom will compete with Uber Copter in the U.S. in 2019

The U.S. air taxi market is heating up: Aeronautics industry giant Airbus will be among the companies operating on-demand air travel service in 2019 in American skies, FastCompany reports. Airbus’ Voom on-demand helicopter shuttle operation will set up shop in the U.S. starting this fall, after previously providing service exclusively in Latin America.

Uber announced its own Uber Copter service earlier this month, which will provide service from Manhattan to JFK airport starting in July, and Blade also already offers similar service between New York City and its three area airports, as well as Bay Area air shuttle routes. Airbus’ Voom is also going to expand to Asia in 2019, the company confirmed to FastCompany, and intends to cover 25 cities globally by 2025 with an anticipated passenger volume of two million people per year.

All of these companies see their helicopter service as an entry point for planned shifts to use of electric vertical takeoff and landing (eVTOL) craft. Airport shuttles seem to be the perfect use case for these early instantiates of air taxi services, since they greatly reduce travel times at peak hours, and also cater to clientele who are likely frequent traveler and can either expense or afford the ~$200 trips.

 

Nowports raises $5.3 million to become Latin America’s digital shipping answer to Flexport

Nowports, a developer of software and services to track freight shipments from ports to destinations across Latin America, has aims to become the regional answer to Flexport’s billion-dollar digital shipping business.

Almost 54 million containers are imported and exported from Latin America each year, and nearly half of them are either delayed or lost due to mismanagement.

Nowports is pitching shippers on its digital management software to keep track of each container, and has signed on a number of leading venture capital firms to fulfill its mission.

The Monterrey, Mexico-based company raised $5.3 million in its seed round of financing. The round was led by Base10 and Monashees, with participation from Y Combinator and additional investors like Broadhaven, Soma Capital, Partech, Tekton and Paul Buchheit.

“In Nowports we saw a very strong combination: well prepared and ambitious team using technology to help thousands of customers to improve their importing and exporting processes. By adding efficiency, reliability, and transparency to change a multi-billion dollar industry, Nowports has been able to attract many clients that saw significant improvements in their daily routines by using the solution” said Caio Bolognesi, general partner from Monashees, in a statement.

The company said it would use the money to expand into new markets, grow its team and integrate with more companies involved in the (very fragmented) Latin American logistics industry. It’s a market that needs a range of better logistics technologies.

“Even though over 90% of the world’s trade is carried by sea, the most cost-effective way to move goods en masse, there has yet to be a solution that’s able to connect suppliers, customs brokers, carriers and transportation companies to provide an efficient and reliable service,” said Maximiliano Casal, founder and chief executive of Nowports, in a statement. “This is why we launched Nowports, combining our 10 years of industry expertise to fill this void and are currently working with over 40 customers in the region and growing.”

The company now has offices in Chile and Uruguay, and is planning to expand to Brazil, Colombia and Peru.

“With platforms, algorithms with AI and integrations, our platform allows companies to take control of their shipments and plan and predict the best timing to move the freight based on the needs of their own company,” said Alfonso De Los Rios, founder and CTO of Nowports.

As the company looks to expand, it has a strategic road map it can follow in the growth of Flexport, the Silicon Valley startup that has become a billion-dollar business by applying technology to the outdated shipping industry.

The two co-founders of Nowports met at a program at Stanford University, with De Los Rios hailing from a family with deep ties to the shipping industry. He and Casal linked up and the two began plotting a way to make the deeply inefficient industry more modern and transparent. To familiarize himself with the market for which he’d be developing a technology, Casal worked in a freight forwarder in Kansas City that had been operating for more than 30 years.

In all, freight providers are getting paid nearly $40 billion per year to move freight into Latin America.

“Alfonso and Max are the ideal founders we look to invest in as they are industry experts and passionate about evolving the industry using technology and automation,” said Adeyemi Ajao, general partner from Base10. “We are proud to be investors in Nowports alongside our friends at Monashees and look forward to watching the company’s continued growth.”

Why is Andreessen Horowitz (and everyone else) investing in Latin America now?

Investments by U.S. venture capital firms into Latin America are skyrocketing and one of the firms leading the charge into deals is none other than Silicon Valley’s Andreessen Horowitz .

The firm that shook up Silicon Valley with potentially over-generous term sheets and valuations and an overarching thesis that “software is eating the world” has been reluctant to test its core belief… well… pretty much anywhere outside of the United States.

That was true until a few years ago when Andreessen began making investments in Latin America. It’s the only geography outside of the U.S. where the firm has committed significant capital and the pace of its investments is increasing.

Andreessen isn’t the only firm that’s making big bets in companies south of the American border. SoftBank has its $2 billion dollar investment fund, which launched earlier this year, to invest in Latin American deals as well. (Although the most recent SoftBank Innovation Fund investment in GymPass is likely an indicator that the fund, much like SoftBank’s “Vision” fund, has a pretty generous interpretation of what is and is not a Latin American deal.)

“We previously didn’t invest internationally, [because] we weren’t as well set up to help these companies,” says Angela Strange, a general partner at Andreessen Horowitz. “Part of the reason for why LatAm is proximity.”

Startups Weekly: The Peloton IPO (bull vs. bear)

Hello and welcome back to Startups Weekly, a newsletter published every Saturday that dives into the week’s noteworthy venture capital deals, funds and trends. Before I dive into this week’s topic, let’s catch up a bit. Last week, I wrote about the proliferation of billion-dollar companies. Before that, I noted the uptick in beverage startup rounds. Remember, you can send me tips, suggestions and feedback to [email protected] or on Twitter @KateClarkTweets.

Now, time for some quick notes on Peloton’s confirmed initial public offering. The fitness unicorn, which sells a high-tech exercise bike and affiliated subscription to original fitness content, confidentially filed to go public earlier this week. Unfortunately, there’s no S-1 to pore through yet; all I can do for now is speculate a bit about Peloton’s long-term potential.

What I know: 

  • Peloton is profitable. Founder and chief executive John Foley said at one point that he expected 2018 revenues of $700 million, more than double 2017’s revenues of $400 million.
  • There is strong investor demand for Peloton stock. Javier Avolos, vice president at the secondary marketplace Forge, tells TechCrunch’s Darrell Etherington that “investor interest [in Peloton] has been consistently strong from both institutional and retail investors. Our view is that this is a result of perceived strong performance by the company, a clear path to a liquidity event, and historically low availability of supply in the market due to restrictions around selling or transferring shares in the secondary market.”
  • Peloton, despite initially struggling to raise venture capital, has accrued nearly $1 billion in funding to date. Most recently, it raised a $550 million Series F at a $4.25 billion valuation. It’s backed by Tiger Global Management, TCV, Kleiner Perkins and others.

 

A bullish perspective: Peloton, an early player in the fitness tech space, has garnered a cult following since its founding in 2012. There is something to be said about being an early-player in a burgeoning industry — tech-enabled personal fitness equipment, that is — and Peloton has certainly proven its bike to be genre-defining technology. Plus, Peloton is actually profitable and we all know that’s rare for a Silicon Valley company. (Peloton is actually New York-based but you get the idea.)

A bearish perspective: The market for fitness tech is heating up, largely as a result of Peloton’s own success. That means increased competition. Peloton has not proven itself to be a nimble business in the slightest. As Darrell noted in his piece, in its seven years of operation, “Peloton has put out exactly two pieces of hardware, and seems unlikely to ramp that pace. The cost of their equipment makes frequent upgrade cycles unlikely, and there’s a limited field in terms of other hardware types to even consider making. If hardware innovation is your measure for success, Peloton hasn’t really shown that it’s doing enough in this category to fend of legacy players or new entrants.”

TL;DR: Peloton, unlike any other company before it, sits evenly at the intersection of fitness, software, hardware and media. One wonders how Wall Street will value a company so varied. Will Peloton be yet another example of an over-valued venture-backed unicorn that flounders once public? Or will it mature in time to triumphantly navigate the uncertain public company waters? Let me know what you think. And If you want more Peloton deets, read Darrell’s full story: Weighing Peloton’s opportunity and risks ahead of IPO.

Anyways…

Public company corner

In addition to Peloton’s IPO announcement, CrowdStrike boosted its IPO expectations. Aside from those two updates, IPO land was pretty quiet this week. Let’s check in with some recently public businesses instead.

Uber: The ride-hailing giant has let go of two key managers: its chief operating officer and chief marketing officer. All of this comes just a few weeks after it went public. On the brightside, Uber traded above its IPO price for the first time this week. The bump didn’t last long but now that the investment banks behind its IPO are allowed to share their bullish perspective publicly, things may improve. Or not.

Zoom: The video communications business posted its first earnings report this week. As you might have guessed, things are looking great for Zoom. In short, it beat estimates with revenues of $122 million in the last quarter. That’s growth of 109% year-over-year. Not bad Zoom, not bad at all.

Must reads

We cover a lot of startup and big tech news here at TechCrunch. Sometimes, the really great features writers put a lot of time and energy into fall between the cracks. With that said, I just want to take a moment this week to highlight a few of the great stories published on our site recently:

A peek inside Sequoia Capital’s low-flying, wide-reaching scout program by Connie Loizos

On the road to self-driving trucks, Starsky Robotics built a traditional trucking business by Kirsten Korosec

The Stanford connection behind Latin America’s multi-billion dollar startup renaissance by Jon Shieber 

How to calculate your event ROI by Sarah Shewey

Why four security companies just sold for $1.5B by Ron Miller 

Scooters gonna scoot

In case you missed it, Bird is in negotiations to acquire Scoot, a smaller scooter upstart with licenses to operate in the coveted market of San Francisco. Scoot was last valued at around $71 million, having raised about $47 million in equity funding to date from Scout Ventures, Vision Ridge Partners, angel investor Joanne Wilson and more. Bird, of course, is a whole lot larger, valued at $2.3 billion recently.

On top of this deal, there was no shortage of scooter news this week. Bird, for example, unveiled the Bird Cruiser, an electric vehicle that is essentially a blend between a bicycle and a moped. Here’s more on the booming scooter industry.

Startup Capital

WorldRemit raises $175M at a $900M valuation to help users send money to contacts in emerging markets 

Thumbtack is raising up to $120M on a flat valuation

Depop, a shopping app for millennials, bags $62M

Fitness startup Mirror nears $300M valuation with fresh funding

Step raises $22.5M led by Stripe to build no-fee banking services for teens

Possible Finance lands $10.5M to provide kinder short-term loans

Voatz raises $7M for its mobile voting technology

Flexible housing startup raises $2.5M

Legacy, a sperm testing and freezing service, raises $1.5M

Equity

If you enjoy this newsletter, be sure to check out TechCrunch’s venture-focused podcast, Equity. In this week’s episode, available here, Crunchbase News editor-in-chief Alex Wilhelm and I discuss how a future without the SoftBank Vision Fund would look, Peloton’s IPO and data-driven investing.

Fintech platform Synapse raises $33M to build ‘the AWS of banking’

Synapse, a San Francisco-based startup that operates a platform enabling banks and fintech companies to easily develop financial services, has closed a $33 million Series B to develop new products and go after international expansion.

The investment was led by Andreessen Horowitz with participation from existing backers Trinity Ventures and Core Innovation Capital . Synapse — which recently rebranded (slightly) from ‘SynapseFi’ — announced a $17 million Series A back in September 2018 so this deal takes it to $50 million raised to date.

The startup was founded in 2014 by Bryan Keltner and India-born CEO Sankaet Pathak, who came to the U.S. to study but grew frustrating at the difficulty of opening a bank account without U.S. social security history. Inspired by his struggles, Synapse, which operated under the radar prior to that Series A deal, is focused on democratizing financial services.

Its approach to doing that is a platform-based one that makes it easy for banks and other financial companies to work with developers. The current system for working with financial institutions is frankly a mess; it involves a myriad of different standards, interfaces, code bases and other compatibility issues that cause confusion and consume time. Through developer- and bank-facing APIs, Synapse aims to make it easier for companies to connect with banks, and, in turn, for banks to automate and extend their back-end operations.

Pathak previously told us the philosophy is a “Lego brick” approach to building services. Its modules and services include payment, deposit, lending, ID verification/KYC, card issuance and investment services.

“We want to make it super easy for developers to build and scale financial products and we want to do that across the spectrum of financial products,” he told TechCrunch in an interview this week.

Synapse CEO Sankaet Pathak

“We don’t think Bank Of America, Chase and Wells Fargo will be front and center” of new fintech, he added. “We want to make it really easy for internet companies to distribute financial services.”

The product development strategy is to add “pretty much anything that we think would be an accelerant to democratizing financial services for everyone,” he explained. “We want to make these tools and features available for developers.”

Interestingly, the company has a public product roadmap — the newest version is here.

The concept of an ‘operating system for banking’ is one that resonates with the kind of investment thesis associated with A16z, and Pathak said the firm was “number one” on his list of target VCs.

With more than half of that Series A round still in the bank, Pathak explained that the Series B is less about money and more around finding “a partner who can help us on the next phase, which is very focused on expansion.”

As part of the deal, Angela Strange A16z’s fintech and enterprise-focused general partner — has joined the startup’s board. Strange, whose portfolio includes Branch, described Synapse as “the AWS of banking” for its potential to let anyone build a fintech company, paralleling the way Amazon’s cloud services let anyone, anywhere develop and deploy a web service.

Having already found a product market fit in the U.S. — where its tech reaches nearly three million end users, with five million API requests daily — Synapse is looking overseas. The first focuses are Canada and Europe, which it plans to launch in before the end of the year with initial services including payments and deposits/debit card issuance. Subsequently, the plan is to add lending and investment products next year.

Members of the Synapse team

Further down the line, Pathak said he is eager to break into Asia and, potentially, markets in Latin America and Africa, although expansions aren’t likely until 2020 at the earliest. Once things pick up, though, the startup is aiming to enter two “key” markets per year alongside one “underserved” one.

“We’ve been preparing for [global expansion] for a while,” he said, pointing out that the startup has built key tech in-house, including computer vision capabilities.

“Our goal is to be in every country that’s not at war or under sanction from the U.S,” Pathak added.

At home, the company is looking to add a raft of new services for customers. That includes improvements and new features for card issuance, brokerage accounts, new areas for its loans product, more detailed KYC and identification and a chatbot platform.

Outside of product, the company is pushing to make its platform a self-service one to remove friction for developers who want to use Synapse services, and there are plans to launch a seed investment program that’ll help Synapse developer partners connect with investors. Interesting, the latter platform could see Synapse join investment rounds by offering credit for its services.

More generally on financial matters, the Synapse CEO said the company reached $12 million ARR last year. This year, he is aiming to double that number through growth that, he maintains, is sustainable.

“If we stop hiring, we could break even and be profitable in three to four months,” said Pathak. “I like to keep the burn like that… it stabilizes us as a company.”

China’s Didi kicks off expansion in Latin America with moves into Chile and Colombia

The wheels are turning on Didi Chuxing’s first major expansion in Latin America after the Chinese ride-hailing firm announced moves into Chile and Colombia to double its presence in the region.

Didi said it rolled into Valparaiso, Chile’s third largest metropolis, and Colombian capital city Bogota this week. The company plans to expand beyond those cities over time, and, in terms of services, it said that it will add dedicated licensed taxis in Colombia this year.

Anchored in China, where it is the country’s dominant ride-hailing service, Didi began to place focus on international expansion last year and Latin America is a key part of its global ambitions.

In the region, Didi currently operates in Brazil — where it acquired local player 99 for $1 billion — and Mexico, but recent reports have linked it with more countries in Latin America. In February, Reuters reported that the company was hiring for operational staff in Chile, Peru and Colombia. Other reports have put its total headcount in Latin America at over 1,000 staff, that’s a clear indication of its intent for the region.

In a statement, Mi Yang — who leads Didi’s operations in Central and South America — called Chile and Colombia “two important centers of growth and innovation in the region.”

Outside of Latin America and its homeland, Didi is present in Taiwan and Australia, where it has other global connection through its investment deals. The company owns a significant stake in Southeast Asia-based Grab it doubled down with a $2 billion investment alongside SoftBank in 2017 — as well as Bolt (formerly known as Taxify) across Europe and Africa, Ola in India and Lyft in the U.S.

Didi also has relations with Uber as a mutual investment was part of the deal that saw it acquire the Uber China business in 2016, and it invested in Middle East-based Careem, which is being acquired by Uber.

That’s a pretty complicated web of relationships and, with Didi’s global expansion, it often pits the Chinese company against its investments. In Australia, for example, Didi is up against Uber, Bolt AND Ola.

In Latin America, Uber is again a competitor and others the field include local players Cabify, Easy Taxi and Beat from Greece — companies that Didi hasn’t backed.

On offer is a market with vast growth potential. Latin America is the world’s second-fastest-growing mobile market. In a region of approximately 640 million people, there are more than 200 million smartphone users and, by 2020, predictions say that 63% of Latin America’s population will have access to the mobile Internet.

Didi’s globetrotting comes at a challenging time for its domestic business, where it is still reeling from the murder of two passengers last year.

As TechCrunch reported last month, Didi is revamping its security systems to put an increased focus on passenger security in the wake of those tragic deaths. That’s come at significant cost and it is said to have pushed back plans to take the company. Uber and Lyft have, of course, completed IPO this year, but Didi’s own timeline for doing so is unclear.

More generally, Didi is far from the first Chinese company to head to Latin America with ambitions of dizzying growth. Earlier this decade, Baidu made a major push to own the nascent web and search business in Brazil — which culminated in an acquisition — while Tencent has backed fintech unicorn Nubank and it is trying sniff out other potential giants-in-waiting as the region’s ecosystem matures.