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MARKETS

October 5, End Of Day

• Argentina
• S&P MERVAL Index = 613,071.63 (YTD = 203.37%)
• Brazil
• BOVESPA Index = 113,284.08 (YTD = 3.23%)
• Chile
• S&P IPSA Chile = 3,166.59 (YTD = -0.19%)
• Colombia
• MSCI COLCAP = 1,092.40 (YTD = –15.06%)
• Mexico
• IPC Mexico BMV = 49,454.59 (YTD = 2.04%)
• Peru
• S&P/BVL Peru = 22,008.90 (YTD = 3.18%)

TECH

Fundraising picks of the week

Food4You: Embarking on a mission to transform the plant-based food industry, Food4You utilizes a biotech platform to enhance the texture, flavor, and nutritional profile of products. Their innovation lies in developing unique bacteria combinations for plant substrates, aiming to offer a wider choice of robust plant-based products. With significant interest from industry giants like Grupo Harmony and NotCo, Food4You is leading the way in biotech solutions for plant-based foods. Dive deeper into the case here.

iZi: Stepping into the sphere of SMBs management software, iZi has made its mark by processing over 3.5 million transactions. They facilitate management information for business decisions and empower SMC sales channels through Fintech solutions. Their platform features over 750 clients, a remarkable 95% renewal rate, and has been cash positive since March 2023. With a net revenue retention of 327% YoY and the distinction of being the first startup in Bolivia to raise from a local institutional VC, iZi is setting new standards in the sector. Dive deeper into the case here.

Dive deeper into other fundraising firms in LATAM here.

More in tech - Fintech Flourish

The fintech market in Latin America is experiencing rapid growth, propelled by factors such as increased internet and mobile device usage, regulatory shifts, and the adoption of blockchain technology. A recent “Latin America Digital Payment Trends 2023” report, noted how although cash has traditionally been the dominant payment method in the region, alternative payment methods now account for 47% of e-commerce transactions. The use of cash has decreased by 36%, with other methods such as transfers, prepaid cards, e-wallets or cryptocurrencies, gaining popularity.

1. Latam Fintech Market: The number of fintech platforms in Latin America and the Caribbean has more than doubled over the past three years. Brazil leads with 31% of the total fintech platforms.
2. Factors Driving Growth: The growth is attributed to the demand for financial services not offered by traditional financial institutions, the rise of digital financial services due to the COVID-19 pandemic, and supportive regulatory changes.
3. Market Size and Growth: The Latin American fintech market grew at a CAGR of 23.8% from 2021 to 2026, with a projected transaction value of USD 164.3 billion by 2026.
4. Key Players: Some of the major players in the Latin American fintech market include Nubank, MercadoLibre, StoneCo, Creditas, and Konfio.
5. Challenges: The market faces challenges such as consumer data security concerns, limited access to capital, regulatory barriers, limited financial inclusion, and talent shortages.

Recent news from this sector:

• Mexican fintech platform Mundi has announced a Series A-2 investment round of US$15 million, led by Haymaker Ventures. The funding aims to enhance the user experience for exporters, importers, and logistics companies by offering integrated financial services. Olivia Baribeau from Haymaker Ventures highlighted Mundi's unique approach in removing entry barriers for businesses, enabling them to engage in global trade. Alongside this investment, Mundi is rebranding to become the premier fintech platform simplifying international trade in Latin America.
• Nubank has secured a loan of US$ 265 million to boost its operations in Colombia, an increase from the initial commitment of US$ 150 million announced in January 2023. The additional funds, sourced from major institutions, will significantly enhance access to the financial services Nubank offers in Colombia and drive its operational growth. Marcela Torres, General Director of Nu Colombia, emphasized that the increased loan from the International Finance Corporation (IFC) reflects confidence in Nubank's leadership in digital financial services in Colombia. In just over two years, Nubank has garnered over 700,000 customers in the country.
• Drip, a Brazilian fintech specializing in offering installment payment solutions via the PIX system, has secured an $8M investment from SRM Asset, the Venture Capital division of SRM Ventures. This collaboration will see Drip utilizing the Wefin platform, SRM Group's tech branch, to enhance its credit operations. Since its inception, Drip has witnessed a monthly growth of 25% in its billing and boasts registrations from over 500 active stores, including global giants like Nike, Shein, and Shopee. To use the app, users undergo a security verification during registration and are then provided with a tailored credit limit.

CURRENT AFFAIRS

Mexico: The International Monetary Fund (IMF) has increased its 2023 growth prediction for Mexico from 2.6% to 3.2% due to strong private consumption, services, construction, and automotive production. The IMF highlighted Mexico's potential to benefit from "nearshoring" of U.S. supply chains but emphasized the need for Mexico to address its structural challenges and adopt prudent macroeconomic policies. However, the IMF expressed concerns about Mexico's fiscal challenges, noting a projected 2023 fiscal deficit of 3.9% of GDP and a 2024 deficit of 5.4% of GDP, which could lead to economic complications.

Brazil: Brazil’s Energy Minister, Alexandre Silveira, stated that Brazil's ambitions for oil exploration, including in areas near the Amazon rainforest, do not contradict its goal to lead the global transition to green energy. He emphasized that with 90% of Brazil's electricity from renewables and a significant biofuels program, the country has the authority to discuss an inclusive energy transition. While President Luiz Inácio Lula da Silva aims to end Amazon deforestation by 2030, Silveira supports exploratory drilling in sensitive areas, arguing that oil revenues contribute to a social fund benefiting health, education, and the energy transition.

Argentina: The first presidential debate in Argentina showcased the visions of five main candidates: Javier Milei, Patricia Bullrich, Sergio Massa, Juan Schiaretti, and Myriam Bregman. Held in Santiago del Estero, the debate focused on the economy, education, and human rights. Milei and Bullrich emphasized monetary policies and tackling inflation, respectively, while Massa and Schiaretti proposed economic and educational reforms. Bregman criticized past government decisions and defended socialist principles, setting the stage for the upcoming elections on October 22nd.

FURTHER READING

🧑‍💻Coding the Future: ready to unbundle Latin America's state of education with two powerhouses of EdTech in the region?

Access to higher education in Latin America is a pressing concern; while only 14 percent make it to university, countries like Argentina see half of their students leaving high school prematurely.

In this episode, Fabio Muniz from Awari (Brazil), and Federico Hernandez from Henry (Argentina), discuss topics ranging from continuous learning and coding schools to improving access to education. All of this in an effort to keep supplying highly demanded technical talent to the world.

These two entrepreneurs clearly learned something from YCombinator, being now among the most successful EdTech companies in Latin America. 🚀

Listen to our latest podcast here.