November has been a fairly good month from Latin America’s tech scene, with a series of funding rounds that could hopefully result in interesting exits for all involved parties in the near future. Here are the news you should know about:
Arrivals and departures
Let’s get bad news out of the way: Rocket Internet’s cosmetics subscription box service Glossybox is scaling down, Venture Village reported a few weeks ago. Its international offices are the most impacted, and its Brazilian landing page has been replaced with an announcement stating that Glossybox Brasil already closed shop.
While it is never pleasant to see startups shut down, this may simply be business as usual for Rocket Internet, which is known for quick decision-making, one way or the other. No later than two weeks ago, its South East Asian price comparison website PricePanda announced that it was launching in Mexico, which the company’s CEO Christian Schiller described as “one of the most promising and flourishing markets in Latin America.”
India-born restaurant search service Zomato is also venturing into new waters, and raised a whopping $37 million round of funding to finance its global expansion, starting with São Paulo, Istanbul, Ankara and Jakarta. According to VentureBeat, the company already has a major presence in India and the United Arab Emirates.
German Square competitor SumUp also chose Brazil for its Latin American debut, which will bring its point-of-sale (PoS) technology to Brazilian vendors and clients. As we reported last July, the company raised funding from BBVA’s corporate fund to expand into South America, which means other countries are likely to follow.
Contrary to SumUp, which seems to have chosen to expand one country at a time, Instagram rival Mobli is taking advantage of its connection with Mexican billionaire Carlos Slim to give a strong and simultaneous push across Latin America. As you may have read, Slim-owned carrier America Movil has made a strategic investment in Mobli as part of the startup’s $60 million financing round.
Following the deal, America Movil and its subsidiaries are heavily promoting the photo-sharing app among their 60 million subscriber base, and only stopped one step short of pre-installing Mobli on compatible devices. In practical terms, Gizmodo Brasil explains that subscribers of Brazilian operator Claro will automatically start seeing a Mobli icon on the homescreen of their Android smartphones, which is actually a shortcut to download the app on Google Play.
Big players making moves
In a somewhat surprising turn of events, Samsung Electronics and Venezuela’s government announced that they would be “forming a joint venture to assemble devices and home appliances in the South American country,” Reuters reported on November 20. According to industry minister Ricardo Menéndez, Samsung computers, tablets and mobile phones could start being assembled in Venezuela as early as next year.
As the Financial Times’ Andes correspondent Andres Schipani noted on the FT’s BeyondBrics blog, “given the way electronics retailers have been treated recently, it’s amazing anyone would want to do business with Caracas.” Still, the South Korean manufacturer is apparently willing to take a chance at working with the Venezuelan authorities in order to capture some of Venezuela’s internal market, with hopes to export to countries of the Mercosur bloc and oil alliance Petrocaribe further down the line.
Earlier that week, Chinese company Lenovo had announced that it would invest $100 million in a Brazil-based R&D center. The facility will be based in the Science and Technology park of the city of Campinas, a growing tech hub located in the state of São Paulo. It is expected to launch in January 2014 and generate 100 new jobs.
Still in Brazil, Google launched a localized version of its education platform YouTube EDU, in partnership with Brazilian foundation Fundação Lemann, which was in charge of content curation. Upon launch, the page highlighted 8,000 online teaching videos proceeding from 26 global and Brazilian sources such as Khan Academy, Biologia Total and Vestibulândia. According to IDG Now, Google plans to have more videos translated into Brazilian Portuguese and close additional partnerships with Brazilian education providers to expand the platform’s depth and scope in 2014.
In addition, Google closed a partnership with the Education department of the state of São Paulo, which will adopt Google Apps for Education. As part of their cooperation, both parties will make the online collaboration suite available to over 5,000 schools, 4 million students and around 300,000 teachers and civil servants, Google detailed on its official Brazilian blog.
Amazon made Brazil one of the two latest countries to feature its Android Appstore, alongside Australia. While it had already been available in nearly 200 countries since May, its official rollout means that Brazilian users can browse a localized version of the store, while developers can use Brazilian reals as their currency of choice.
As for Apple, it had to endure seeing Brazilian brand Gradiente launch a smartphone called “IPHONE C600″ on the very same day that Cupertino’s iPhone 5s and 5c models were being released in Brazil. As you may remember, the two companies are in the middle of a copyright battle in which a judge recently allowed Gradiente to continue to use the iPhone trademark in its Android-based products when accompanied by the Gradiente word.
Money talk: Exit, PE, VC and Seed
StudentUniverse has acquired Latin American budget accommodation booking platform WeHostels, the startup’s CEO Diego Saez-Gil announced in a blog post. Although the terms of the deal were not disclosed, he told travel publication Skift that it included a combination of cash and stock and that “investors are walking away very happy.”
Following the acquisition, WeHostels is expected to remain a standalone brand, while helping StudentUniverse improve its mobile offering. “Their focus will be improving the UX and UI of mobile flight booking as well as revamping and relaunching StudentUniverse’s Android and iOS apps,” Skift reports.
While WeHostels’ headquarters are located in New York City, it graduated from Start-Up Chile and NXTP Labs’ acceleration program, a large part of its team is based in Colombia and Saez-Gil himself is Argentinian. This means that its exit is good news for Latin America’s tech scene in general, and for some investors in particular. As you may remember, WeHostels raised $1.2 million in seed funding in May 2012 from a list of investors including Ventech, Quotidian Ventures, CAP Ventures, TA Venture, Torrenegra Labs, Fabrice Grinda and Dave Lerner, among others.
This exit aside, November also brought news of capital injections that are set to take place in Latin America. Private equity firm Apax Partners indeed announced that it was planning on investing some of its third $7.5 billion global fund in emerging markets, including Spanish-speaking Latin America and Brazil, where recently opened an office in São Paulo.
Companies graduating from Latin America’s leading accelerators will also get access to a new source of funding with the launch of a vehicle that helps angel investors join forces to invest in appealing early-stage startups from across the region and acquire know-how in the process. Called LATAM Incubated One BV, it is managed by SSX Ventures and will raise capital via an initial public offering on the firm’s marketplace for startup funding, Startup Stock Exchange.
Back to the present, Mexico-based e-commerce platform Linio raised capital from Mexican VC firm Latin Idea Ventures, which will help this Latin American Amazon clone deepen its presence throughout the region. Previous investors JP Morgan Asset Management, Summit Partners, Investment AB Kinnevik, the Tengelmann Group and Rocket Internet also participated in this new round, which brings Linio’s total amount of funding raised so far to approximately $100 million.
500 Startups’ alum ContaAzul raised a Series B round of financing led by previous backer Ribbit Capital, with participation from Valar Ventures and existing co-investors Monashees Capital and Napkn Ventures. The startup’s main goal is to boost the adoption of its cloud-based SaaS accounting and invoicing platform among Brazilian SMBs. According to CEO Vinicius Roveda, it will already have served over 180,000 small businesses by the end of 2013.
European-born taxi booking startup Taxibeat raised approximately $4.24 million from a VC fund it declined to name, but that Brazilian media outlet O Globo identified as Hummingbird Ventures. This might have been be off-topic hadn’t it decided to use this new funding to expand its footprint in Latin America, where it already operates in Rio de Janeiro, São Paulo and Mexico City.
German fund and company builder Project A made a R$1 million investment (around $430k) in Brazilian startup AdTrade, its third deal in the country following previous announcements regarding Epicerie and Natue.
In addition, Start-Up Chile alum and now UK-based company Uniplaces secured £700k in funding (around $1.15 million) by Octopus Investments and angel investors for its student accommodation exchange platform.
While TechCrunch recently wrote that the startup accelerator trend was “finally slowing down,” this might not yet be true in Latin America, with new initiatives still being announced. For instance, Jump Brasil is a new accelerator that will be based in Recife, Brazil, where it will be part of the Porto Digital innovation center.
In addition, media-focused program Media Factory is taking off in Buenos Aires, where it is headed by ICFJ Knight International Journalism Fellow Mariano Blejman. According to Blejman, the team is accepting applications from Spanish-speaking media entrepreneurs based across Latin America and will invest around $75,000 per company in addition to mentorship.
As for NXTP Labs, it is expanding beyond Argentina with the launch of its first program for Uruguayan startups, in partnership with local fund Tokai Ventures. The acceleration is set to last 14 weeks, during which entrepreneurs will be provided with a co-working space, training, mentoring and access to custom events in exchange for a 2% to 10% equity stake in their company, Uruguayan newspaper El Pais reported.