Investments in Latin America hit historic records fueled by VC deals
Since February, LATAM startups have been surpassing USD 1Bi of investments every month. Last year, investments reached this mark in only one month.
A total of 929 venture capital deals were carried out year-to-November across Latin America, for a total $16.88 billion, a 48.88% increase in the number of deals and up 243.48% in value year-on-year.
The number of asset acquisitions to November totaled 364, with a combined value of $26.15 billion. In general terms, M&A deals to November totaled 3,152 in the region, of which 1,553 totaled $135.77 billion in value, which is a 39.41% increase in volume and a 124.93% increase in value compared with the same period of 2020, according to TTR. (Bloomberg Línea, Transaction Track Record, SlingHub)
BanColombia partners with Gemini for bitcoin trading
Bancolombia and Gemini announced a partnership through which the Colombian bank will offer its customers the possibility to buy and sell bitcoin. Starting from December 14th, Bancolombia will offer its clients an on-and off-ramp to trade Bitcoin Cash(BCH), bitcoin(BTC), Ether(ETH) and Litecoin(LTC).
Gemini’s Principal of Strategy and Corporate Development, Cynthia del Pozo García, stated that “Crypto is borderless by nature, and we are committed to expanding crypto access to individuals across the globe.” And particularly, “The partnership also serves as an important step toward the strategic expansion of Gemini’s presence in Latin America.”
This partnership is part of a one-year pilot program that the Colombian government is sponsoring to bring bitcoin and cryptocurrency services to citizens. Specifically, the program will run through the country’s financial regulator, the Superintendencia Financiera de Colombia (SFC). As part of this program, the SFC also announced in January that other companies that are going to partner with Colombian banks are Binance and Bitso. (LatamList)
Chile Presidential Elections: Another Challenge for LatAm democracies
On December 19, Chile will face one of the tightest elections in the country’s modern democracy. As we have seen recently in Latin America, this election represents once again the traditional left versus right. We anticipate a very polarized contest confronting Jose Antonio Kast (55) a free-market former congressman and Gabriel Boric (35) a socialist congressman. Boric is backed by a coalition with strong influence from the Communist party and other far-left groups promoting social change, overhaul of the pension system, advance LGBTQ and increasing mining and corporate taxes. On the other side, Kast is backed by the Christian Social Front coalition promoting law and order, government downsizing and tax breaks to encourage investments.
Although, Mr. Kast finished first-place in the election’s first round with 28% of the votes, while Mr. Boric came in second place with 25,7% of the votes. Second round polls up to Dec 4 put Mr. Boric leading the race. Voters turnout and specially how many younger voters vote, will be critical for the election outcome. Three-quarters of Chile’s more than 15 million registered voters did not vote for either candidate last month. More than half did not participate at all, and more than 45 percent of those who did cast a ballot, voted for one of the other five candidates now out of the running. Analysts forecast the country north region will be key as well as centrist and disaffected voters.
“Yet while this election may turn on which candidate’s promise of better living standards is more convincing, there’s something much bigger at stake. That is the survival of the democratic institutions protecting the pluralism, property rights and public order that have made Chile one of Latin America’s richest countries” highlighted Mary Anastasia O’Grady from WSJ. ( Reuters, WSJ, Aljazeera)
Pitchbook Q3 2021 VC update on Fintech
Fintech investors and entrepreneurs continue to reap the rewards of an acceleration in digital transactions, retail trading and other pandemic-era tailwinds. In Q3 2021, fintech companies globally raised $33.7 billion in VC across 1,217 deals. The aggregate transaction volume for the first three quarters of this year stands at $88.3 billion, which is almost double of 2020’s full-year total of $44.9 billion. Payments companies continue to drive a large proportion of deal value, at almost $10 billion, representing 33.8% QoQ growth.
Consumer finance also had a strong quarter, with the largest five deals in the segment going to neobanks. These deals include Brazil-based Nubank ($1.2 billion Series G), Chime ($1.1 billion Series G), Revolut ($800.0 million Series E), Varo ($510.0 million Series E), and Nigeria-based OPay ($400.0 million Series C).
During the quarter, the median pre-money valuation for VC-backed, late-stage fintech remained elevated at $265.0 million. Early-stage median pre-money valuations continue to reach new highs at $40.0 million—up from $35.0 million in Q2. This leads to the highest premoney valuation step-ups, a measure to gauge valuation accretion between stages, for both early- and late-stage fintech companies, at 2.8x and 2.3x, respectively. Valuation multiples have also continued to climb higher throughout the year, with the median stretching to 21.7x revenue from 19.5x in Q2. If this holds through the end of the year, it will represent the highest recorded median revenue multiple for VC-backed fintech companies in a single year (the previous record was 19.8x in 2015). (Pitchbook Emerging Tech Research Q3 2021)
Brazil's November soybean exports soar amid strong demand from China
Brazilian soybean exports in November almost doubled on the year amid strong demand from China, according to the country’s foreign trade department, or Secex.
A higher-than-expected soybean exports from Brazil is likely to support oilseed prices.
According to Platts, SOYBEX FOB Santos for January loading was assessed at $497.17/mt on Dec. 1, in comparison with $490.25/mt for SOYBEX FOB New Orleans.
The world’s top beans producer and exporter shipped out 2.59 million mt of the oilseed, as of Nov. 30, compared with 1.43 million mt in the same month last year, the Secex report said Dec. 1. China has been buying a lot of Brazilian beans in recent weeks. In October, China accounted for almost 80% of total Brazilian soybeans shipments, according to the Secex data. This trend seems to be continuing in November as well.
China turned to Brazilian soybeans as the US beans supply was still recovering from Hurricane Ida, which impacted grain elevators in the gulf region since late August. Hurricane Ida, a Category 4 storm with 150 mph when it made the landfall in Louisiana Aug. 29, had hit grain elevators in New Orleans, a major corridor for US soybean and corn exports, accounting for almost 60% of total US grains exports.
The US soybean export volumes generally soar at the start of harvest during mid-September and continue till February. While the Brazilian oilseed trade spike between January and August every year.
According to Secex, Brazil exported 83.4 million mt of soybeans between January and November, up 1% on the year, with 70% shipments headed for China. Brazil is likely to export 85 million mt of beans in the calendar year 2021, steady on the year, the country’s national agricultural supply company Conab said in its monthly report Nov. 11. (S&P Global Platts)