LAVCA Trends in Tech

Latin American venture investment reached $15.7b in 2021, which is more than three times of the previous record of $4.9b in 2019, and more than the previous 10 years of venture investment combined. Latin American registered record-setting listings in 2021 on Brazil’s B3, NYSE and NASDAQ, including Nubank, dLocal, GetNinjas and VTEX.

These investments are paying off, as sixteen startups surpassed $1billion in disclosed valuation in 2021: Bitso, CargoX, Clara, Clip, CloudWalk, Facily, Konfio, olist, MadeiraMadeira, Merama, Mercado Bitcoin, MURAL, NotCo, Tiendanube/Nuvemshop, Ualá and unico. Additionally, in February of this year Betterly, an insurtech, became the second Chilean startup to surpass $1billion in disclosed valuation, after NotCo reached the same milestone in 2021.

The top sectors for investment have been led by Fintech, with 39%, $6b invested across 258 transactions and a 2x increase in terms of deals and a 3.7x increase in total capital invested compared to 2020. Whilst the focus is on fintech, consumer finance and banks have been the leaders of investment since 2019, however investors are starting to back increasingly ranged technologies such as payments, retail trading, banking as a service and Buy-Now-Pay-Later. [1]

Source: LAVCA. Data as of December 31, 2021.

Chile Will Be the First Nation to Sell Sustainability Linked Bond

Chile is assessing investor interest in a potential sale of bond tied to its sustainable goals, a move that would make it the first nation to issue sustainability-linked bonds. The SLB offering would be part of the country’s planned sale of $2 billion in environmental social and governance bonds overs this month, adding to the $4 billion raised this year.

The Ministry said that Chile intends to use the proceeds from its first sustainability linked bond sale to address greenhouse emissions and to promote the diversification of the country’s energy sources into renewable energy. It has also mandated that BNP Paribas SA, Credit Agricole CIV and Societe Generale organize a series of fixed income investor meetings in the US and Europe, starting Wednesday. [2]

Source: Bloomberg. Note: 2019-2021 data is full year issuance globally from corporations and governments. 2022 is forecast from Moody’s ESG Solutions

Brazil Moves to Regulate Cryptocurrency

Brazil took its first step to regulate the country’s cryptocurrency as the economic affairs committee approved a bill to create rules for digital currency funds. Bloomberg News reported that if this bill were to be approved, it would make Brazil the largest Latin American nation to regulate cryptocurrencies. The bill still requires adoption by the full senate and lower house before President Jair Bolsonaro can sign it into law. It is predicted that the responsibility to define virtual assets and classification to service bodies will rely on the central bank which has been helpful in the construction of the bill.

Virtual asset service providers are required to prevent money laundering and asset concealment while combating criminal organizations, terror financing and the proliferation of weapons of mass destruction. The new regulation is focused on investments rather than popular use which establishes a favorable environment for more regular crypto use. [3]

Note: Includes products or services ordered using the internet, regardless of the method of payment or fulfillment; excludes travel and event tickets, payments such as bill pay, taxes, or money transfers food services and drinking place sales, gambling, and other vice goods sales. Source: eMarketer, May 2021

‘Premature’ to Say How US-Russia Standoff Will Affect Latin America – Moody’s

Credit rating agency, Moody’s states that it is still too early to say how the current tension between the US and Russia over Ukraine will cause specific economic impacts in Latin America and the Caribbean. The sanctions imposed by Europe and the US will be taking some effect. Most significantly, the move by German Chancellor, Olaf Scholz to suspend the certification process for Nord Stream 2 gas pipeline, the construction of which was completed last year It runs over 1,200km under the Baltic Sea to the cost of northern Germany and is designed to carry up to 55bn cubic meters per year of Russian gas to Europe.

This move led to a spike in natural gas prices on Tuesday, which will likely affect Latin America at some stage. Marianna Waltz, head of LatAm ratings and research at Moody’s Investor Service, thinks that the energy prices are the most closely linked between Eastern Europe and Latin America, especially in countries where energy generation and oil and gas exploration are key parts of the economic structure. [4]

Slim’s América Móvil Launches 5G Rollout in Mexico

On Tuesday, Carlos Slim’s América Móvil said it would roll out 5G mobile coverage in 120 Mexican cities and invest $1.8bn in its home network by the end of the year. It will be the largest 5G role out in the country thus far and is already currently available in 18 cities. Executives said that some users would automatically be switched to the quicker service, whilst lower paying subscribers will be provided the option to start a separate plan as an add-ons.

Mexico currently has 1 million 5G compatible phones, and Mexican’s are spending more money on better phones, which are also becoming cheaper. Daniel Hajj, América Móvil chief executive said that “When we launched 4G and 4.5G the phones were much more expensive than they are now”.

Slim’s greatest competitor is AT&T which has around a 17% share in the mobile market. AT&T entered Mexico in 2014 after constitutional reform to increase competition. Prior to this, Slim had a monopoly and lack of regulatory oversight. AT&T announced its own Mexican rollout of 5G at the end of last year, in its three year plan. [5]

Source: Omdia, 5GAmericas

This site uses Akismet to reduce spam. Learn how your comment data is processed.