Nelo raises $20M in BNPL push

Nelo, a startup founded by former Uber international growth team leads, raised $20 million in an effort to help expand its Buy Now Pay Later platform throughout Mexico and Latin America. The Mexico City-based company already is live with over 100 merchants, including Steve Madden and Ben & Frank. Using Nelo’s app, customers can make purchases from merchants such as Amazon, Mercado Libre, Telcel, Netflix and Spotify.

New York-based Two Sigma Ventures led the round, with existing backers such as Homebrew, Susa Ventures, Crossbeam and angel investors. With the latest Series A financing, Nelo has raised a total of $25.6 million since its 2019 inception.

Nelo joins a competitive BNPL landscape in Mexico which includes Alchemy. As highlighted in Techcrunch the founders believe the Nelo advantage is a captive consumer base, “our mobile app allows customers to buy now and pay later at over 75 merchants, and very soon, any merchant,” Miller said, “ultimately becoming the destination for any consumer that wants to buy online. This captive consumer base is crucial to building the network that is Nelo.”

Data as of November. 2020 Source: Kaleido Intelligence, S&P Global Market Intelligence

The startup has apps on both Android and iOS and its revenue and GMV is growing by 50% month over month, according to Miller. It is currently seeing over 100,000 new purchases/transactions per month.

Nelo is planning to use its new capital to grow its consumer and merchant base, and to continue to build out its team. The company has hubs in Mexico City, New York City and remote employees.

There is a strong case for BNPL in Mexico, with less than 15% of the population in Mexico having a credit card and existing behavior around paying in installments in Mexico, called “meses sin interes,” but via “difficult-to-access” cash vouchers. More broadly, e-commerce spend in Mexico is increasing much faster than access to credit, in addition to open fintech regulation in the country making it all easier. (TechCrunch)

Holon IQ releases Latin America EdTech 100

Holon’s annual EdTech ranking selected 100 digital education companies out of almost 2,000 EdTech startups in the region, based on HolonIQ’s scoring fingerprint that includes capital, team, market, product and momentum.

Start-ups in this cohort have collectively raised almost half a billion dollars in capital, illustrating the significant traction in the market and investor confidence in local teams. There have been twelve $5M+ rounds by start-ups in the 2021 cohort in the last two years including blockbuster fundraising from online learning platform Crehana, study support and test prep platform, Descomplica and coding school, Digital House.

Brazil makes up the majority of EdTech companies in this cohort with 38% of start-ups headquartered in the country. This year sees a broad geographical spread in the region with 17% from Mexico, Argentina at 13%, followed by 11% from Colombia, Chile 8% and Peru at 6%. It is also encouraging to see teams from Venezuela, Guatemala, Ecuador, Costa Rica and Jamaica in this year’s cohort.

Source: holoniq.com

Why is the Mexican Stock Market Value Lagging peers?

  • It’s been 15 months since the last initial public offering by a company in Mexico.
  • Structural challenges such as cheap access to foreign investment capital (especially for early-stage companies), insufficient capital markets liquidity, modest retail market, lack of bank competition, powerful private sector, foreign bank lending and post IPO share price weakness.
  • Impacts AFORE local equity returns, wealth creation, impedes broader economic growth.
  • Unicorns continue to thrive will global VCs turning to Mexico venture. KAVAK, Konfio, Clip and Bitso bring the Mexican count to 4 unicorns.
  • Enormous contrast to Brazil with $12 billion in IPOs YTD.

(Bloomberg)

Source: Bloomberg
*Completed and pending. ** To October 4th Source: PitchBook, The Economist

Stanford GSB data reveals unicorns per 1,000 MBA alumni

Terrific research from Stanford GSB professor, Ilya Strebulaev, focusing on which business school graduates are more likely to start companies and breed unicorns.

As professor Strebulaev shared on social medical: “for the sample of 531 U.S. unicorns, my team at the Stanford University Graduate School of Business Venture Capital Initiative and I carefully identified 1,356 founders. Out of these, 238 founders earned a business school graduate degree, with 25 business schools having at least two founders among their alumni. For each business school, we then estimated the total number of full-time MBA graduates between 2000 and 2015. The ratio of total graduates over unicorn founders is the “per capita” unicorn founder production of each business school, which eliminates the bias caused by the unequal size of the school’s classes (e.g., Harvard Business School is twice as large as Stanford University Graduate School of Business).

The Stanford University Graduate School of Business is ahead with 3 unicorn founders per 1,000 MBA alumni, with Harvard Business School second at 1.6, and University of California, Berkeley, Haas School of Business third at 1.4. The chart shows the US business schools ranked accordingly.

Source: Ilya Strebulaev, Venture Capital Initiative, Stanford graduate School of Business (10/2021)

Image Note: The value shows the number of unicorns co-founders per 1,000 business school alumni with a graduate degree earned in 2000 – 2015. Data covers 531 US companies that became unicorns in 1997-2019.

Major coffee buyers face losses

  • Traders say up to 1 mln bags of Colombia coffee crop undelivered.

 

  • Surging prices prompt farmers to renege on previously agreed sales.

 

  • Colombia coffee federation says delivery defaults widespread.

 

Coffee farmers in Colombia, the world’s No. 2 arabica producer, have failed to deliver up to 1 million bags of beans this year or nearly 10% of the country’s crop, leaving exporters, traders and roasters facing steep losses, industry sources told Reuters. (Reuters)

Chart: Pete Evans / CBC - Source: Bloomberg

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