Integra Five LATAM Dispatch

May 20th, 2022

"The current mean reversion is changing the strategy of several late-stage unicorn and growth companies in Latin America. We believe scarcity of capital and challenges around profitability will force some growth players into consolidation. This will present disciplined investors with very attractive opportunities making the next few years, on a risk-adjusted basis, some of the best in Latin America."

LatAm’s Nubank beats revenue estimates on strong client additions

Nubank is a Brazillian neobank, which is a type of direct bank which operates exclusively online without traditional physical branch networks. Nubank has nearly reached 60 million customers across Brazil, Mexico, and Colombia. It has sidestepped a rise in defaults in the main Brazilian banking market due to its focus on low-risk and low-yielding credit card receivables. 

Nubank added 5.7 million new clients this quarter, whilst its monthly average revenue per active client rose to $6.7, up $3.2 from a year earlier. On average, the cost per client decreased to 70 cents per month from 80 cents a year ago. Chief Executive Officer David Velez said that “This is the strongest quarter in Nu’s history. We reached nearly 60 million customers and a record-high activity rate of 78%.” 

Source: Kantar

Why build in Web3

Web3 is an idea for a new iteration of the World Wide Web based on blockchain, which incorporates concepts such as decentralized and token-based economics. The dominant internet platforms are built on aggregating users and user data. As these platforms have grown so has their value thanks to the power of network effects. 

In Web3, platforms have full control of underlying data and users can own whatever content they have created, as well as digital objects they have purchased. These digital assets are typically portable, and this new paradigm has a few important advantages: it’s easier for new companies to compete with established ones if they offer better user experience. The system is less zero-sum; and it is easier to win users’ trust as key operations can be encoded on the blockchain in smart contracts which are auditable and immutable.  These factors are what makes it much easier to launch a product in Web3.  

 

Femtech market size worth $13.1 billion by 2030 at CAGR of 11.1% Grand View Research Inc

Grand View Research, a US based market research and consulting company, reported that the global femtech market size is expected to reach 13.1 billion by 2030, and it is expected to expand at a CAGR of 11.1% during the forecasted period.  

The market’s anticipated value is owed to the increasing digital literacy amongst female users, increasing smartphone penetration & improving internet connectivity. Growing health consciousness amongst female users and normalizing women’s health issues. 

The increasing adoption of smartphones by consumers is driving the growth of various women’s health applications in the market. Continuous improvement in network infrastructure and growing network coverage are boosting the demand for femtech services.  

The regulatory environment and increase in regulatory approvals of various digital applications addressing conventional women’s health issues such as menstruation tracking, pregnancy and fertility management are expected to contribute directly to growth. 

Source: PR News Wire, Emergen Research

Latin America has opportunity ‘to shine’ IDB’s President says

Recent geopolitical events favour the region and Latin America has a unique opportunity to secure new investments and boost spending on infrastructure. “There’s an opportunity for the region to shine,” Mauricio Claver-Carone, head of a key development bank, said. Risk sentiment amongst investors has shifted amid Russia’s invasion of Ukraine, supply chain disruptions and Covid-19 shutdowns. He expects the region to grow 2% to 3% this year, though it could be higher than current estimates. 

The IDB’s chief also sees annual investments in the region of above $20 billion annually as ‘the new normal’ for the institution. Last year the bank lent a record of $23.5 billion to the region with a focus on boosting the economy and offering credit lines to buy Covid-19 vaccines for one of the regions hit hardest by the pandemic. 

The bank wants to increase the number of US investors in the region as it focuses on financing ‘across the board’ in services and manufacturing as well as infrastructure. “I don’t want a single company to look at China before it looks at Latin America and the Caribbean,” he said. 

State of Blockchain: CB Insights

CB Insights reported the state of blockchain globally in Q1 2022. The most important points to note are the following: venture funding to blockchain startups grew for the 7th straight quarter. Most other sectors saw Q1/22 declines due to public markets and unsteady economy. VCs however, doubled down on blockchain and crypto. Web3, including NFTs and DeFi were the biggest drivers of growth. 

There were 461 blockchain deals. That is over seven deals per business day, breaking records of equity deals to blockchain startups. The count of 461 was up 15% QoQ and 84% YoY. 80% of global blockchain deals were early stage, showing that the sector is far from maturity and bigger deals are on the horizon. 

US blockchain startups raised over $5 billion in funding for the 2nd quarter in a row. The US government began assessing the benefits and risks of crypto, moving towards clearer regulation. Regulation may be the key to broader institutional adoption.  

Source: CB Insights, State of Blockchain
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