E-commerce roll-up Wonder Brands lands $20m

This week Mexico-based Wonder Brands announced their $20 million seed round, co-led by ALLVP and Mountain Nazca, with participation from CoVenture, Victory Park Capital, GFC, QED (Fontes), Korify Capital and Endeavor Catalyst.

Wonder Brands co-founders Nicolás Gonzalez Luna and Federico Malek came together to start the company in January 2021 to acquire digital brands in the MercadoLibre and Amazon ecosystem. It then leverages its technology to scale operations and grow sales by taking care of the marketing, analytics, supply chain management and working capital needs of the companies. It focuses on companies in the areas of home & garden, sports & fitness, beauty and personal care.

The company is on target to achieve $55 million in revenue by the end of the year and will then move toward $100 million in revenue in the next 12 months, Malek said. It currently operates in Mexico and plans to begin operations in Brazil by the end of 2021. (Techcrunch)

Source: LAVCA Tech Report 2021

New IPCC report’s implications for Latin America

This week the IPCC issued a “code red for humanity” in its alarming assessment of our progress towards curbing greenhouse gas emissions. As signatories of the PRI and staunch impact investors we are committed to helping our portfolio companies on the road to net-zero. Doing our part is a big opportunity to help Integra Groupe leave the world a better place.

As the FT highlighted, the world is likely to temporarily reach 1.5C of warming within 20 years even in a best-case scenario of deep cuts in greenhouse gas emissions, a landmark report on climate change signed off by 234 scientists from more than 60 countries has concluded. Even with rapid emissions cuts, temperatures would continue to rise until “at least” 2050, the scientists said, and lead to further extreme weather events. Without “immediate, rapid and large-scale reductions” in emissions, curbing global warming to either 1.5C or even 2C above pre-industrial levels by 2100 would be “beyond reach”, they said. The latest analysis of the science of global warming from the UN’s Intergovernmental Panel on Climate Change is the sixth such report and the first since 2013. Its summary was reviewed by representatives from 195 countries and will form a basis for negotiations at the global summit in November.

The IPCC found that temperatures have very likely increased in all sub-regions of Latin America and will continue to do so at rates faster than the global average. Mean precipitation is also projected to change, with increases expected in North-West and South-East South America and decreases in North-East and South-West South America. Over the last three decades, the sea level has increased at a higher rate than the global mean in the South Atlantic and the subtropical North Atlantic, and at a lower rate in the East Pacific. This is expected to continue, contributing to increased coastal flooding in low-lying areas and shoreline retreat along most sandy coasts, the IPCC said.

Glacier loss and permafrost thawing will likely continue in the Andes mountain under all greenhouse gas emissions scenarios in the report, causing important reductions in river flow and potentially high-magnitude glacial lake outbursts. Aridity, and agricultural and ecological droughts – episodic water scarcity that pushes an ecosystem beyond a tipping point – are also expected to accelerate in several countries.

“Latin America has historically been a region with more limited information on climate change amid a smaller scientific community. This has led to us being unrepresented in the IPCC reports,” Maisa Rojas Corradi, a Chilean IPCC author, said. “But now we have more authors in the new report, providing information to their own communities.” Latin America accounts for 5% of global emissions, mostly from the energy sector, agriculture and land use change. But the share is rising as countries continue to develop fossil fuels. Investing in renewable energy and reducing deforestation could prevent emissions from continuing to escalate, experts say.

Last year, the 33 countries of the region allocated $318 billion to fiscal and stimulus measures to alleviate the economic impacts of the pandemic, of which only $46 billion (2%) qualifies as ‘green’, according to a new UN platform. The percentage is significantly lower than the 19% it calculates as the global average.

“The world is pushing ecosystems to their limits and they cannot continue to ignore our contributions to tackle climate change,” said Tuntiak Katan, leader of the Shuar indigeneous community in Ecuador. “Indigenous and local communities protect forests. Without us, the 1.5ºC [target] will be out of reach. Climate policies must enforce rights to our forested territories so that we can keep them standing.” (FT, IPCC and DialogoChino)

Colombia export raw marijuana flower

President Ivan Duque signed a decree lifting a prohibition on exporting dried cannabis flower, a move seen as crucial by investors. The directive also allows for the expansion of sales of cannabis-based medicines and streamlines regulatory procedures.

While Colombia has been hailed as a pioneer in regulating the possession, production, distribution, commercialization and export of seeds, plants and substances derived from cannabis – like oils, creams and extracts for medicinal purposes – investors have long complained about what they say is a tortuous export-approval process.

“This means Colombia can enter to play a big role in the international market,” Duque said after signing the decree, adding the new rules would allow Colombia’s cannabis industry to expand into food and drinks, cosmetics and other sectors.

Source: Prohibition Partners

Latin American cannabis exports could be worth $6 billion, Duque said.

“Lifting the prohibition on exporting the dry flower will start a regulatory process which we hope will be performed in great detail, to the highest international standards,” Juan Diego Alvarez, vice president of regulatory issues for cannabis producer Khiron, told Reuters.

Colombian cannabis industry association Asocolcanna urged the country to seize the opportunity to make the most of its competitive advantages.

“It’s crucial for Colombia to achieve its potential at a time when the global cannabis industry is being refined,” Asocolcanna said in a letter published on its website.

In countries where the medicinal cannabis industry has more mature regulation, like the United States, the United Kingdom, Germany and Israel, dried cannabis is the most developed sector of the market, accounting for more than 50% of all sales. (Reuters)

Brazil’s largest IPO EVER? Most likely…

Nubank is the biggest digital bank in the world by number of customers: 40 million and one of the world’s most valuable private companies. Reuters reported in June that Nubank had invited investment banks to pitch for roles in the upcoming IPO, which could value the company at more than $40 billion.

At that valuation, Nubank’s IPO would be one of the biggest ever stock market debuts of a South American company, putting it on par with other high-profile offerings such as that of online brokerage Robinhood Markets Inc, which went public in July. Nubank is expected to file for the IPO by the end of this year or early 2022, sources have told Reuters.

In June, Nubank raised $750 million in a funding round led by Berkshire Hathaway Inc, valuing it at $30 billion. (Bloomberg)

Source: Bloomberg. Note: Based on Aug. 10 close; Nubank’s valuation is based on a private fundraising.

Central banks raising rates across Latin America

Inflation has accelerated in emerging markets from India to Russia to South Africa in recent months, as companies pass on higher commodity prices to consumers, and demand picks up before supply chains are fully recovered from the pandemic. In Latin America, Brazil has raised its policy rate by 3.25 percentage points this year, Chile lifted its rate last month, as did Uruguay on Wednesday. Colombia’s central bank indicated that it may soon join the regional trend.

The most severe drought in decades, along with higher commodity prices and an economic reopening is keeping inflation well above target in Brazil. Consumer prices jumped 8.99% in July from the year prior, higher than economists forecast and above the official 3.75% target. Analysts polled by the central bank estimate consumer prices to end the year at 6.88%.

For Mexico, the Banxico raise the benchmark rate to 4.5% at Thursday’s meeting. Consumer prices rose 5.8% in July from a year earlier, nearly double the bank’s 3% target. Inflation pressure is high enough that there’s even a chance that Banxico will accelerate the pace of rate increases to half a percentage point, though a quarter-point rise is more likely, said Gabriela Siller, director of economic analysis at Grupo Financiero BASE. Mexico’s economy shrank the most in almost a century in 2020, but has rebounded faster than expected this year, allowing Banxico to start paring stimulus. (Bloomberg)

Source: Bloomberg

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