Nuvemshop becomes Brazil’s latest unicorn

This week Brazilian e-commerce leader, Nuvemshop, announced a $500M Series E. This is just five months after the firm’s $90 million Series D financing. Reuters and Techcrunch report this newest round values the company at $3.1 billion and brings Nuvemshop’s total funding in the last 10 months to more than $620 million.

The round was co-led by Insight Partners and Tiger Global Management, with significant participation from Alkeon and Owl Rock. Other investors that joined the round included Sunley House Capital and VMG Partners, as well as existing investors Accel, Kaszek, Kevin Efrusy, Qualcomm Ventures LLC, and ThornTree Capital.

Nuvemshop (also known as Tiendanube in Spanish speaking countries) empowers entrepreneurs to build and grow thriving online businesses.

Nuvemshop’s platform serves more than 90,000 merchants across Brazil, Mexico, and Argentina, ranging from direct-to-consumer (DTC) upstarts to an expanding roster of dominant brands such as PlayMobil, Billabong, Colombraro, Zaira Beauty, Osram, Lolja, Vitabe and StrappyCo. Today’s funding will help accelerate the company’s growth in current markets and support the company’s geographic expansion into new countries, including Colombia, Chile and Perú.

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.

Despite the enormous addressable market, e-commerce in Latin America still represents only about 6 percent of retail sales in the region, compared with 30 percent or more in some other parts of the world. Nuvemshop projects the penetration rate will reach 60 percent over the next decade as smartphone usage continues to grow, digital banking increases, and logistics infrastructure improves. Furthermore, the pandemic year has become a dramatic accelerator for e-commerce and fintech products.

In addition to geographic expansion, the funding will help Nuvemshop accelerate its payment and logistics capabilities, which will further drive e-commerce penetration in the region. In order to accelerate these capabilities, the company also plans to use its new funds for M&A opportunities. (Reuters, Techcrunch, prnewswire).

IEA highlights Hydrogen’s role in a net-zero Latin America

IEA’s latest research analyzes both the region’s potential to play a major role in the future low-carbon hydrogen landscape, and the role that low-carbon hydrogen could play in Latin America’s own clean energy transitions. Low-carbon hydrogen deployment depends on many technologies that are still under development, and considerable cost reductions will be needed to enable it to reduce global emissions in applications that may not be suitable for director electrification. The next decade will be crucial for the long-term promise of low-carbon hydrogen in Latin America, and much can be done today to develop and demonstrate emerging technologies and prepare the ground for their future scaling up.

The conclusion is 6 suggestions for policy makers:

  • Define a long-term vision for hydrogen in the energy system.
  • Identify near-term opportunities and support initial deployment of key technologies.
  • Support early financing schemes and reduce investment risk.
  • Focus on R&D and skills to reap benefits beyond emission reductions.
  • Use certification schemes to incentivize the production of low-carbon hydrogen and create market opportunities.
  • Co‑operate regionally and internationally to position Latin America in the global hydrogen landscape.

Source: IEA

Millicom lays out ambitious plan to scale Tigo Money

Millicom, one of Latin America’s largest telecom carriers, is betting big on wider adoption of QR codes and an imminent deal with one of the world’s top payment-processing networks.

In speaking with Bloomberg, Mauricio Ramos, chief executive officer of the telecom company said “In our markets, more than 70% of the people do not have access to a real financial system, we are talking about financial inclusion, the possibility of taking (the digital wallet) to all businesses via deals with Visa or Mastercard.”

Tigo Money, operating in El Salvador, Bolivia, Guatemala and Honduras, aims to make QR code payments available to more customers. An expansion into Nicaragua and Panama is in the works for 2022, Ramos said. The company will drive its financial services growth from its new hub in Panama, where the company just announced a $250 million investment.

Tigo Money is ready to embrace El Salvador’s currency switch to Bitcoin, Ramos said, a move that may give the company room to explore the potential of the crypto world. Millicom has 1 million Tigo Money customers in the Central American nation who, like consumers in neighboring Guatemala, Honduras and Nicaragua, depend heavily on remittances flows.

The company reported 45% growth in operating profit in the second quarter as revenue increased 12% to $1.09 billion. (Bloomberg)

Source: Contxto based on Statista data

Source: KoreFusion, 2020 LATAM Fintech Report, summer 2020

Peru announces rate hike

For the first time in five years, Peru’s central bank raised its benchmark interest rate to 0.5% from 0.25%. Like many other Latin American nations the Andean country faces rising inflation. The central bank also said in a statement that 12-month inflation expectations in July rose to 3%, from a previous estimate of 2.6% a month ago.

Since President Pedro Castillo was sworn in July 28, the nation’s sol has weakened the most among more than 140 currencies tracked by Bloomberg, while bonds and stocks also dropped. (Reuters, Bloomberg)

Note: Mapped data show rate changes for distinct central banks. Source: Bloomberg

Extreme weather in Brazil rattles commodity markets

On the heels of the century’s worst drought, temperatures fell in swathes of Brazil these past weeks – with rare snowfall overnight in some places – as a polar air mass advanced toward the center-south threatening coffee, sugarcane and orange crops with frosts.

A lack of rainfall that has parched soils across southern and central states, home to much of the country’s farming output, has been linked by some scientists to destruction of the Amazon rainforest.

As mentioned in the Financial Times, “By deforesting part of the region, you are removing humidity that helps in the formation of rains in the centre-west, south-east and south [of Brazil],” said Lincoln Muniz Alves, a researcher at the National Institute for Space Research (INPE) who contributed to last week’s UN landmark report on climate change.

Compounding the dryness, an unusual succession of polar air masses have moved over swaths of territory in recent weeks, pushing the temperature below zero in some places. Agricultural experts are increasingly worried that the recurrence of La Niña could extend the drought conditions into the new year. They fear this could disrupt the flowering of coffee trees, already weakened by drought and frost.

These extreme weather conditions are causing price swings and spikes across commodities markets especially sugar, coffee and corn which Brazil is one of the largest exporters. (Reuters, FinancialTimes)

Chart: Pete Evans / CBC – Source: Bloomberg

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