Mexican firm 99 Minutos raises $40M in Series B
Mexican last-mile delivery company, 99 Minutos, announced the closing of a series B investment round for $40 million. The round was led by the Prosus Ventures and Kaszek funds. The startup founded in 2014 will use this financing to strengthen its position in the markets in which it currently operates. The firm will also expand their logistics services to countries such as Argentina, Costa Rica, Panama and Ecuador. On the other hand, they want to offer more speed in their last-mile delivery services, in those regions that have a greater demand from consumers.
The company currently operates within 40 major markets across Mexico, Chile, Colombia, and Peru and offers four services: less than 99 minutes delivery, same-day delivery, next-day delivery, and CO2-free delivery.
What started as an e-commerce company with fast delivery quickly became a last-mile delivery service for other e-commerce companies.
“We started to build the API connections and plug-ins, and any e-commerce could add our delivery service to their business,” Founder Alexis Patjane told TechCrunch.
99 minutos makes money by charging the customer a flat fee for delivery and then offering the driver a flat rate as well, but today, the volume is so large on each route, that it’s become very lucrative.
Patjane said that initially, the company offered delivery only within Mexico City, but it quickly grew to offer its services between cities and now operates between 21 cities in Mexico.
“E-commerce is growing quickly in Latin America, but it is still early days. E-commerce penetration in Latin America is at 6%, while China is reaching 30% and the U.S. is at 20%, ”the company said in a statement. (TechCrunch)
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, Dec 2, 2020
Drought in Brazil: severe weather impacting economy
The worst drought in nearly a century has hit two key regions in Brazil and is wreaking havoc on hydroelectric dams and crops – and threatening the nascent pandemic recovery of Latin America’s biggest economy.
Months of sparse rain have shrunk rivers, left their banks cracked and parched, and reduced normally sprawling reservoirs to webs of puddles across Brazil’s southeast and central-west.
The dry spell in this large, economically crucial swathe of the country is hurting two important sectors: hydroelectric power, which Brazil depends on for nearly two-thirds of its electricity capacity, and agriculture, which has been driving its recovery from the economic rout brought by Covid-19 last year.
Source: TradingEconomics.com, Instituto Brasileiro de Geografia e Estatística (IBGE)
And there is no sign rain is coming: the southern hemisphere winter is typically dry in both regions. Experts say the drought in the south is mainly caused by La Niña, the cyclical cooling of Pacific Ocean surface temperatures.
“We’re facing a ‘dry season’ that in reality is going to last one-and-a-half to two years,” said Pedro Luiz Cortes, a professor at the University of São Paulo’s Institute for Energy and the Environment.
In the central-west, the drought is being driven by the destruction of the Amazon rainforest, experts say. Deforestation has diminished the clouds generated by the Amazon, which dump precipitation across much of South America.
The drought is hitting output at Brazil’s hydroelectric dams, most of which are located in the two regions.
Average water levels in the affected dams’ reservoirs have fallen by 32 percent.
Last week, the National Water and Sanitation Agency (ANA) declared a “critical shortage of water resources,” effective until November, for the Paraná river basin, the heart of Brazil’s hydroelectric capacity.
The move allows the agency to temporarily change water rights regulations, though it said it did not expect to implement rationing for human consumption or irrigation “for the time being.”
To boost their reserves, power plant operators would like regulators to relax requirements on how much water they must release through their dams.
But that would further lower river levels, affecting the transportation and agriculture sectors, which need the water to move boats and irrigate crops.
Keen to avoid a repeat of painful electricity rationing in 2001, President Jair Bolsonaro’s government is seeking to source more electricity from thermal power plants.
But “even combined with other sources, such as the growing wind power sector, it would be difficult for thermal plants to make up for the shortfall from hydroelectric if energy consumption increases significantly with the economic recovery,” Cortes said.
The timing could hardly be worse: Brazil’s economy, which contracted a record 4.1 percent last year, had finally returned to its pre-pandemic level with stronger-than-expected growth of 1.2 percent in the first quarter of 2021.
Now, increasing electricity prices are fuelling inflation, which economists say could sap the recovery.
Brazil’s annual inflation rate came in at 8.1 percent last month, far above the central bank’s target range of 2.25 to 5.25 percent.
Adding to price pressure, the National Electric Energy Agency (ANEEL) has imposed an additional tax of 6.24 reais (US$1.25) per kilowatt hour on consumers for June because of water shortages at hydroelectric dams – its highest extraordinary surcharge ever.
“Industry has already been hit hard by rising input costs, and increased electricity prices just add an additional challenge,” said economist Andre Braz of the Getúlio Vargas Foundation.
The drought is also hurting key farming states, at a time when the agricultural sector has been driving Brazil’s economic recovery, with growth of 5.7 percent in the first quarter.
The country’s sugar cane, coffee, orange, corn and soy crops are all under threat, driving prices higher.
Through-costs for animal feed will also push up prices for poultry and pork, said Vargas.
As if the fallout of the drought weren’t enough, epidemiologists warn Brazil may also be facing a brutal new surge of Covid-19.
“The economic recovery could be really affected,” said Sergio Vale, chief economist at MB Associados. (Bloomberg)
Chile inaugurates Latin America's first thermosolar plant
Chile on Tuesday inaugurated Latin America’s first-ever thermosolar energy plant, a vast complex dubbed Cerro Dominador in the Atacama desert that gives a boost to the country’s quest for carbon-neutrality by 2050.
In an area exceeding 700 hectares, 10,600 mirrors surround a 250-meter-high tower topped with a receiver onto which the Sun’s rays are reflected.
Molten salts in the receiver absorb the heat and are then used to generate electricity — up to 110 megawatts — by means of a steam turbine.
Source: International Energy Agency. Data as of 2019
Combined with an adjacent photovoltaic plant, the Cerro Dominador complex is capable of producing 210 megawatts of renewable energy.
A feature of the project is that the salts can store energy for up to 17.5 hours, allowing the system to continue operating without direct sunlight, and for 24 hours per day, its operators say.
“It will allow us to save more than 600,000 tons of CO2 emissions per year. That is equivalent to what 300,000 cars emit in a year,” Chilean President Sebastian Pinera said at the inauguration event.
Carbon dioxide is the most abundant of human-created greenhouse gases blamed for climate change and planet warming.
It is generated by burning carbon-based fossil fuels used in transportation and power generation, construction, deforestation, agriculture and other practices, and persists in the atmosphere and oceans for thousands of years after it is emitted.
In line with the 2015 Paris climate agreement, which seeks to hold global warming to no more than 2 degrees Celsius over pre-industrial levels, Chile pledged to make its economy carbon neutral by 2050, meaning it emits no more than it can offset through other means.
Construction of the Cerro Dominador project started in 2014 in the middle of the Atacama desert, some 3,000 meters above sea level in Chile’s warm, dry and sunny north.
Pinera said Chile would inaugurate more clean energy projects in 2021 than in all its previous history to meet the “urgent challenge” of climate change.
This will include electrifying public transport, replacing carbon-based energy with green alternatives and expanding forests which absorb CO2. (AFP)
Pedro Castillo leads election race with 98% of votes tallied
With 98% of votes tallied, Pedro Castillo is leading the Peruvian Presidential election with 50.2% of votes, versus 49.8% for his rival Keiko Fujimori. He has already claimed victory, though this hasn’t been confirmed by the electoral authority. Mr. Castillo is a former school teacher with little experience in national politics. His advisors will prove important should he be sworn in as President on July 28. Some of his advisors were recently profiled by Bloomberg in preparation for the new administration.
The nation’s stocks, bonds and currency have fluctuated wildly this week as investors try to gauge just how radical Castillo will turn out to be if he becomes president next month. That may depend on which of his advisers gains ascendancy as investors try to determine risk-premia under a Castillo Administration.
Peso strengthens and Mexican assets rally on midterm election results
- Mexico’s ruling party loses its supermajority in the Chamber of Deputies following Sunday’s midterms elections
- Congress new composition will complicate President López Obrador’s plan to enact market unfriendly constitutional reforms
- Receding political risks may support the Mexican peso in the short term, pushing the USD/MXN to lows not seen since early 2020
Mexico’s peso hit a four-week high and was set for its best session since mid-May, although it weakened slightly following the announcement of Rogelio Ramírez yesterday as his new Finance Minister. The election outcomes seems to assuaging some investor fears as President Andres Manuel Lopez Obrador’s MORENA party lost some of its majority. This will complicate AMLO’s ability to push through more wide sweeping constitutional changes to market friendly policies. Monday’s gains helped the peso wipe away its losses this year and move up 0.6%.