Chilean Health InsurTech, BetterFly, raises $60 Million

Santiago, Chile-based Betterfly has raised a $60 million Series B from partners of DST Global, QED Investors, Valor Capital, Endeavor Catalyst and SoftBank‘s Latin America Fund. Betterfly, which provides insurance and an employee engagement, wellbeing and social impact platform, plans to use the funds in part to expand into Brazil and other Latin American countries. The startup raised around $18 million for its Series A.

Betterfly describes itself as an insurance technology, or “insurtech” company. It provides a digital benefits platform for companies to reward employees’ healthy habits with life insurance that grows at no cost and the option of donating to different causes. Among the benefits it provides are telemedicine, mental health, exercise programs, nutrition advice and financial education.

Betterfly has more than 300 firms as customers and charges 2,990 pesos (about $4) per company employee that joins its program, chief executive officer Eduardo Della Magiora said in an interview.

Betterfly has posted strong growth during the coronavirus outbreak as companies pay closer attention to taking care of the wellbeing of their workers. Betterfly began the pandemic with about 20 employees and now has 130. That figure should climb to 150 soon. (Bloomberg, Pitchbook)

 

Warren Buffet’s $500M NuBank Stake

Last week Brazilian digital bank Nubank raised $500 million from Warren Buffet’s Berkshire Hathaway firm, part of a $750 million extension to its Series G funding round.

This new investment takes Nubank’s total raised in its Series G to $1.15 billion – the largest private capital raise by a technology company in Latin America. According to Reuters, it takes the 2013-founded company to a valuation of $30 billion.

Nubank is one of the world’s biggest all-digital lenders, with 40 million users in Latin America. This is huge news for Latin America fintech not only because of the enormous round but also because of what the “Oracle of Omaha” is signaling to the broader market with this bold allocation. Mr. Buffet and Berkshire focus on a few sectors, where there is a clear competitive advantage and holds the positions for a long time – generating 20% annual returns since 1965.

As reported by Bloomberg, for decades, financial institutions were Mr. Buffett’s bread and butter, with stakes in lenders, insurers and credit-card companies. That changed last year, when Berkshire dumped 84% of its holdings in Goldman Sachs Group Inc. and pared its stakes in Wells Fargo & Co. and JPMorgan Chase & Co. Berkshire’s investment portfolio 1 had just over 23.6% of its fair value concentrated in financial firms, including banks, at the end of 2020, down from 41% in 2019.

Mr. Buffet who also owns a 4% stake in Brazilian payments giant Stone appears to realize the potential that financial technology firms have in Latin America, and other select emerging markets, to leapfrog incumbents. Savvy investors realize the potential for digital natives to thrive in markets with big populations, high levels of unbanked people, cash-based economies, inefficiencies, high interest rates and very attractive margins. This push into digital is most likely a Todd Combs play, who will succeed Mr. Buffet, as he continues to position the portfolio more aggresively for secular growth.

Brazil’s Nubank competes with the big lenders in terms of volumes. It had more than 57 million downloads, while annualized revenue between 2017 and 2020 grew over 100%, according to Goldman Sachs analysts. Its app-based, no-fee credit card for the urban middle class was key to that success. Yet digital banks are not able to eliminate competition completely. Nubank itself relies on big lenders for credit lines which are controlled by the large incumbents. (Bloomberg)

Source: CBInsights, data as of March 2021

World Economic Forum's Technology Pioneers of 2021

  • One hundred up-and-coming tech companies have just become World Economic Forum Technology Pioneers
  • This year’s group include leaders in cybersecurity and robotics, as well as others using artificial intelligence to address gaps in healthcare and financial access
  • El Salvador, Ethiopia and Zimbabwe are presented for the first time, while more than 30% of the selected companies are led by women

From artificial intelligence to healthcare to fintech, the latest group of World Economic Forum Technology Pioneers blends entrepreneurial spirit with science and engineering to tackle global problems head on.

The 2021 cohort of young and growing tech companies includes “many future headline makers at the forefront of their industries,” says Susan Nesbitt, Head of the Forum’s Global Innovators Community, which will facilitate workshops and high-level discussions for the pioneers over the next two years. The social innovators are selected for being cutting-edge players with “great potential to not only shake up their industries but offer real solutions to global problems,” she explains. (WEF)

 

The 2021 Technology Pioneers include

Following their selection as Technology Pioneers, this year’s companies will join an impressive group of alumni that include many household names, such as Airbnb, Google, Kickstarter, Mozilla, Palantir Technologies, Spotify, TransferWise, Twitter and Wikimedia. (WorldEconomicForum)

IDB launches challenge on silver economy in Latin America and the Caribbean

The IDB has launched an initiative aimed at finding and supporting innovative solutions that facilitate the growing population of seniors to become an engine of social inclusion and economic recovery in the Latin American and the Caribbean.

The IDB said the “Challenge on Silver Economy in Latin America and the Caribbean” aims to turn ageing into an engine of social inclusion and economic recovery and that it is working with its innovation laboratory, IDB Lab, on the project.

The Washington-based financial institution said that proposals must have a focus on the poor and vulnerable ageing population and be implemented in one or more of the borrowing member countries of the IDB.

It said, currently, Latin America and the Caribbean is the fastest ageing region in the world. The vulnerability to which those over 60 have been exposed as a result of the coronavirus (COVID-19) pandemic has only underscored the challenge of responding to the growing demand for pension benefits, health services, and dependent services, the IDB added.

However, the IDB noted that the great challenges that an ageing population brings, also comes with opportunities for economic development with a generation of new enterprises and the creation of more and better jobs for the entire population, including opportunities for seniors.

The Silver Economy also has important implications for gender equity, given that women live longer and bar most of the burden of the unpaid domestic labour associated with caring for dependent seniors.

“Latin America and the Caribbean has to be prepared with innovative solutions so that both governments and the private sector can meet the needs of older adults while promoting economic recovery and delivering inclusive social services,” said Marcelo Cabrol, Manager of IDB’s Social Sector.

The Silver Economy Innovation for Inclusion Challenge, calls for the participation of business models with innovative solutions ready to be implemented in the areas of health services and long-term care, financial services and products, employment and training, and housing and transportation (mobility).

“Today there are more than 80 million people over 60 years of age in the region and in 30 years it is expected that there will be almost 200 million. This is the time to prepare for this rapid demographic change. Focusing on this new reality will be one of the most strategic issues for the IDB Group in the coming years,” says Irene Arias, the chief executive officer of IDB Lab. (IDBLabs)

Source: Katharina Fenz, World Data Lab

First circular economy hub in Latin America

Created to boost the implementation of circular business models between different-sized and multisectoral enterprises, the Brazilian Circular Economy Hub (Hub-EC) is the first of its kind in Latin America, based on European models and adapted to the country’s reality. Led by Exchange 4 Change Brasil (E4CB), an organization that guides this paradigm-shift in Brazil, the hub has sixteen member- companies and has structured four working groups aimed at discussing key members’ demands in an integrated format, promoting new partnership models and redesigning value chains. Global companies, such as Nespresso, Electrolux, Gerdau and Tomra are among the member-companies.

The Hub-EC was launched in January 2020 and, since then, E4CB has organized 3 international knowledge exchange webinars, reaching out to an audience of more than 15 different countries. It also has provided tailored made circular assessment to their members and has facilitated round table discussions among the participants and guests. The discussions are meant to influence the circular mindset, identify common areas of interest, and facilitate negotiations to re-design industrial processes and promote new commercial relationships. The four working groups are: New Plastic Film Supply Chains; Reverse Logistics for White Goods; Application of recycled resin in high quality products; and Circular Design. Member-companies will work together to implement pilot projects and validate the circular business advantage.

For the founder of E4CB and director of Hub-EC Beatriz Luz, this kind of hub aimed at bringing companies together to discuss joint solutions is even more important in Latin America, due to the lack of a collaborative culture, no sense of urgency and low governmental support: “In Europe, circular economy is already a number one priority, with dedicated public policies, a number of public-private partnerships already in place and financial incentives towards circular business models. The linear risks are more visible to companies in Europe, which makes it easier for them to collaborate in the region. The political framework in Latin America is different, which makes global companies act differently in those countries to what they do in Europe. However, this sense of urgency is starting to be spread globally and initiatives such as the Brazilian Circular Economy Hub will guide the way, pointing at the risks of keeping the ‘business as usual’”. (Brazilian Circular Economy Club)

Source: The circular economy in Latin America and the Caribbean. Chatam House, Sep 2020.

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