Ontop, HR technology startup, raises $4.5 million seed

This week Ontop, the Colombian startup providing regional corporate onboarding, tax processing and payroll management for gig workers, raised $4.5 million in seed funding. The firm works with companies, like Rappi, to hire legally and pay anyone in the world. The firm believes itself to be building the infrastructure for the future of work in Latin America.

“We were born in the middle of the pandemic when remote work was exploding and evolving in ways where emerging countries became clusters of talent for developing markets,” Santiago Aparicio, co-founder and CEO told Crunchbase News. “We have been seeing this for a while in countries like Colombia and Argentina, and it is here to stay. International hiring is happening, but it is not connecting people hired for talent. There are still local regulations and currency divergences. We built Ontop so that someone can hire and pay someone with a click of a button.”

Point72 Ventures led the investment and was joined by Funders Club, ClockTower Technology Ventures, H2O Capital, Magma Partners, SOMA Capital and Supernode, as well as angel investors.

Aparicio and Julian Torres co-founded the company in 2020 to streamline contract creation, signing, compliance document collection and payments so that small and medium-sized companies can hire Latin American talent. At the same time, it provides workers access to remote opportunities with companies in the U.S., Europe and Asia.

Ontop intends to use the new funding to roll out additional payments and banking capabilities for contractors in the region, including the option to maintain account balances in different currencies. The company’s onboarding process takes roughly seven minutes, and companies can start paying right away, and in most cases, it will be same-day payments.

Source: Statista

“Not only will it enable workers to earn in U.S. dollars, if they want, they will also be able to invest in U.S. markets,” Aparicio said. “We are going to start in Latin America, but some of the biggest fintech banks and neobanks are coming out of emerging economies which has us pumped.”

For Ontop, growth “has been explosive,” as a result of the tailwinds from remote work, Aparicio said. Eight months since its launch, the company has achieved milestones including nearly $1 million in monthly revenue due to hiring of international talent by technology companies, he added.

Next up for the company is creating a credit card that will enable workers to save and spend directly from the card without having to wire local money into accounts.

Meanwhile, Pete Casella, partner at Point72 Ventures who specializes in fintech and financial services, said over the past few years, distribution of financial services has happened through the human resources technology stack.

While companies want to be able to hire from different countries, it is not always easy to understand local payment methods and tax codes. This is where Ontop shines, he said.

“They have the ability to act locally in markets they operate, so U.S. companies can take advantage without having to deal with local nuances for operating in the country,” Casella said. “Ontop understands how to take advantage of gig workers globally, which is a massive trend, to allow U.S. or international companies to take advantage of the growing talent coming out of Latin America.” (Crunchbase)

Leaf coalition finances tropical forest protection

A new public-private initiative will provide $1 billion in financing to countries that protect their tropical forests

  • The US, UK and Norwegian governments have teamed up with global businesses such as Amazon, GSK and Nestlé in an attempt to end deforestation.
  • Destruction of primary rainforests increased by 12% from 2019 to 2020, with the world losing over 4.2 million hectares of forest cover last year.
  • The Lowering Emissions by Accelerating Forest finance (LEAF) Coalition will also benefit billions of people who depend on tropical forests for their livelihoods.

Governments and global companies have joined forces as part of the appropriately-named LEAF Coalition to mobilize $1 billion in financing to protect the world’s tropical forests.

The Lowering Emissions by Accelerating Forest finance (LEAF) Coalition is an ambitious public-private initiative that aims to hasten climate action by providing results-based finance to countries that protect their tropical and subtropical forests.

It will see the governments of Norway, the UK and the US work with businesses including Amazon, Airbnb, Bayer, Boston Consulting Group, GSK, McKinsey, Nestlé, Salesforce and Unilever to support high-quality emissions reductions in an attempt to bring an end to deforestation.

The initiative will also benefit billions of people who depend on tropical forests, while supporting sustainable development.

Tropical forests absorb carbon from the atmosphere, so ending their deforestation is key for meeting global climate, biodiversity and sustainable development goals.

However, such forests are under threat with destruction of primary rainforests having increased by 12% from 2019 to 2020, and the world losing more than 4.2 million hectares of tropical forest cover last year alone. Their protection could provide nearly a quarter of cost-effective mitigation by 2030.

“There is no path to limit global warming to 1.5°C and meet the Paris Agreement without stopping tropical deforestation by 2030,” said Forum Founder and Executive Chairman Klaus Schwab. “The LEAF Coalition is a big step forward to provide real economic incentives for high ambition countries to protect and restore their forests.”

The LEAF Coalition empowers tropical and subtropical countries to accelerate efforts to end deforestation, while supporting them in achieving nationally determined contributions (NDCs) under the Paris Agreement.

Once a country or jurisdiction reduces deforestation and forest degradation, or restores forests, the emission reductions are verified and issued according to the ART/TREES standard.

Payments are then made according to fund management best practice, enabling countries to set a course for sustainable economic development that conserves and restores forests, while supporting local communities and livelihoods.

Notes: The Lowering Emissions by Accelerating Forest finance (LEAF) Coalition is working with a number of governments and large companies. Source: LEAF, WEF.

US non-profit Emergent will act as LEAF’s administrative coordinator and also provide a platform to facilitate transactions. The final list of countries and companies participating in the scheme will be announced when emissions reduction purchase agreements are signed with tropical forest nations by the end of 2021.

Ensuring the full participation of local communities, indigenous people and other relevant stakeholders will be key to LEAF’s success. Guyana Vice President Bharrat Jagdeo welcomed the initiative, saying it would enable forest countries to create new opportunities.

But he added: “If this new economy is to be more attractive than the old economy, LEAF must also catalyze funds that flow quickly and efficiently. The systems to enable this can only be successful if forest countries are involved in their design – and we stand ready to work with the LEAF Coalition to achieve the innovation required.”

Amazon CEO and Co-Founder Jeff Bezos is hopeful that, “in uniting behind a common cause, the countries and companies of the coalition have a chance to end deforestation by 2030.” (WorldEconomicForum)

As Chile heads to the polls questions linger about free-market pension model

Chile is heading to the polls once more, after a national plebiscite last year resulted in a mandate for a new constitution. Across two days on May 15 and 16, Chileans will elect the 155 people who will draft the constitution, replacing the current document drafted under Gen. Augusto Pinochet’s dictatorship in 1980. This will be the first time in Chile’s history that it has had the opportunity to draft a constitution through a fully democratic, participatory process. Over the weekend, Chileans will also be casting ballots to elect regional governors for the first time ever—part of an ongoing battle to decentralize the country—and councilors and mayors will also be chosen.

Despite longtime discontent with the political system, a new constitution only became politically viable less than two years ago. As nationwide protests rocked the country in late 2019, the government agreed to hold a referendum on a new constitution at a meeting of party leaders in the small hours of Nov. 15. When the vote was eventually held on Oct. 25, 2020, 78 percent of those who voted were in favor of replacing the Pinochet-era document.

“This is the culmination of a political crisis that had been a long time coming,” said Claudia Heiss, the head of political science at the University of Chile. “An increase in participation puts an end to a binomial era [since the return to democracy] in which Chile was ruled by two coalitions with high governability but low representation.”

Some 1,468 candidates are running to be part of the assembly, a significant percentage of whom are independents, representing a wide range of interests and agendas. Several prominent figures from Chile’s conservative bloc are also running—many despite campaigning strongly against writing a new constitution in last October’s referendum.

Many Chileans are hopeful that the constitutional process can provide the answers traditional politics has been unable to. The current document was drafted by a handpicked team of Pinochet’s confidants, led by lawyer Jaime Guzmán. It was ratified by a questionable referendum in which the opposition’s campaign airtime was severely limited and state agents voted multiple times in its favor.

The route to reform has been circuitous and hard-fought. Although the 1980 constitution has been altered several times, most notably via a 1989 referendum and again in 2005 by President Ricardo Lagos, popular support has been building toward replacing it altogether for years.

Source: Superintendencia de Pensiones de Chile

Source: Superintendencia de Banca,Seguros y AFP, República de Perú

While some are optimistic that a new constitution could relieve some discontent over the current political and economic structures many fear the undoing of a largely successful free-market pension model. Chileans have taken out more than $30 billion from their retirement savings in the past year and congress has authorized a third wave of withdrawals that could drive the figure to more than $50 billion. That would leave the pension funds with about $180 billion of equities and fixed-income assets. Many lawmakers are now calling for the whole system to be dismantled. With the potential of a fourth withdrawal in addition to other changes to the system, including a royalty tax on Chile’s giant copper industry and a levy on the super-rich investors and many Chileans worry for the future of the economy, bond markets the and AFPs. (ForeignPolicy, Bloomberg)

Less LATAM Hotel Construction – Does this mean more opportunities for lodging marketplaces?

According to Lodging Econometrics’ (LE) Construction Pipeline Trend Report for Q1 2021, the Latin America Hotel Construction Pipeline stands at 604 projects/104,275 rooms, down 14% by projects and 16% by rooms, year-over-year (YOY). These are the lowest project and room counts seen in the region since Q2 2012.

Countries in Latin America continue to feel the impact of the coronavirus pandemic, with many countries enduring high outbreak rates and new variants. Government organizations and health associations throughout the region are working to decrease case numbers by increasing vaccine campaign efforts and dose deliveries, toward higher vaccination rates and the goal of herd immunity.

Source: Statista

As of May 10, 10.88% of Mexican residents have received at least one dose of a vaccine and 7.23% of residents are fully vaccinated. Chile is the country with the highest COVID-19 vaccination rate reported in the Latin America region, with 44.69% partially vaccinated and 37.33% residents fully vaccinated.

Projects currently under construction ended Q1 ’21 at 323 projects/60,332 rooms. The number of projects in this stage remains unchanged YOY, however, it does show a 5% increase in rooms. Projects scheduled to start construction in the next 12 months saw an 11% decrease YOY, but a slight increase since Q4 ’20, totaling 181 projects/27,773 rooms. Projects in the early planning stage experienced a 43% decline YOY, standing at 100 projects, accounting for 16,170 rooms.

Throughout the past four quarters, 56 new hotels/10,806 rooms opened in Latin America. This is the fewest number of openings the region has seen in this real estate cycle, with 15 of the 56 openings occurring in the first quarter of 2021. This brings the count of open and operating hotels in Latin America to 11,202 hotels/1,183,365 rooms. LE is forecasting 95 projects/16,781 rooms to open by year-end 2021 and 124 projects/20,027 rooms to open in 2022.

The top five countries for hotel construction in Latin America are Mexico, with 215 projects/37,786 rooms. Brazil follows with 114 projects/17,449 rooms, a record low for this country in project and room numbers. Next is Peru with 38 projects/4,978 rooms, then the Dominican Republic with 24 projects/4,972 rooms and Cuba stands at 19 projects/6,703 rooms.

Cities in Latin America with the largest pipelines include Lima with 28 projects/4,052 rooms; Mexico City with 24 projects/3,584 rooms; Guadalajara, Mexico with 20 projects/2,803 rooms; Cancun, Mexico with 16 projects/8,969 rooms; and Sao Paulo, Brazil with 14 projects/2,443 rooms.

Hotel franchise companies with the largest construction pipelines in Latin America are Marriott International with 103 projects/16,245 rooms, Hilton at a record high 98 projects/14,090 rooms, Accor with 96 projects/12,666 rooms, and InterContinental Hotels Group (IHG) with 58 projects/6,792 rooms.

Leading brands in the pipeline are Accor’s Ibis Hotels with 66 projects/8,476 rooms. Hilton Garden Inn follows, with 26 projects/3,622 rooms; next is Hampton by Hilton with 24 projects/2,863 rooms.

Could this potentially open possibilities for more regional or global lodging marketplaces as LATAM tourism positions itself for recovery? Things to consider as many Latin American nations are taking big bets on the growth of travel as they consider new more sustainable approaches to economic growth. (HotelBusiness)

Peruvian bonds recover as leftist lead shrinks

Peru’s dollar bonds erased last month’s losses as the sol heads for its biggest advance in five years with presidential polls reflecting a shrinking lead for the leftist frontrunner feared by investors.

The nation’s dollar-denominated debt due in 2031 surged to 101 cents on the dollar Monday, their highest level since Pedro Castillo unexpectedly won the first round of the nation’s presidential election last month. The sol rallied the most among more than 140 currencies tracked by Bloomberg.

Pollster CPI found that Castillo’s lead over former lawmaker Keiko Fujimori has narrowed to 2.4 percentage points, which is within the margin of error, according to the survey published Monday by RPP Noticias. Last month, some polls showed Castillo with a lead of as much as 20 percentage points.

Peruvian assets have broadly recovered losses as Castillo’s advantage diminishes. The cost of insuring the country’s debt against default over the next five years declined by 14 basis points since peaking on April 27. Local currency debt due in 10 years has climbed 6 cents over the last two weeks and the nation’s benchmark stock index is at a three-week high.

“The presidential race remains wide open but just the fact that Fujimori is closing the gap means that she is increasing her chances of winning, plus is forcing Castillo to have a less radical discourse,” said William Snead, a strategist at BBVA in New York, in an interview. Snead last week recommended buying Peru’s debt.

Castillo, a former schoolteacher has spooked investors by proposing to rewrite the constitution, exercise more state control over “strategic industries” and redistribute wealth. Since winning the first-round of the election last month, he has sought to distance himself from the Marxist politics of his party. The election is scheduled for June 6.

As well as reflecting Fujimori’s improved chances of winning, the rally may also reflect a calculation that Castillo would have trouble implementing a radical agenda, they wrote in a note Monday.

The new poll found that Castillo has 34.2% of voter intention versus 32% for Fujimori. Their previous poll published April 20 gave Castillo a 13 percentage-point lead.

Even so, the poll found that 18.5% respondents said they planned to cast blank ballots and 15.3% are still undecided. The poll surveyed 1,600 people from May 6-8 and has a margin of error of plus minus 2.5 percentage points. (Bloomberg)

Source: Bloomberg

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