C-commerce startup Yalo raises $50 Million

Facebook has long been working on raising WhatsApp’s profile as a channel for businesses to interact with and sell to their customers. This week, a startup that has built a suite of tools for retailers and others to build and run those services over WhatsApp and other messaging platforms is announcing growth funding to address that opportunity.

Yalo, which describes itself as a c-commerce (“chat commerce”) startup building tools for businesses to use messaging apps as part of their customer outreach and sales strategies, has raised $50 million to expand its services with a specific focus on emerging markets like Latin America and Southeast Asia.

For many we need to start by defining what is c-commerce anyway? Collaborative commerce (c-commerce) describes electronically enabled business interactions among an enterprise’s internal personnel, business partners and customers. This so-called trading community could be an industry, industry segment, supply chain or supply chain segment.

Yalo already counts big brands like Unilever, Nestle, Coca-Cola and Walmart among the customers using its platform for sales and marketing efforts. In total that speaks to potentially an audience of 350 million, although Yalo doesn’t disclose how many people are actually using its services.

Why do we love C-commerce for Latin America

The emerging market focus for Yalo seems to mirror the role that messaging and mobile have taken in these markets overall. In many cases, consumers in developing economies skipped straight over using traditional computers and went online for the first time with cheap smartphones. As a result, that paved the way for consumers, whose digital consumption was more focused on mobile screens, to being more receptive and likely to use messaging apps for more than just messaging. (TechCrunch)

Blockchain quantifies impact in Chilean energy industry

Chile is rolling out a blockchain-based platform to track renewable energy, giving miners in the top copper nation more scope to show their green credentials to buyers.

The country’s electricity coordinator CEN has started a program called Renova to track each megawatt hour of renewable power from when it’s generated until it’s consumed. By etching this data into the blockchain, the goal is to ensure end users get the clean power they paid for.

While global electrification is boosting demand for the metal used in wiring, mining companies are also under mounting pressure to reduce their carbon emissions. Producers such as BHP Group and Anglo American Plc are procuring renewable energy for their mines in Chile, where the solar and wind power industries are booming.

“This platform allows us to quickly enable an accreditation showing the copper is actually green,” CEN President Juan Carlos Olmedo said in an interview.”

The platform will play a role in Chile’s efforts to be carbon neutral by 2050, Olmedo said. Without a centralized registry, there’s a risk generators could sell duplicate contracts or certificates would be counted twice, meaning less clean energy would be in use than expected.

For miners, the platform is yet another tool to meet sustainability targets. Industry giants have started eyeing green hydrogen — obtained by stripping the gas from water using electrolyzers powered by wind and solar — as a replacement for diesel. In time, Renova will be able to issue certificates verifying the hydrogen being purchased is actually green, Olmedo said.

“The granular traceability and audit trails that blockchain can support is especially useful for companies that are working to reach net-zero goals,” said Amanda Ahl, an analyst at BloombergNEF focusing on emerging technologies for the energy sector. “This can be one part of the solution ensuring corporate sustainable goals are on track by verifying emission reduction claims.” (Bloomberg)

Data as of 2019. Source: International Energy Agency

Another Fintech Unicorn eyes an IPO in Brazil

Brazilian unicorn Ebanx SA kicked off preparations for a potential U.S. listing as the fintech moves ahead with an ambitious plan to expand its payment processing solutions across Latin America, including a new platform integrating cross-border and local transactions.

The so-called Ebanx One, which combines different payment methods into a single system, pledging to unwrap red tape for both international and local customers in the region, is a major step toward an initial public offering, most likely in the U.S., Chief Executive Officer and co-founder Joao Del Valle said.

“We haven’t set a date yet, but we are taking this IPO readiness project very seriously, and Ebanx One is at the core of our business value,” Del Valle said in an interview, without disclosing whether the company has already hired investment banks to coordinate the future share offering.

The Curitiba-based firm, which handles online payments for major tech firms such as Uber Technologies Inc, Airbnb Inc and Spotify Technology SA in Latin America, also sees room for more mergers and acquisitions deals to accelerate growth in key markets in the region, according to Del Valle.

In January, Ebanx acquired a 30% stake in Brazilian lender Topazio, which is authorized to operate in the currency market, in order to ease payment processing for international customers. Terms were not disclosed.

“We will not wait for the IPO to make another move,” he added, citing plans for another private funding round this year. The last time Ebanx raised money was in 2019, when it was valued at over $1 billion after a second round of investments by U.S. private equity firm FTV Capital.

 

“Our goal is to be seen as a gateway to LatAm markets for huge companies,” Del Valle said. By the end of June, Ebanx will be operating in 15 countries in region, of which Brazil, Mexico and Colombia are currently the biggest operations.

 

In 2020, the fintech processed 145 million transactions, a volume 38% higher than in 2019. Growth outside Brazil has been even stronger lately, surpassing 200% last year as the coronavirus pandemic fuels a shift to e-commerce, online entertainment and other digital services. (Bloomberg)

Note: Despegar is included as one of the companies that worth over $1B, even though its market cap as of December 31st 2020 was $0.98 because the company was valued at more than $1B for most of the period between its IPO in 2017 and 2020 when COVID crisis interrupted international travel. 

Source: Surfing Tsunamis, Tecnolatinas, LAVCA, Crunchbase, Pitchbook, Techcrunch, Research Report and Media Reports.

BAML remains bullish on Dominican Republic

Key takeaways

  • Given the weight of the evidence – mainly, stronger-than-expected growth and positive fiscal surprise – BAML remains bullish.
  • BAML revised up the GDP growth forecast for 2021 to 10%, from 7.9%. Inflation and current account are escape valves.
  • On tax reform, BAML disagrees with the narrative that government is backing down. They seem determined to break debt inertia.

 

In the latest research piece BAML forecasts that the GDP growth of the Dominican economy will be significantly higher than consensus for 2021. Given the strong sequential expansion in Q1, 3.5% qoq (seasonally-adjusted by the central bank), BAML believes there is quite a large carry over effect for the rest of the year.

 

BAML is raising the 2021 forecast for GDP growth to 10% (up from 7.9%), and 4.7% for 2022 (up from 4.2%). This stronger-than-expected growth is having spillovers across the economy. Fiscal revenues are above budget projections. The current account deficit is widening because of more absorption. And inflation is among the highest at the Latam level, evidently driven by commodity prices but also due to the smaller amount of slack in the economy vis-a-vis the majority of Latam countries.

 

There was also pleasant news on the fiscal side as BAML writes the fiscal deficit has narrowed meaningfully in 2021. In his speech last week, President Abinader mentioned that revenues are 24% above projections. The Ministry of Finance publishes a weekly fiscal report – for a narrow definition of the central government – which shows that in the first four months of 2021, there was a primary surplus of DOP 63.5 bn (0.5% of GDP) and an overall surplus of 

DOP 23.4 bn (1.3% of GDP). Revenues are up 29.5% yoy, and expenditures are down -0.9% yoy. (BAML Research)

WeWork and Softbank LatAm Fund announce JV

SoftBank Latin America Fund now has the exclusive right to operate the WeWork brand in Argentina, Brazil, Chile, Colombia, and Mexico.

Softbank will take over WeWork‘s Latin American operation and Uber‘s CEO in Brazil, Claudia Woods, will lead the new operation. Through the new joint venture, SoftBank Latin America Fund now has the exclusive right to operate the WeWork brand in Argentina, Brazil, Chile, Colombia, and Mexico.

“As WeWork continues to optimize its business around the world, working with a local partner in the Latin America region positions the company toward continued and sustainable growth in the region,” the office-sharing startup said in a press release.

We see demand for flexible space as one of the many megatrends fueled by the aftermath of COVID. Partnering with WeWork is a great opportunity to invest in that trend, and we can bring our existing ecosystem to bear to help grow the business. Recently it was announced that 50% of US-adults are vaccinated and many companies are looking at the future of workspace. WeWork is a real option for companies who are looking for a hybrid model,” he said.

The company started to have pre-COVID occupancy levels in the U.S, and SoftBank believes that this trend will continue in many parts of the world, including Latin America.

According to WeWork, over the past four months, the Latin American market has seen “double-digit growth” in shared office occupancy, reaching nearly 50%, as companies in the region adopt flexible work solutions. In Q1 2021, WeWork reported sequential month-over-month membership growth globally and said it achieved positive net sales and positive net membership gains for the first time since February 2020.

WeWork also said it continues to see sales strength extend into April and May, but reported a net loss of $2.06 billion in the first quarter due to restructuring expenses as it prepares to go public through a SPAC. (LABS)

SoftBank Latin America Fund now has the exclusive right to operate the WeWork brand in Argentina, Brazil, Chile, Colombia, and Mexico.

Softbank will take over WeWork‘s Latin American operation and Uber‘s CEO in Brazil, Claudia Woods, will lead the new operation. Through the new joint venture, SoftBank Latin America Fund now has the exclusive right to operate the WeWork brand in Argentina, Brazil, Chile, Colombia, and Mexico.

“As WeWork continues to optimize its business around the world, working with a local partner in the Latin America region positions the company toward continued and sustainable growth in the region,” the office-sharing startup said in a press release.

We see demand for flexible space as one of the many megatrends fueled by the aftermath of COVID. Partnering with WeWork is a great opportunity to invest in that trend, and we can bring our existing ecosystem to bear to help grow the business. Recently it was announced that 50% of US-adults are vaccinated and many companies are looking at the future of workspace. WeWork is a real option for companies who are looking for a hybrid model,” he said.

The company started to have pre-COVID occupancy levels in the U.S, and SoftBank believes that this trend will continue in many parts of the world, including Latin America.

Source: SoftBank Group, Nikkei Asia Research

According to WeWork, over the past four months, the Latin American market has seen “double-digit growth” in shared office occupancy, reaching nearly 50%, as companies in the region adopt flexible work solutions. In Q1 2021, WeWork reported sequential month-over-month membership growth globally and said it achieved positive net sales and positive net membership gains for the first time since February 2020.

 

WeWork also said it continues to see sales strength extend into April and May, but reported a net loss of $2.06 billion in the first quarter due to restructuring expenses as it prepares to go public through a SPAC. (LABS)

Source: CB Insights

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