Bitso Raises $250 million at $2.2 billion valuation

Bitso, a regulated crypto exchange in Latin America, announced today it has raised $250 million in a Series C round of funding that values the company at $2.2 billion. Tiger Global and Coatue co-led the round, which also included participation from Paradigm, BOND & Valor Capital Group and existing backers QED, Pantera Capital and Kaszek.

This comes just four months after the startup raised $62 million in a Series B round. The company believes the funding makes it the most valuable crypto platform in Latin America and one of the most highly valued fintechs in the region.

Last year Bitso processed more than $1.2 billion in international payments including remittances and payments between companies during 2020 alone. Bitso says it also has surpassed 2 million users. These two milestones, the company argues, is evidence of the growing use of crypto as an everyday financial tool in the region.

Demand for crypto assets and crypto-enabled financial products have soared in popularity both for individuals and businesses in the region, according to Bitso, which aims to be “the safest, most transparent, and only regulatory compliant platform” in Latin America. The company also says it’s the only player in the region to offer crypto-insurance for its client’s funds.

“The growth of the crypto ecosystem this year has been remarkable. It took Bitso six years to get its first million clients. Now — less than 10 months later — we have reached the 2 million mark,” said Bitso co-founder and CEO Daniel Vogel. But the metrics he is most proud of are that Bitso has also more than doubled the assets on its platform in the last five months and that its transacting volume during the 2021 first quarter exceeded the transaction volume it did in all of 2020.

Source: Contxto based on Statista data

Bitso was founded in January 2014 and acquired its first customer in April of that year. Bitso’s mission, put simply, is to build next-generation borderless financial services for consumers and businesses alike. “Cryptocurrencies are the future of finance and Bitso makes the future available today,” the company says.“Bitso offers products and services for individuals and businesses to use crypto in their everyday life,” Vogel said. “In some parts of the world, crypto is associated with speculation. Bitso’s customers rely on the technology for everyday uses from receiving remittances to engaging in international commerce.”

Founded in 2014, Bitso has more than 300 employees across 25 different countries. That compares to 116 employees last year at this time. In particular, its growth in Brazil is increasing exponentially. (Techcrunch)

Argentine grain buoyed by Australian-China dispute

As reported by Bloomberg, farmers in Argentina are pouncing on a trade feud between grain rival Australia and voracious crop buyer China. Argentine growers are set to expand barley plantings by 28% this year after China slapped tariffs on Australian exports of the grain used in livestock feed, one of a slew of similar restrictions imposed by Beijing amid souring relations. Farmers on Argentina’s Pampas crop belt usually compete with Australia for a share of global wheat sales, while sending their barley to camel herds in Saudi Arabia and other parts of the Middle East. But the diplomatic upheaval — which comes as concern heightens on the Pampas that the government may raise wheat-export taxes — has opened a door to ally China.

Because barley and wheat are almost interchangeable when used as animal feed ingredients, a buyer’s choice often comes down to cost. Benchmark U.S. wheat futures have surged 53% since late June, touching an eight-year high last week. Spot prices in Argentina for barley — which is mostly planted in July and harvested in December — have also climbed, although at a slower clip. Australia has been China’s biggest provider of barley over the past decade, according to MIT Media Lab data through 2019, with the Asian giant regularly sourcing well over half of its imports from Australian farms. (Bloomberg)

Source: Argentine Agriculture Ministry

LATAM Gold Miners Shifting to Copper?

Demand is expected to grow in the coming years as the world shifts to renewable energy and electric vehicles, both of which will require large quantities of copper. Against this backdrop, the region’s top gold miners have been quick to point to their copper credentials, both in current operations and future growth opportunities in their portfolios. Newmont, the top gold producer in Latin America, says copper could grow to a fifth of its business in the coming years if major projects in the region come to fruition. These include Norte Abierto and NuevaUnión in Chile.

Norte Abierto, a 50:50 JV with Barrick Gold, hosts reserves of 23.2 million ounces of gold and 5.8 million lbs (26.3 Mt) of copper, while production at the $7.2 bn NuevaUnión asset – a 50:50 JV with Teck Resources – is forecast at 224,000 t/y copper and 269,000 oz/y gold. Newmont also has the Galore Creek copper-gold project in Canada.

“If you assumed that just one of these three mega-projects come into our production profile at the back end of this decade, Newmont’s total production would be around 15-20% copper, providing us with a natural exposure to a metal of growing importance for reducing carbon emissions and facilitating the ongoing transition to a new energy economy,” CEO Tom Palmer told the company’s Q1 earnings call last week.

Other projects set to deliver growing copper output for Newmont are the $2bn Yanacocha copper-gold sulfides expansion in Peru, which will extend the life of the Yanacocha mine.

The growing potential importance of copper to Newmont stems from the presence of copper and gold together in many large deposits globally, rather than any conscious decision to focus on the red metal.

“It’s still very much a clear focus on gold as the core of our business but organically we’re seeing that as you look for the best gold projects… particularly when you look at our world class definition to look for those long-life projects and you look for those projects in the jurisdictions we’re prepared to work in, they come with copper. So it’s more of an organic benefit from that,” Palmer added.

While growth projects will increase some primary gold miners’ exposure to copper in the coming years or decades, the metal’s role has expanded far more quickly as a result of the price surge.

“Copper is an important contributor to the bottom line of Barrick and with the recent rise in copper prices it’s making a 20% contribution to Barrick’s business as we speak, today, based on spot prices,” CEO Mark Bristow told the company’s AGM on Tuesday. In addition to the Pueblo Viejo gold mine in the Dominican Republic, a 60:40 JV with Newmont, and the Veladero asset in Argentina, a 50:50 JV with Shandong Gold, Barrick’s global portfolio includes the Zaldívar copper mine in Chile, a 50:50 JV with Antofagasta.

Barrick remains focused on being a primary gold mining company, Bristow added, but also on high quality copper assets. The metals are often found together in porphyry deposits, he added. “Gold is a precious metal. Copper is probably the most strategic metal, and geologically related to gold. If you want to build a world-leading gold company, in the fullness of time you’re going to end up producing copper,” the CEO said. As well as growth projects – including the 50% stake in Norte Abierto – Barrick is actively exploring for copper. “We have also said we’ll look to invest in specific copper operations when they are in a country where we believe we have a competitive advantage over and above traditional copper miners,” Bristow told the AGM. The company has previously looked to M&A to increase copper exposure, including targeting a merger with Freeport-McMoRan last year, which failed to advance. (Bnamericas)

Fintech a55 lands $35 million in debt and equity funding

The Latin America fintech a55, which provides solutions in the alternative lending space offering revenue-based financing, announces a combination of debt and equity US$35m investment.

The proceeds will be used to finance credit operations across the region, with a particular emphasis for Mexico, and the product and commercial expansion of the company. Investors include Accial Capital, an investor in tech-enabled loan portfolios in emerging markets, E3 Negócios and Mouro Capital, which doubled down on their 2020 investments in a55.

Through its platform and financing solutions, a55 has been a great ally for Mexican companies, especially in times of uncertainty on the Covid-19 backdrop., “Data is the new gold and fuels the new economy. We are building the platform of the future, where digital, transactional and revenue data will drive credit decisions and shape the future of financial services to grow companies in the new online normal”, said Hugo Mathecowitsch, a55’s CEO.

a55’s technology solutions include a credit monitoring dashboard for borrowers, an insights section on revenue and cost metrics, an integrated cash flow covenant management system and escrow and revenue split tools for income sharing. For lenders, a55 developed a portfolio management and monitoring platform fed in real time by transactional data. (a55, Finextra)

Source: KoreFusion, 2020 LATAM Fintech Report, summer 2020

Atlantic Council Opines on LATAM climate change efforts

The ripple effects of last week’s Leaders Summit on Climate, led by US President Joe Biden, will be felt for years, as the international community embraced renewed momentum toward mitigating the impacts of climate change ahead of November’s UN Climate Change Conference of the Parties (COP26) in Glasgow, Scotland. With climate change impacts being felt across the Americas, urgency is rising in this pivotal part of the world. The Leaders Summit brought together forty world leaders, including seven from Latin America and the Caribbean, representing Antigua and Barbuda, Argentina, Brazil, Chile, Colombia, Jamaica, and Mexico. The Americas are a crucial player in coordinated efforts to tackle global climate change, so we asked experts from the Atlantic Council and elsewhere to lay out what’s next.

What were some of the most ambitious commitments made by Latin America and the Caribbean in mitigating climate change? Are they aligned with the expectation put out by the Biden administration and COP26? How will the international community contribute to these regional efforts?

Jorge Gastelumendi is the global policy director at the Atlantic Council’s Adrienne Arsht-Rockefeller Foundation Resilience Center. He is also a COP26 high level climate champions co-lead for the Race to Resilience.

Putting nature-based solutions at the core of the efforts to fight climate change was the most outstanding, though not surprising, feature of commitments advanced by Latin American and Caribbean representatives—from Brazil’s president, Jair Bolsonaro, indicating the country’s commitment to end illegal deforestation in the Amazon by 2030, to Mexico’s president, Andrés Manuel López Obrador, committing to implement one of the largest reforestation programs in the world. Peru went even farther by committing that 50 out of the 150 actions in its climate plan will be nature-based solutions in sectors such as water management, land use, and forests. The main obstacles to materialize these commitments is the lack of implementation capacity in the region and the lack of financial resources from both public and private actors, particularly the financial sector. The international community, with the leadership of the United States, is critical in helping overcome these two obstacles. Colombia, for example, highlighted exploring innovative financial mechanisms, such as debt-for-adaptation swaps, which could avoid deforestation in the Amazon (a priority of Brazil, Colombia, and Peru) and protect the oceans (a priority for Chile).

President Bolsonaro, in his speech, raised the need for the right to development of current and future generations, also mentioning the Amazonian Paradox. What is the Amazonian Paradox and in what ways can a collaborative approach with the international community, the private sector, civil society, and indigenous communities help address it?

 

Rodrigo Lima is a lawyer with expertise in international trade, non-tariff barriers and sustainable development. He is the director of Agroicone, a Brazilian sustainable agribusiness organization.

The Amazonian Paradox emerges from the immense contradiction between the assets and potentials from a mega-biodiverse forest that covers almost five million square kilometers over nine countries, and the social realities and inequalities among its more than twenty-three million inhabitants. The possibility to provide effective value to the forest, generate profits from its services, promote its sustainable use, and allow its population to thrive from the economic benefits and environmental services reflects the challenge of the Amazonian Paradox.

It is reasonable to compare the Amazon to a puzzle that needs time and effort to be assambled. The Amazon is home to 329 indigenous lands, covering almost one million square kilometers – local communities, family farmers, medium and large farmers. About 640,000 square kilometers are non-designated public lands, which should be designated as national parks, private areas, indigenous land, or for other uses.

To organize the territory and create policies to enable a low carbon economy, while considering different actors and interests, depends on federal and state governments. But it also relies on cooperation from multiple sources. In this regard, climate finance can play a critical role not just in promoting Reducing Emissions from Deforestation and forest Degradation (REDD+) projects, but more broadly in creating and sustaining a flourishing nature-based economy. The completed puzzle relies on fostering a thriving economy based on natural resources, tourism, sustainable agriculture, forest management, and conservation activities. Bioeconomy opens a huge possibility to build upon this challenge, connecting extractivist producers to processing facilities and the market, generating social co-benefits from REDD+ projects, harnessing sustainable agriculture production based on innovation and good practices, and generating cosmetics and medicines, among other activities that could transform the Amazonian Paradox into the Thriving Amazonia.

International cooperation, as discussed at the Leaders Summit on Climate and other forums, has a fundamental role to play to support assembling this puzzle. The Amazon cannot be seen as a pure protection area; it must enable and promote social, economic, and environmental benefits for its population while it generates environmental goods to all society. President López Obrador, in mentioning Mexico’s reforestation program, suggested its expansion to the South of Mexico and into Central America, generating jobs. He also suggested temporary work-permits and residency in the United States for those committed to this program, as a mechanism to address the migration crisis. How could the climate crisis be a greater challenge to the current border crisis? In what ways could addressing climate issues also be an opportunity to solve migration?

Maria Fernanda Bozmoski is the deputy director for programs at the Atlantic Council’s Adrienne Arsht Latin America Center, where she leads the Center’s work on Mexico and Central America.

Hurricane season in Central America is right around the corner, and back-to-back natural disasters may bring the region to the breaking point. The number of migrants will likely increase in anticipation of hurricane season, as well as in the aftermath. While migration from the dry corridor—which stretches from Guatemala to Costa Rica—is likely, hurricanes also greatly affect the Caribbean coast. The Central American Integration System (SICA) estimates that up to eight hurricanes may form in the region this year. Four of the eight may be intense, according to the organization. Climate change is both a long-term push factor for migration and an accelerant. The United Nations estimates more than 7.3 million people were directly impacted by hurricanes in 2020, and there are more than 8 million starving people in Honduras, Guatemala, and El Salvador—up from 2.2 million in 2018. While the nearly four-fold increase in starvation is not all a result of the climate crisis, the destruction of crops and villages is a factor in this increase. In fact, experts find that climate change is a major factor explaining in the current surge in hunger. 

The consequences of climate change are being felt now by current generations and the Caribbean nations are particularly impacted. Like other heads of state, the leaders of Antigua and Barbuda, and Jamaica reinforced the need for support and collaboration on addressing climate change. How could the international community support Caribbean nations in adapting to the existing and upcoming consequences of the rise in global temperatures?

The international community can support Caribbean nations and other small island developing states (SIDS) by acknowledging the World Meteorological Association’s 2020 Report that sea level rise has doubled, and hurricanes have intensified, so the imperative to finance climate adaptation is urgent. Prime ministers Gaston Browne of Antigua and Barbuda, and Andrew Holness of Jamaica urged acceleration of the pace of implementation of existing accords. This would mean not only funding the financing mechanisms foreseen in the original Paris Climate Accord but also those outlined in the Warsaw Mechanism and the Samoa Pathway. More importantly, multilateral institutions must continue to mobilize capital for greater investments in renewable energy and green technologies. The Caribbean SIDS are also urging new metrics in the form of a multi-dimensional vulnerability index that would facilitate access to concessional financing. Commitments on energy transition and renewable energy were popular among leaders at the summit. In terms of transitioning to cleaner energy, how close is Latin America and the Caribbean to reaching that goal and significantly reducing its greenhouse gas emissions? What key steps could be taken to accelerate an energy transition in the Americas?

Though the reaffirmation and raised ambitions for climate action last week from across Latin America and the Caribbean were encouraging, regional progress to meeting climate goals has thus far been inconsistent. That said, growing electricity demand and the cloudy forecast for hydropower (long the prevailing baseload electricity source in the region) presents an important opportunity for countries to take significant steps to transform their energy mix and kickstart their climate goals. Accelerating the introduction of a mix of variable renewables, low-carbon natural gas resources, and in some cases nuclear energy, will offer alternatives to bioenergy, diesel, and coal in order to fulfill new electricity demand while also replacing potential declines in hydropower output. Additional efforts to decarbonize the transportation sector will also further electrify the region and support reduced emissions. Taken together, this makes investment into accompanying grid infrastructure as well as digitalization and energy efficiency important next steps in maximizing the emissions-reducing potential of regional electrification and energy transition. (Atlantic Council)

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