Petlove raises $150M to scale pet ecommerce

Petlove, a São Paulo-based digital platform for products and services for the pet market, announced today that it has raised about $150 million (R$750 million) in a funding round led by Riverwood Capital.

The company started its life as PetSuperMarket when it was founded in 1999 in the early days of the Internet. Today, the company continues to operate an online store offering a wide range of pet products and services.

Tarpon, SoftBank, L Catterton, Porto Seguro and Monashees also participated in the funding round, which brings the company’s total raised to a known $225.8 million over its lifetime, according to Crunchbase. Since January 2020 alone, Petlove has raised over $192 million. The company has declined to reveal at what valuation this last round was raised. But it did say that overall, sales increased by 65% in 2020 compared to the year prior.

Petlove CEO Talita Lacerda said the company will use the new capital in part to further expand its logistics network with the goal of accelerating its delivery capabilities. In particular, it plans to expand to other geographies its express delivery service, Petlove Já, which allows products to be delivered within four hours of an order being placed. Currently it is only available in a few cities in Brazil, such as São Paulo and Belo Horizonte.

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

The funding will also go toward growing Petlove’s subscription program, which Lacerda said is the first of its kind in the country, and one of the company’s flagship services. During the pandemic, the company saw “a substantial growth” in its subscription service, which reached 75% of Petlove’s volume, according to Lacerda.

“The Brazilian pet market is one of the largest in the world and Brazilian consumers are increasingly demanding digitally native products and services with a high level of customer-centricity,” said Francisco Alvarez-Demalde, co-founding partner and managing partner at Riverwood Capital, in a written statement.

Brazil is the fourth largest pet market in total spend, the company says. According to the Instituto Pet Brasil, total sales of the Brazilian pet market surpassed $7 billion (R$40 billion) in 2020, growing 13.5% compared to the previous year, while Petlove grew 65%. Overall, pet ownership in the country is high, with 60% of Brazilians owning pets, compared to 50% in the U.S.

Alex Szapiro, head of Brazil and operating partner of SoftBank Latin America Fund, described the work that Petlove has done to help “form the largest ecosystem in Latin America” as “one of the most extraordinary in the segment and in the entire retail sector.” (TechCrunch)

Integra Groupe Y Combinator Demo Day 2021 Insights

This week Y Combinator kicked off the Demo Day cycle for the Summer 2021 cohort. Per Y Combinator leadership, the 377 startups in this cohort have founders from 47 different countries, and 37% of the founders in this cohort were from underrepresented groups (which YC’s Michael Seibel says the accelerator defines as Black, Latinx or female.)

We are actively speaking with many of these visionary founders and can’t wait to share more with the Integra Better Future Fund stakeholders. Below five highlights from the 2-day session:

Entrepreneurship is flourishing globally: nearly 50% of YC startups are based outside of the United States, with India, U.K. and Mexico making up the largest part of that percentage

55 companies from Latam, representing almost 15% of total batch. India had 35 and Asia had 33 companies

B2B solutions are half of the batch. Maybe as a response to the covid digitalization. How can I help companies to digitalize their processes

Global entrepreneurs continue leveraging US success stories and adapting business models to local emerging markets

Investors are deploying capital further from home as yields remain low and early-stage talent continues to thrive beyond developed markets

Mexico announces energy reforms

During his third state-of-the-union Mexico’s President Andres Manuel Lopez Obrador, AMLO, presented a bill revamping the energy sector to the Mexican Congress this month.

The proposal of a constitutional amendment giving priority to the state utility company, the Federal Electricity Commission, over private competitors has been discussed by the leader for months, but he used his speech Wednesday to put a timeline on it. The amendment must be approved by Congress, where it is expected to face an uphill battle. Although the legislature is still stacked with members of the president’s own party that support was watered down by the mid-term elections in June.

In his speech, AMLO pointed to his achievements thus far in revamping the energy sector, including changes to the electricity commission and a bolstering of the state-owned oil company, Petroleos Mexicanos, which he said should soon be able to fulfill domestic demand.

“We are getting rid of vices and dishonest practices in the management of government,” he said, adding that his administration stopped handing out concessions to private companies for mines, water, hospitals, ports, trains, beaches, prisons, and public works. “But the most important part is that we have stopped privatization in the energy sector, for petroleum and electricity,” he said.

The reform of the electricity market is one of three proposals he has repeatedly mentioned as key for the latter part of his term, which started in December 2018. The other two include reforming the complex electoral system of proportional representation and bringing the National Guard, which his administration created, under the control of the Defense Ministry.

Senate majority leader Ricardo Monreal, who belongs to Lopez Obrador’s party, Morena, said in June that passing all of these amendments would be complicated in a divided Congress. Morena lost ground in the lower house, where its coalition lost their two-thirds majority needed to amend the constitution, and in the key district of Mexico City in the June vote, even though the party obtained a majority of the state governorships up for grabs. (Bloomberg)

Source: Graphic by CESPEDES (Private Sector’s Comission for Studies on Sustainable Development) based on data from CENAPE (National Center for Energy Control), ECPA

Cuba the next LATAM nation to recognize crypto

This week Cuba announced the central bank will set rules for crypto currencies following in El Salvador’s footsteps.

The Central American nation of El Salvador recently announced it would recognize use of the cryptocurrency Bitcoin as a way to encourage remittances from its citizens living abroad.

The resolution says the Central Bank can authorize use of cryptocurrencies “for reasons of socioeconomic interest” but with the state assuring that their operations are controlled. It also explicitly noted that operations could not involve illegal activities.

A local cryptocurrency expert, programmer Erich García, said some Cubans are already using such devices, often via gift cards, for online purchases. (Bloomberg, Reuters)

Source: CBInsights, LatamList, Statista, Crunchbase, PayspaceMagazine

Moody's downgrades Peru, citing 'polarized and fractured political environment'

This week Moody’s downgraded Peru’s rating to ‘Baa1’ on Wednesday, citing a “continuously polarized and fractured political environment,” which it says has increased political risk and “materially weakened policymaking capacity.”

The outlook has been changed to stable from negative, Moody’s said in a note.

Peru’s Congress on Friday confirmed a new leftist Cabinet nominated by President Pedro Castillo, allowing the fledging administration to continue an agenda focused on higher social spending coupled with higher taxes for the mining industry.

Castillo took office a month ago after winning the presidency by a margin of just 0.25 percentage point against a rival candidate. His far-left platform has spooked markets, sending Peru’s sol currency tumbling to historic lows.

The Castillo administration had a contentious first month, mired by allegations that some Cabinet members are aligned with a Maoist rebel group and a low 38% approval rating.

Castillo’s supporters say instead that the Cabinet represents historically marginalized Peruvians who do not hail from capital Lima. (Reuters, Moody’s)

Source: Reuters, Susan Mathew. Note: Data at 1422 GMT, Sept 2

Sources: Instituto Nacional De Estadistica E Informatica De Peru; Bloomberg.

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