LatAm Software, Payments Startups a Good Investment Option, dLocal’s Sergio Fogel Says

The co-founder of Uruguayan fintech unicorn dLocal sees opportunities to invest in Latin American startups providing business software and payments services, even as capital becomes more scarce

The Uruguayan co-founder of dLocal participated in an event organized by the Uruguay-Israel Chamber of Commerce and consulting firm CPA Ferrere. Photo: Uruguayan Presidency
By Ken Parks
November 08, 2022 | 02:25 PM

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Bloomberg — Sergio Fogel, a co-founder of Uruguayan fintech unicorn DLocal, says he sees opportunities to invest in Latin American startups offering business software and payments services, even as capital becomes scarcer and more demanding.

While there is a lot less capital available for Series B and pre-IPO funding rounds, investors are still providing early stage funding but want to see revenues within three years and a clear path to profits, Fogel said in an interview in Punta del Este.

“There’s no patience for things that have an uncertain revenue date,” he said.

One area of the startup landscape in the region that has particularly fallen out of favor is crypto, he said, as the price of crypto assets tumbled along with trading volumes.


A serial entrepreneur, Fogel has invested in some 15 tech startups with a focus on young, talented founders.

Uruguayan open banking platform Datanomik, which received $6 million in a funding round led by venture capital firm Andreessen Horowitz this year, currently absorbs a lot of his time as a hands-on angel investor who likes to get directly involved in his companies.

Uruguayan Fintech Datanomik Launches With $6M Injection

“I have great expectations for Datanomik,” he said. “We started in Uruguay and Brazil, and the idea is to expand to all of Latin America.”


His first and only unicorn to date, emerging markets payments provider dLocal, hasn’t been immune to the sell-off in global tech stocks this year.

After more than tripling in price to a record $69 per share after listing on Nasdaq in June 2021, dLocal’s stock now trades at around $20.50, down 43% this year, with a market capitalization of $6 billion.

Fogel put his current stake in the company at around 15%.

“I think the drop is consistent with the drop in the stock market and the size of the company,” he said. The Nasdaq has fallen about 33% in 2022.


Uruguay’s next unicorn will probably be a software firm providing services such as automation or cyber security to businesses, Fogel said.

Fogel is also working with several Uruguayan scientists to found a biotech company accelerator in a bet that life sciences -- a field that encompasses everything from gene editing to lab-cultured meat -- will enjoy a boom like the tech industry did in recent years.

Uruguay’s dLocal Sees Revenues Soar in Second Quarter

Billionaires’ haven

Uruguay, a country of 3.5 million people wedged between Argentina and Brazil, has become at least a temporary home to a growing number of Latin American tech billionaires including Globant’s Martin Migoya, MercadoLibre’s Marcos Galperin and Nu Holding’s David Velez.


Fogel thinks the trend will continue as fear of crime, confiscatory taxes and a lack of legal guarantees in other countries spur more of the region’s ultra-rich entrepreneurs to decamp for Uruguay.

“20% is due to the merits of Uruguay and 80% problems in the countries” they come from, he said. “Uruguay has been stable for many years.”

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