Rounds of the Week: AI-Powered Startups Attract Investment In Latin America

Bloomberg Línea — Investment in Latin America, whether by private equity, venture capital, or through mergers and acquisitions, decreased by 20% to 1,757 deals to end-July, according to TTR Data.

Private equity transactions fell by 23% to 92 throughout the region, while venture capital deals dropped by 32% to $2.2 billion across 515 transactions. However, one sector that continues to attract investors’ attention is artificial intelligence. This week, Tractian and Fintalk, startups that use technology as their core business, received investments.

Tractian

Brazilian startup Tractian received $50 million in a Series B round led by General Catalyst. The predictive monitoring and maintenance company has developed a set of hardware and software solutions to help industrial workers better track their operational and maintenance plans on machines, facilitating access to real-time monitoring and decision-making in the face of unexpected equipment failures.

From 2022 to 2023, Tractian doubled its client base in Mexico, Brazil and the United States, reaching over 500 multinational clients, such as Grupo Bimbo, La Costeña, Johnson Controls, Avon and Clarios. Tractian reported experiencing over fourfold growth in its revenue between 2022 and 2023.

Over the last year, the startup expanded its operations to include online machinery monitoring, energy management, and asset management for maintenance.

Furthermore, nearshoring, the geographic and logistical advantages of having business partners in Mexico as a neighbor of the United States, has generated a need to professionalize industries and production lines in all sectors, according to the company.

Among the investors who joined the round are Trevor Oelschi, a partner at General Catalyst, and Deep Nishar, Product Director at Google/Google Maps and LinkedIn, as well as Paul Kwan, who was involved in the IPO of Samsara, valued at $11 billion.

Tractian holds registered predictive technology patents with the United States Patent and Trademark Office, as well as a certification of partnership with SAP. The company has offices in Mexico City, Atlanta and São Paulo.

Fintalk

Fintalk, a conversational platform with artificial intelligence technology capable of understanding different accents, received 6 million reais ($1.22 million) in a Seed round led by Revolution, the Volt Capital fund.

The company has retailer C&A among its clients and claims to have optimized the company’s collections area, achieving a 44% reduction and a 19% increase in cost efficiency.

Munchies

Brazilian fintech Munchies, aiming to become a digital bank for decentralized finance in Brazil, received an undisclosed sum in presSeed investment from Canary and Latitud.

The company doesn’t manage assets, but will offer DeFi products. The platform connects with the most popular protocols generating yields in ETH, USDC, and other cryptocurrencies. The company was launched by Thiago Arnese this month. Arnese was the founder of Hash, a QED Investors venture that closed its doors last year.