Bloomberg Línea — This year has been a record for seed investment in Latin America, with $792 million deployed in seed-stage startups to third quarter, according to data from the Association for Private Capital Investment in Latin America (LAVCA).
This figure represents an 84% increase compared to the same nine-month period of 2021 and a 24% increase compared to the full-year record in 2021.
This week, Latin American early-stage startups Franq, Faster, Vixtra raised funds.
To third quarter, $6.6 billion of venture capital was invested in Latin America, less than half of the total of the $15.5 billion invested in 2021, but still above of total investment in 2020 and 2019, according to LAVCA.
While last year 53% of the total private capital invested was venture capital, this year it represents 30% of the $22.4 billion invested, making it the second-best year for private capital investment in Latin America, buoyed by investments in infrastructure and private credit, according to LAVCA.
The association says Latin America venture capital investment has resumed a more reasonable growth pace with a total of $1.2 billion invested in the region in the third quarter of 2022, “in line with the $1.1 billion quarterly average for 2019-2020,” says LAVCA.
Globally, both funding and venture capital deals fell in the third quarter, according to CB Insights, due to rising interest rates and investor concern with valuations.
CB Insights data points to a total $1.1 billion raised in Latin America in the third quarter, with 226 deals.
Venture capital investment in Latin America has extended beyond late-stage (series C+) rounds, according to LAVCA. Yet, investors are still active, they are just writing smaller checks.
Quarterly venture capital totals still exceed pre-pandemic levels in Latin America, with $420 million invested in early-stage (Series A and B) in third quarter, compared to $1.4 billion a quarter earlier.
For seed stage, $170 million was invested in third quarter in the region, compared to $282 million in second quarter. LAVCA states that quarterly averages for early-stage and seed investment in 2019 were nearly $300 million and $55 million, respectively.
These are the early-stage startups that raised funds in Latin America this week:
Brazil’s Franq Open Banking, a fintech that connects customers and companies to financial products from more than 50 providers (from banks, insurance companies to other fintechs), through bankers and autonomous agents, raised a $12 million Series A round led by Quona Capital.
The round included the participation of Globo Ventures, the venture capital arm of Globo, and Broadhaven Capital Partners, in addition to Valor Capital Group, which was already an investor in Franq.
Franq aims to democratize access to financial services for small and medium-sized business (SMBs) and consumers. Franq’s self-employed bankers, called personal bankers, use their expertise to identify the best products from multiple vendors and then enable SMBs and consumers to access them through a platform.
Faster, a Brazilian startup that helps companies hire design services, raised a seed round of 8 million reais ($1.5 million), led by DOMO Invest and with the participation of investors such as Dafiti CEO André Farber, executives who helped build companies like Nubank, Loft, Isaac, Gympass, Olist, and founders of Neon, Yuca, ContaAzul and Raccoon.
The contribution round will happen in two tranches, subject to the achievement of goals.
Founded in 2021 by entrepreneurs Daniel Dahia and Vitor Filipe, Faster is a startup that selects designers in Brazil and bridges them with companies’ projects through a platform, which the company says speeds up the work.
With a subscription model, it offers credit packages that can be exchanged for design pieces by the communication teams. Faster currently has 70 clients, including Nubank, Ambev, and L’oreal.
Vixtra, a Brazilian foreign trade fintech, and raised 16 million reais (almost $3 million) in a pre-Series A round led by Valor Capital, with Fontes, a QED Investors fund dedicated to seed investments in Latin America. The contribution follows a pre-seed round captured by Vixtra in 2021.
Last year, the fintech raised 35 million reais (nearly $6.6 million) between equity and debt, with angel investors and Brazilian asset managers, who contributed capital in shares of a Credit Rights Investment Fund (FIDC) structured by Vixtra itself.
Now, with the new investment, the company plans to speed up the volume transacted in its payment and credit solution for international trade, in addition to improving services on the platform in order to benefit importers, facilitating the cash flow of each business.
Mexican beauty brand Nopalera, known for its line of botanicals for bath and body, takes its first outside capital in an oversubscribed seed round of $2.7 million. Since its launch nearly two years ago, founder Sandra Velasquez has bootstrapped the startup. Now, she looks to use this infusion to fuel product innovation, build a team and expand its retail footprint. Leading the round is L’ATTITUDE Ventures (LATVC), a fund that exclusively invests in Latino-owned businesses.
Nopalera has garnered a loyal community and attracted iconic retailers such as Nodstroms, Credo Beauty, WholeFoods, and over 300 influential boutiques.
Startup Mattilda, which streamlines administrative and financial processes for schools, raised $10 million in a seed round led by New York-based fund FinTech Collective.
Founded in 2022, Mattilda is a software as a service (SaaS) platform for private schools that also had investors onboard such as DILA Capital, QED Investors, GSV Ventures, Picus Capital, Emerge Education, SMP and Xochi Ventures.
In addition to managing the schools, Mattilda offers loans backed by future school fees, for which the funds from this seed round will be used.
Argentine fintech Menta closed a $6 million seed investment round led by the Silicon Valley fund Base10. The startup, founded a year ago, seeks to boost financial inclusion of all businesses in Latin America through an embedded finance technology solution.
This round of financing was joined by funds such as Pear VC, Matterscale and Gilgamesh, which had already invested in Menta in its $1.7 million pre-seed round, enabling it to go to market in countries such as Argentina, Mexico and Colombia.
With the new investment, Menta says it has tripled its valuation.