Bloomberg Línea — It wasn’t a good quarter for Latin American startups, with venture capital and private equity deals dropping 69% in aggregate value in the first three months of the year compared to the same period last year, according to TTR Data. In terms of volume, the decrease was 39%.
Private equity transactions fell 37% to 37 deals throughout the region during Q1, while the number of venture capital investments dropped 51% to 161 transactions. In an environment that continues to be unfavorable for fundraising due to higher interest rates, Justos, Arado, Magroove, FinanZero, and Galactic Holdings secured investments in the past few days.
Brazilian car insurance startup Justos has received its third external investment with a round of 32.5 million reais ($6.5 million) led by a strategic reinsurance investor with participation from Israel’s MSR Capital and executives from Google, Pipe, and EQT.
Justos had previously received a $35 million investment in a Series A round in October 2021, the largest check for a pre-operational company in Latin America. The round was led by Ribbit Capital and included participation from Kaszek, SoftBank, Big Bets, as well as the CEOs of Nubank and Kavak.
The startup received a seed round of 15 million reais ($3 million) in early 2021 led by Kaszek with participation from Big Bets. In addition to the funds, the CEOs of seven unicorns also participated in the round, such as David Vélez from Nubank, Sergio Furio from Creditas, Patrick Sigrist, founder and former CEO of iFood, Carlos Garcia Otatti from Kavak, Assaf Wand from Hippo Insurance, and Fritz Lanman from Classpass.
The insurtech was founded by Dhaval Chadha (CEO), who is from India; Mexican Jorge Soto (CTO), and Spaniard Antonio Molins (Chief Scientist), who met in Silicon Valley and held leadership positions at Netflix, Airbnb, and ClassPass.
The insurtech guarantees cheaper insurance contract prices.
Agribusiness startup Arado, formerly known as Clicampo, raised 60 million reais ($12 million) in a Series A round led by Acre Venture Partners, a California-based fund that invests in agriculture and climate change mitigation, with participation from Syngenta Group Ventures, Globo Ventures’ venture capital arm, and existing investors Valor Capital, MAYA Capital, and SP Ventures.
Founded in 2021, Arado connects small and medium-sized farmers with restaurants and retailers, providing business and logistics solutions.
Last year, the company said it sold more than 5,000 tons of food. Arado will direct new investments into technology to improve margins and efficiency for producers and traders, and reduce food waste. For more complex operations, such as for retailers and industrial kitchens, the startup said it is still developing demand prediction and fresh produce inventory management solutions.
Brazilian digital music distribution startup Magroove has raised 8 million reais ($1.6 million) in an investment round led by venture capital firm DOMO Invest. Founded in 2019 by Brazilian music producer Vitor Cunha (CEO) and mechatronic engineer Fabrício Schiavo (CTO), the company plans to use the funds to invest in product refinement.
Magroove offers the service of publishing music on streaming platforms for free, and if the music is successful, the company earns a commission. Magroove retains the first $5 generated by each release (album, EP, single), while other aggregators monetize through royalty percentages or upfront charges. The company also has a music discovery app that recommends songs.
Magroove will use the investment to accelerate its expansion plan and strengthen its brand in the Brazilian and international markets, focusing on team and technology investments.
Currently, 70% of its users (artists and listeners) are in the US and Europe, but the company has a presence in other countries where it is a pioneer, such as Togo, where artists can earn up to 21.5 times the local minimum wage from their releases on streaming platforms.
Online credit marketplace FinanZero has raised 7.5 million reais ($1.5 million) in its sixth investment round since its founding in 2016. Swedish funds led the round.
FinanZero is a fintech founded by Swedish entrepreneurs Olle Widén and Kristian Jacobsson in conjunction with the Swedish management company Webrock Ventures.
According to the fintech, the funds will be used to develop new online financing products for real estate and vehicles, offering secured credit. This investment comes less than a year after the previous round. The startup claims that it was able to secure the same terms as in 2022, including maintaining the valuation.
The fintech originates approximately 30 million reais in credit per month. Through its marketplace, consumers can access loan offers from up to 72 partners, including traditional financial institutions and digital banks.
Galactic Holdings, a cryptocurrency ecosystem operating in Latin America, has received a $10-million pre-Series A investment led by BAI Capital, with participation from Animoca Brands Y2Z Ventures, Longling Capital, Head & Shoulders, TKX Digital Group, Perseverance Capital, Palm Drive Capital, among other investors.
The company offers digital cryptocurrency products, including a digital wallet, the TruBit Wallet, a cryptocurrency exchange, TruBit Pro, and a stablecoin.
Over the past three years, the company has established a customer base in Mexico, and the new investment will be used to expand to other Latin American countries such as Argentina, Brazil, Colombia, and Venezuela. Galactic Holdings recently integrated bank transfers, credit cards, and debit cards as payment methods.