Tim Draper Invests in $50M LatAm Fund in a Search for ‘Sci-Fi’ Startups

This isn’t Draper’s first investment in LatAm. The star VC has been investing in the region through Draper Cygnus, formerly known as Cygnus Capital, since at least 2017.

Tim Draper with the founders of Draper Cygnus, Ignacio Plaza and Diego Gonzalez
By Marcella McCarthy (EN)
October 28, 2021 | 06:00 AM

Miami — This year we’ve seen headline after headline announcing that foreign investors are clamoring to invest in Latin American startups, and one of those is Tim Draper, the star venture capitalist who invested into Draper Cygnus’ latest fund: a $50 million fund that is investing in Latin American founders around the world.

Tim Draper is known for his investment in unicorns such as Tesla, SpaceX, Twitter, Coinbase, Robinhood and others. He’s also an outspoken proponent of Bitcoin and decentralization.

This isn’t Draper’s first investment in LatAm or Latin American founders, in fact he’s been at it for a few years now, at least since 2017 since Cygnus Capital became Draper Cygnus. The Argentina-based firm is focused on deep tech, rather than what we see in a lot of LatAm such as e-commerce and fintech.

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“We like to invest in pure innovation, not the typical Latin American venture that is a copycat of something from somewhere else,” said Diego Gonzalez, founder and managing partner at Draper Cygnus.

Since the inception of Cygnus Capital, the firm has had 13 exits, and four of its investments have become unicorns, such as Auth0, NuvemShop, Satellogic, and Mural.

This latest fund is called Draper Cygnus LatAm Fund, and is the fourth fund since the founding of Cygnus Capital in 2012.

The fund, which invests $500,000 (Seed) to $2 million (Series A) has made 7 investments so far in what is playfully referred to as “science fiction” startups, those that include space industry, IOT, crypto, bio-tech, nanotechnology, artificial intelligence, and others

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“Tim is a partner at the fund and he’s also an investor. Some of his other funds have also co-invested in our portfolio companies,” said Gonzalez.

We asked Draper why he was interested in investing in the region and in Latin founders in general and he said, “The region is generating entrepreneurs who have enormous talent and who are capable of solving the bigger problems of humanity, turning big challenges into opportunities. We’ve had enormous success with the team led by Diego and Ignacio and I am very excited about what we will achieve with this new fund.”

While Draper Cygnus is investing in Latin-founded companies around the world, there has been a focus on “investing in hubs that are the best at what they do,” Gonzalez said. He gave Argentina as an example as a stronger player in bio-tech.

“We like to invest in companies that are going to change the world. An e-commerce company, or a digital advertising company may be very successful, but they aren’t going to change the world,” he added.

Who will change the world next?

Based on their recent investments from this fund, below are a few companies that Draper Cygnus believes may change the world. “We have invested in 7 startups with diverse entrepreneurs from Mexico, Peru, Argentina and Brazil, among others. All of them use complex technology and are innovating in different sectors, working to solve current and future problems of the most diverse industries and areas,” said Bravo.

Novo Space: this US-based, Latino founded space company is developing a modular platform of radiation-tolerant high-performance computer hardware and software for space applications, which is seen as the first step towards a true “space cloud “. Draper Cygnus co-invested with Space Fund, Techstars and accelerator Fit4 Start.

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Stamm: It’s a biotech company that is redesigning bioreactors from scratch by combining microfluidics, electroporation, 3D printing and robotics. With this, it seeks to multiply by several orders of magnitude the efficiency, flexibility and decentralization of the manufacture of biotechnological products for the pharmaceutical and food industries. “We are pre seed investors in Stamm and co-invested in its bridge round together with SOSV, Terampis Technologies, as well as Draper Associates, which is the venture capital fund run by Tim Draper himself,” says Ignacio Plaza, managing partner at Draper Cygnus.

Lemon: this fintech is combining traditional finance with crypto in a virtual wallet and a prepaid credit card to leapfrog the LatAm financial system. Lemon’s $ 16.9 million series A, has been the largest that an Argentine fintech has achieved in that stage. The round was led by Kingsway Capital and Draper Cygnus co-invested with Draper Associates, Valor Capital and Coinbase Ventures, among others.

Codiga: This startup created a solution based on artificial intelligence, which helps software developers to program better and faster, suggesting code improvements automatically. It detects coding issues as developers write them and automatically suggests one-click fixes according to their programming style and goals

Oasys: The company is completely rethinking the way houses are designed and built, using additive metal printing technology and unique structural design allowing an end-to-end design, fabrication and construction experience. Its software and construction technology platform allows the entire process to be reduced to 3 months, using human resources more efficiently and allowing a decentralized use of materials.

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MicroTerra This IndieBio NY 2021 Class company is developing a decentralized production of Lemna-based protein and binder using existing tilapia aquaculture infrastructure to serve producers as a replacement for current non-organic binder solutions and as vegan protein for plant-based food. MicroTerra is able to leverage these aquafarms to produce lemna 3-5 times cheaper than competitors, while providing farmers with an extra revenue stream, cleaner aquafarm water, and a reduced water footprint by ⅔. MicroTerra’s vision is to create ingredients that instead of using water, are cleaning water.

Voyager: based in Canada and founded by a Peruvian, an Israeli and a Canadian, Voyager has developed a pocket-sized dispenser for consumers to precisely dose cannabis oils, emulsions and other new therapies.