Funding for LatAm startups reaches year-to-date peak in July – SlingHub

The tough period for startups is not yet over, but with US$803mn raised in 78 rounds during July, that was the biggest funding volume for a month in the region so far this year, according to tracking by the SlingHub platform, in partnership with Itaú BBA.

The result, according to SlingHub, was still a year-on-year drop of 9%, but was the lowest in 2023, while showing “a remarkable 68% upswing from the previous month.” 

Fintechs, biotechs, energytechs and edtechs deals led the pack, while Brazil, Mexico and Argentina, in that order, saw the most funding rounds.

On the other hand, the pace of the M&A market slowed somewhat from the first few months of the year, with 17 deals in July, three less than the average so far this year. 

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In Brazil, consultancy PwC said that M&A transactions gained strength in the first half of 2023, recovering to pre-pandemic levels. With 610 transactions, the total surpassed the 395 reported in the same period of 2020, although that was still lower than in the same periods of 2021 (706 deals) and 2022 (807).

Accounting for 44.4% of the total, the tech sector was the most active in M&As in January-June, according to PwC.

Meanwhile, TTR Data and AON reported that funding rounds in the Latin American dealmaking market declined 23% year-on-year in the first half of 2023.

According to TTR, there were a total of 1,447 announced and closed transactions, with a total aggregate value of US$35.7bn, which was a 30% decrease.

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MercadoLibre, in partnership with Uruguay’s innovation platform Newlab, is selecting startups with projects aimed at reducing the carbon footprint of last-mile logistics.

Registration is open until September 4. Overall, six fronts are the focus under the macro theme, including micromobility, portable chargers for electric vehicles (EVs), and internal logistics operations.

Companies developing innovative products, services or technologies within any of the areas can obtain more information here and submit applications here.

Newlab and MercadoLibre recently announced a partnership focused on accelerating the green energy transition of the logistics network. At present, MercadoLibre claims to have a fleet of more than 1,000 EVs in Latin America, with plans to reach up to 10,000 in the coming years.

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Maqui, a Colombian-Mexican startup that manages supplies for the fashion industry, raised US$1.5mn in a pre-seed investment round.

The round was led by VC fund Marathon Ventures and strategic investors such as Nido Ventures, Integra Group, Kupier and Noa Capital, as well as entities dedicated to fostering the reduction of textile overproduction and promoting sustainable practices in the fashion industry.

The company said it will use the proceeds to expand its market in the Mexican fashion industry.

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IDB Invest co-led a U$15.5mn financing round for Mexico City-based Wonder Brands, one of the leading e-commerce accelerators in Latin America and the Caribbean.

The IDB contributed an equity investment of US$3mn to the startup, which is specialized in creating and acquiring digital brands.

The round is expected to help consolidate the company’s portfolio of digital small and medium-sized enterprises (SMEs), integrating high growth online sellers, developing and launching new digital native products and brands, and enabling cross-border expansion in the region, said the IDB. 

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Germany-based IoT connectivity solutions provider Emnify this week acquired Cinco Telecom, the telecoms operation of the J. Safra banking group in Brazil with the aim of operating in the local MVNO scene. The values were not disclosed.

“By acquiring Cinco Telecom, Emnify not only strengthens its global footprint, but also establishes itself as an Authorized Mobile Virtual Network Operator (MVNO) in Brazil, compliant with the country's intricate legislation on mobile communication services,” the company said in a release.

According to consultancy Transforma Insights, cellular-based IoT connections in Brazil are expected to grow from 29mn at the end of 2022 to 69mn at the end of 2027, which would be a CAGR of 19.1%.

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Brazilian telecom and energy services provider WDC Networks' investments fell by 18.2% year-on-year to 35mn reais (US$7.1mn) in 2Q23. That was also a 55.2% drop from 1Q23. 

The company reported a 22.7% year-on-year decrease in net revenue to 220mn reais. Of the total, 132mn reais (down 17.1%) was from its core telecom segment.

"We have observed gains in our market share, mainly due to the supply of 33.4% of ONUs (fiber modems) in the 6M23," the company said in a report.