Startups funding extending beyond traditional LatAm tech hubs

The share of new VC-backed startups that are headquartered outside Latin America’s traditional tech hubs grew in the first half of 2023, according to a report by regional private equity and venture capital association Lavca.

This participation reached 39% in 1H23, up from 33% a year ago. The figure corresponds to startups outside São Paulo, Mexico City, Santiago, Bogotá or Buenos Aires, the report said.

According to Lavca, emerging tech hubs include Rio de Janeiro, Florianópolis, Belo Horizonte, Curitiba, Lima, Monterrey, Medellín, Guadalajara, Montevideo, Porto Alegre, Recife, Quito, Córdoba and San José.

Lavca also reported that startups with headquarters in Spanish-speaking Latin America account for 51% of such firms in the region, with Chile and Colombia among the fastest-growing major markets. The balance corresponds to Brazil.

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In Brazil, startups raised US$327mn in 40 funding rounds in August, the best month so far this year in fundraising volume, according to local innovation platform and startup hub Distrito.

August was strongly influenced by two large deals: Gympass, which raised US$85mn in a series F round, and Nomad, which received US$61mn in a series B one. In number of deals, the month saw a 38.4% drop over August 2022. Year-to-August, Distrito has tracked 322 rounds.

Despite the two contributions in advanced stages, most deals corresponded to the seed stage in August, for 70% of total rounds. The sectors that received the most capital were fintechs (US$150mn), human resources startups (US$85mn) and industries (US$45mn), said Distrito.

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Brazilian systems integrator Add Value acquired HashCloud and Tradesys, as it pursues a 200mn-real (US$40.5mn) annual revenue target in 2024.

Add Value also announced the creation of two units: one focused on microservices and development, Add Value Dev, and the other on cloud projects, Add Value Cloud. Investment details were not provided. Tradesys is platinum reseller of Citrix, SonicWall, Microsoft, Veeam and Sentinel One, while HashCloud is a premium AWS partner.

In an interview with BNamericas earlier this year, Add Value's managing partner and CMO Thiago Spósito said the company was aiming at 30% revenues growth this year, on the back of government contracts.

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Argentine real estate investment startup Simplestate signed an agreement with Uruguay’s Grupo Solanas for dollarized investments in Brazil, Argentina and Uruguay.

“Today, profitability in dollars is being sought. Simplestate offers the opportunity to access an investment model based on first-class buildings located in main areas of Uruguay,” the startup said in a release.

Solanas is a holding that for the past 30 years has focused on the development of tourism, hotel and real estate in those countries. Simplestate began operations in 2019. It currently reports more than 60 projects in its portfolio and 56,000 users.

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Startup accelerator Osten Moove launched Osten Invest, a unit focused on investments in early-stage digital firms.

The goal is to raise at least 50mn reais for Brazilian startup investments within two years.

The unit kicked off with a round in partnership with Riverdata. Investors can guarantee participation in the business with contributions starting at 5,000 reais. The company also offers a 10% equity stake in exchange for 750,000 reais in investments made through the equity modality.

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Santander Brasil will grant 50,000 scholarships for back-end, front-end, data science and data engineer programming in Brazil, the bank said in a release.

The courses will be provided free of charge in partnership with the Ada Tech school, specialized in teaching programming and technology.

Interested university students can register through October 16 on the Bolsas Santander website.