Investors on the prowl for Latin American unicorns

Sebastian Kanovich struggled to get retailers around the world to take him seriously when he co-founded the Latin American digital payments startup dLocal in Montevideo in 2016.

“It took a lot of no’s before we got our first yes,” he told Reuters. Uruguay, our birthplace, isn’t exactly known for its technological prowess.

After five years, the structure has taken on a new lease on life.

It debuted on the New York Stock Exchange in June as dLocal (DLO.O), and it is now valued at $16 billion as a result of partnerships in 30 countries with Amazon (AMZN.O) and Uber (UBER.N). Other Latino-owned tech firms are now following suit.

According to data provided to Reuters by CBInsights, Latino startups raised $14.8 billion in new funding in the first nine months of 2021, a 174 percent increase over the same period last year.

SoftBank Group Corp. (9984.T), General Atlantic, and Sequoia Capital have all taken note of the Latino boom and are investing accordingly. Wall Street banks are now selling Latino “unicorns” on the open market in the United States.

According to six people with direct knowledge of the transactions, ten Latin American tech startups are planning initial public offerings (IPOs) in the coming year. QuintoAndar in Brazil and Kavak in Mexico are two of these startups.

All sources requested anonymity in connection with the upcoming listings in order to protect their identities.

Clip, QuintoAndar, and Kavak were the three people who declined to comment. Creditas is currently unable to provide any information about an IPO.

Berkshire Hathaway Inc (BRKa.N) is one of the investors in Nubank, which aims to be the most valuable financial institution in the region when it goes public in the United States next year.

Bankers and dealmakers alike have suggested that the growth in Latin American unicorns, or private companies valued at at least $1 billion, is being driven by an unprecedented surge in Internet usage, which has been accelerated by pandemic lockdowns as more customers shop online.

FAVORITE FINTECH ENTITY

Fintech startups will account for 40% of total funding in 2020, according to LAVCA, the Latin American private equity association, with a focus on financial technology.

Because they serve the “unbanked,” or those who do not have regular access to traditional banking, JPMorgan-backed C6Bank and SoftBank’sCreditas benefit the most from investor interest.


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