São Paulo, Brazil. Image courtesy of Loïc Fürhoff via Unsplash.
Last year was a stellar year for Latin American startups, and 2022 is poised to continue the momentum. Venture capital investment in the region surpassed $14 billion in 2021, a threshold that just a couple of years ago seemed like a distant dream.
The rapid digitization caused by the pandemic gave way to exponential growth for existing startups, as well as a larger playing field for new ones looking to disrupt outdated industries.
Known unicorns in the region such as Rappi and Nubank continued to raise massive financing rounds — in total, the two companies raised a combined total of $1.65 billion in funding. Additionally, on December 9, Nubank made its market debut on the New York Stock Exchange, raising another $2.6 billion in post-IPO equity, bringing the company’s valuation to $41 billion, and immediately leading it to become Latin America’s most valuable listed bank.
Not only have investors poured more money into the region than ever before, but the average size of LatAm startup funding rounds also rose from $9 million in 2020 to $22.5 million in 2021. Investors are looking for companies that can prioritize a regional expansion from the get-go and tackle a much larger addressable market immediately.
In its review of tech investment in Latin America for 2021, the Association for Private Capital Investment in Latin America (LAVCA) found that fintech remains the dominant industry of interest in LatAm, followed by e-commerce and proptech. There has also been significant growth in edtech and healthtech, two industries that have attracted eager investors as a direct result of pandemic-related opportunities.
The Org took a look at 2021’s nine newly minted unicorns in Latin America.
Fintech, fintech, fintech
Clara: $158 million Pre-seed to Series B
Clara is the corporate credit card, payments and spend management solution for Mexico and LatAm. Founded in early 2021 with a pre-seed round of $3.5 million, the fintech startup raised an additional $30 million from DST Global just three months after launching operations and closed out the year with a total funding of $158 million, allowing it to reach unicorn valuation in record time for a Latin American company.
Clip: $250 million Series D
Clip is Mexico's leading digital payments and commerce platform that empowers businesses to engage and transact with their consumers via their terminals. The Block-like startup raised a $250 million capital investment led by the SoftBank Latin America Fund and Viking Global Investors. The series is the largest of its kind for a payments company in Mexico and established Clip as the first Mexican fintech unicorn with a $2 billion+ valuation. Clip was founded in 2012 and has raised a total of $403 million.
Konfio: $235 million Series E
Konfio provides digital banking, payments and software tools designed to boost growth and productivity for small and mid-size enterprises. The startup became Mexico’s fourth unicorn after the September 2021 Series E extension funding round led by Tarsadia Investors and QED, bringing it to a valuation of $1.3 billion.
Cloudwalk: $340 million Series C
Cloudwalk provides innovative payment services in Brazil using a platform that integrates blockchain and artificial intelligence. After its $340 million Series C round led by Coatue, the startup was valued at $2.15 billion. On average, it processes over $2.4 billion annually through its platform, which serves around 150,000 businesses in the country.
NotCo: $245 million Series D
The Chilean foodtech company NotCo reinvents animal-based foods using plant-based alternatives. Its proprietary AI, which the company calls Giuseppe, can recreate the same taste as animal products but in a natural, affordable and sustainable way.
Its current product roster includes NotMilk, NotMayo, NotIceCream and NotBurger. These all look like, cook like and taste like their animal product alternatives.
NotCo has raised a total of $360 million dollars at a $1.5 billion valuation. Notable investors include Tiger Global Management, General Catalyst and Kaszek.
Merama: $445 million Series A, Debt Financing and Series B
Founded in 2020, Mexican startup Merama is in a different category altogether: It’s a private equity firm that invests in leading brands with online presence across Latin America. Its mission is to be the best and largest group of e-commerce companies across the region. Merama’s business model consists of an initial investment in which it buys a significant stake in a company (but not 100% of the shares), then implements a strategy to fuel exponential growth and several years down the line offers an exit option to current stakeholders.
In 2021 Merama raised half a billion dollars in its Series A and Series B rounds led by SoftBank, Valor Capital Group and Advent International. Merama currently has over 180 employees and a portfolio of more than 20 brands across the region. Two notable brands the startup acquired are Redlemon, a consumer electronics company out of Mexico and Bebesit, a Chilean e-commerce for baby products.
MadeiraMadeira: $190 million Series E
MadeiraMadeira is an online marketplace that specializes in home products and furnishings. It’s a one-stop shop where buyers can purchase everything from a bathtub to an ice machine and a wardrobe.
Founded in 2009 out of Curitiba, Brazil, the e-commerce company has raised a total of $338.8 million. Notable investors include Dynamo, SoftBank and Latin America Ventures.
Nuvemshop/Tiendanube: $590 million Series D & E
The Brazilian startup Nuvemshop provides small and midsize businesses in Latin America with the necessary tools to set up and manage their online businesses. With over 90,000 active stores, Nuvemshop integrates products, payments and shipments with different sales channels, such as Facebook, Instagram, marketplaces and physical stores. In March the startup raised a $90 million Series D led by Accel and shortly after in August raised a $500 million series E led by Tiger Global and Insight Partners at a valuation of $3 billion.
CargoX: $200 million Series F
Technology freight broker CargoX developed a trucking marketplace that connects truck drivers with corporations. Its platform provides information on a truck's existing freight capacity to eliminate empty space inefficiencies. The platform also identifies the best way to move a customer's shipment and enables companies to reduce their shipping costs and enhance profitability.
The Brazilian startup was founded in 2013, employs a workforce of 1300 people and has raised over $390 million from investors that include SoftBank, Tencent, LightRock, Blackstone Group and Goldman Sachs.