Startup Funding in Latin America Causes VC Investors To Rethink

 Startup Funding in Latin America Causes VC Investors To Rethink

• Post author:Sasi George
• Post published:November 12, 2020

For those who have been tracking venture funding or startup funding in Latin America, the past few years have been exciting as the funding not just increased but sucked in billions.

A growing number of global investors have been investing big bucks in the region turning Latin America into a mature market.

The Latin America Private Equity and Venture Capital Association (LAVCA) released its annual report mentioning the amount of venture money that has been pumped into the region.

The New York-based firm noticed that VC funding in the region has more than doubled to breach $4.5 billion in 2019 in comparison to $2 billion in 2018.

Despite the ill-effects of Covid-19, startups in the region have still garnered significant funding rounds. Credit line startup AlphaCredit‘s $110 million Series B extension in May and trucking company CargoX‘s $81 million Series E in April are a couple of eye-catchers.

Top 3 Funded Startups

The top-funded VC-backed tech startups in Latin America have collectively raised over $3.2 billion as of last month. The highest funded startup in Latin America is Rappi, the on-demand delivery startup based in Colombia with over $1.45 billion in total disclosed funding.

Rounding up the top 3 most well-funded startups in the region, we find Brazil-based challenger bank Nubank ($1.11 billion in total disclosed funding) and Argentina-based fintech Uala ($195 Million).

This region is home to 5 of the most well-funded tech startups that have raised at least $100 million in funding. Mexico-based Clip and Chile-based Adexus follow the top 3 startups. Only Rappi and Nubank have raised more than $1B+ in equity funding, giving them the prized unicorn status.

Other Top Funded Startups

Fintech startups in Latin American and the Caribbean have been garnering pace with respect to the number of startups in the fintech landscape that have come up.

These include firms such as Nubank, Uala, and Bankingly (banking) to mobile payments (Clip) and crypto (Bitt).

Rappi has an all-purpose delivery application in the pipeline that aims to be a personal assistant for users. Through this platform, it would be possible to buy products of different categories such as restaurants, supermarkets and beverages.

The application also includes a virtual wallet RappiPay, through which it is possible to make transfers and payments.

Nubank is a techno-savvy financial services startup in Brazil redefining standards. They offer a no-fee credit card that can be managed via a mobile app as well as a digital account (NuConta).

Uala is a virtual banking app that offers a prepaid MasterCard to enable users keep track of expenses, complete transfers, and more. Clip allows an individual or merchant to accept a range of payments using a smartphone plug-in and a revolutionary risk-management system to manage and process transactions for businesses.

Total Funding In Latin America

51 startups raised above US $10 million in 2018. And then raised a follow-on round of another US $ 10 million (up to US$1 billion) in 2019- that include Loft, Rappi, Gympass, Loggi, Nubank, and Quinto Andar.

In 2019 126 startups in Latin American raised US$1 million and above in verified venture funding and are still in operation.

As venture investment scaled in Latin America it has produced a growing army of startups backed by both the region’s tech investors and global investors. Using venture backing as the standing criteria LAVCA established the Latin American Startup Directory to identify and track these startups on growth.

The surge was inspired by SoftBank Group Corp on their unveiling a $5 billion Innovation Fund described as the largest-ever technology fund focused on the Latin American market.

Records Go Tumbling

2019 was a record year in terms of fundraising in Latin America. Nearly $1.85 billion was raised across 28 investments in comparison $675 million across 30, in the previous year. $600 million was raised across two new funds by Kaszek Ventures, including $375 million for a fourth flagship fund and $225 million for the first opportunities fund. While Canary raised $75 million for its second fund.

Kaszek Ventures founded a decade back in Argentina has been actively investing in Latin America from circa 2011, namely QuintoAndar, Loggi and Nubank, and many others.

Co-investments between global and Latin American investors are rising. 70% of the $4.6 billion VC dollars was deployed via co-investments with more than one investor involved—regardless of their location. And 37% of the VC dollars were deployed via a co-investment involving one Latin American investor and a global investor.

For Ruvolo but for $50 million the rest involved cross-border co-investment. This indicates a global cooperation that supports startups with substantial traction with growth capital that was not seen earlier.

Amazing Deals In The Coffer

Transaction sizes are also growing; 11 disclosed deals over $100 million and 18 over $50 million have been disclosed this year. And other rounds including Brazilian fintech startup Nubank’s $400 million raise (led by Silicon Valley-based TCV), Colombian on-demand delivery unicorn Rappi’s $1 billion haul, and Brazilian real estate tech startup QuintoAndar’s $250 million Series D has it closing in on unicorn status.

Looking at the breakdown of majority of venture dollars it isn’t surprising where is went. Brazil led across all stages of VC investment, capturing 54% of investment in 2019 (222 startup investments totaling $2.49 billion).

Mexico was the next most by number of deals and revenue raised (100 startup investments totaling $649 million).

Federico Antoni and Fernando Lelo de Larrea founded ALLVP in 2012 a Mexico City-based venture firm. With investments in 25 tech startups spanning Latin America and Spain with focus on edtech, fintech, healthtech and ecommerce.

Fintech shows the way

Fintech continues its top position as the domain receiving the largest amount of investment dollars in Latin America. This was after 2019 when a shift was seen with more money going into logistics and distribution startups.

Brazil’s Gympass raised $300 million from SoftBank, General Atlantic, Valor Capital and  Atomico. Brazilian fintech startup Creditas received $231 million from Amadeus Capital, SoftBank, Santander Innoventures and Vostok Emerging Finance.

Sao Paulo-based logistics platform Loggi raised $150 million from GGV Capital, SoftBank, Velt Partners, Fifth Wall Ventures and Microsoft. SoftBank and Tencent invested $150 million in Argentinian fintech startup Ualá.

New trends

Mexican digital bank Klar raised $57 million in debt and equity. And in the aftermath of COVID its credit customer base has tripled. Startup funding in Latin America is paving a new phenomenon in the rise of venture debt and alternative investments.

It’s important especially for fintechs. But this piece of the pie hasn’t been available for Latin American founders.  What remains to be seen if the momentum could be interrupted by the COVID-19 pandemic.

Despite uncertainty around the depth and length of this downturn, we can only be rest assured that Latin American countries will spring back strongly with technology playing a bigger and varied role. Habits will evolve and digital adoption will enhance the landscape. The economic anxieties will cause organizations and consumers to review their lifestyle, priorities and behaviors.

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Augmented Reality App Development The Future You Can See

 Augmented Reality App Development The Future You Can See

• Post author:Sasi George
• Post published:November 6, 2020

Augmented Reality capabilities overlay digital information in some form or another on top of the analog world where we live in.

Augmented Reality app development has the necessary potential to disrupt a wide range of industries such as retail, real-estate, finance, travel, healthcare and fashion. Augmented reality is an extension of existing technologies as any user with a smartphone can access this facility.

Application developers, firms and businesses utilize AR to superimpose digital information over objects in the real-world.

Having cleared the initial hiccups of adoption just as virtual reality did, Augmented Reality is experiencing widespread implementation in several domains especially across the mobile app technology domain. Therefore it has the capability to gain traction with consumers easily.

Location-based AR apps

Augmented reality apps can be basically split into two divergent systems: location-based and marker-based.

The inherent ability of mobile devices to track their position is put to use in the location-based AR apps. Thence relative data is provided based on a specific location of the individual device. This is usually enabled by an AR app in the mobile.

AR has the capability to empower location sensitive information as far as real world application is concerned, like if you want to locate your vehicle in a fully-packed car park or a student is keen to understand constellations in the sky, AR can make it possible.

Marker-based AR apps

Marker-based AR apps differ from location-based apps in numerous ways. They operate by allowing the software to identify particular patterns via the device camera (eg a QR code / brand logo), then go about overlapping digital information on the real-world landscape.

When user points a smartphone at a particular object or setting, they can now in fact see the virtual UI on top of the object. But if the image is animated / 3D, then the digital overlay sits on top of this recognised pattern.

Marker based AR apps operate in a manner such that it sanctions the software to pinpoint patterns via the camera like a QR code or brand-logo. After which it would overlay digital information in a real world scenario. This means that when a user points their smartphone at a particular object or setting, they can see a virtual UI on top of that object.

Future of Augmented Reality mobile apps

There isn’t any doubt that the potential of AR is huge. There are many real world applications that have being deployed in a commercial setting such as in health, manufacturing, travel, and retail.

When taking into consideration the future of AR app development, the most innovative game-changer would be when users no longer need to use a screen. The present situation is such that most of the Apps as of now require a camera that will enable the overlay of images on top of the real-world setting.

Using a smartphone is a convenient route of enabling AR, but it also behaves as a substantial barrier to acceptance. It is time the world begins to think out of box instead of sticking to two-dimensional confines of traditional computing.

Development of Augmented Reality Apps

To develop an Augmented Reality app there are some important considerations to be noted. Most AR apps will overlay 3D imagery or text on top of real-time images that has been processed by a user’s device. Therefore in order to develop an AR app the ability for image processing is an imperative requirement.

This is what would make it possible for you to develop an app that would be capable of tracking markers / natural features in the real-world realm.

It is important that the images should look credible and realistic; therefore care should be taken if any particular software is being used to generate images. Also make sure to correctly align the images in relevance to the real-world scenario.

Ensuring that both the above elements are taken care off is important and complicated from the development viewpoint. But remember the consequences of the inability to develop a realistic UI/UX would result in the app providing very low value to the end user.

Adoption of AR in Various Domains By 2022

Making an app innovative, intuitive and simple would immensely improve your likelihood of success in an ever-expanding growing market. Consumers will insist on a seamless UI/UX, this would be one facet that would be essential in the future considering the rapid growth of AR acceptance.

Building Augmented Reality Apps

Building AR apps is more than image analysis or processing techniques. The need for traditional mobile app development capabilities with deep understanding of app development processes are imperative and essential.

AR app developers should possess 3D modelling skills, computer vision and imaging experience, and extensive understanding of available mobile technologies. It is generally perceived that C# and C++ are the most preferred programming languages for augmented reality app development.

The reason being, these both provide an easy access point for developers who possess these skills. An experienced development team with in-depth comprehension of 3D modelling is significant from an image viewpoint.

Development of AR apps is not just about mobile development expertise or 3D imaging. It is more about being passionate about innovation and new technologies. But passion alone will not take you all the way. Just as in any mobile app development project, achieving success in AR depends of keeping your mind on the end result.

Top AR development platforms

There are few platforms to consider regarding development of an AR app. Few of the best AR platforms that are worth a look are ARLab SDK, ARPA SDK’s, DroidAR (for Android), Metaio SDK, Wikitude SDK and Vuforia SDK. Most of these mentioned allow support for multiple platforms that includes iOS, Android, Google Glass, Windows and Unity.

Some platforms are specifically focused on a particular platform such as DroidAR product that is focussed on Android. While some other products enable you to develop mobile apps across multiple platforms. And Wikitude SDK specialises in PhoneGap and Xamarin integration.

It’s important to choose the right technologies and products while developing an AR app so to drive your project without too many hassles. Using anyone of the above platforms could optimize your time to market.

Launch an AR App Development project

The pandemic has further reinforced the demand for mobile app development proficiency. It has been estimated that only 10% of firms have apt developer talent they require. And most firms have a huge backlog of 20 to 25 mobile app projects at any given time. From the commercial perspective is clear that big businesses find it difficult to source high-quality app development expertise.

As the demand for AR apps increases, businesses across diverse verticals will seek to enter the market. So getting in touch with an experienced and well managed firm is the best way out of this predicament.

 

Funding For Startups In The Middle East | Promising In Spite Of COVID

 Funding For Startups In The Middle East | Promising In Spite Of COVID

• Post author:Sasi George
• Post published:October 30, 2020

As the pandemic took hold of several countries in its wake this year, the Middle East’s startup ecosystem quickly adapted to meet the changing scenario.

Though the outlook seemed grim, many startups managed to find opportunities for growth via online markets.

The Middle East and North Africa’s venture capital realm could see something in the region of $1 billion worth investments this year as funding for startups in the Middle East look for capital and government investments in venture funds.

Investors’ passions are showing interesting trends in the direction of funding to create a new surge of startups in proven sectors such as transport, food delivery, fintech, restaurant platforms, agri-tech, real-estate sector, and cloud kitchens.

Last Year Scenario

Last year was promising for the Mena region as a record number of startups received venture funding. The number of deals increased by 31% for 564 firms and the total value of funding increased by 15% to $704 million last year.

This was basically due to the $200 million funding deal for Careem. If you remove the investment in Careem you will still notice that the total amount that was invested in the ecosystem is still up by 12%.

Middle East Startups 2020

If you look at the Top 100 Startups in the Middle East that are Most-Funded this year, you will realize that they have raised close to $960 million combined in total funding. But what is more surprising is that more than half the funding has been secured by the top 10 startups amounting to $550 million.

The U.A.E. has the most attractive and active startup ecosystem, with 33 of the 50 start-ups headquartered in the UAE. Saudi Arabia comes next with seven startups headquartered there. While Egypt is home to four start-ups, Jordan has three, Lebanon two, and Kuwait just one.

Meanwhile government-backed fund of funds of $1 billion has been launched by Saudi Arabia’s Public Investment Fund and $100 million Al Waha Middle East Fund of Funds by the Bahrain government and $250 million allocated for Mena technology investments by Abu Dhabi strategic investment firm Mubadala.

Middle East Venture Capital Firms

Pure Harvest Smart Farms a startup based in U.A.E tops the most funded list after it secured $136 million to carry out its ambitious expansion plans. An e-grocery marketplace platform Nana is the highest funded Saudi startup after it managed to raise $29 million from investors.

The most active middle east venture partners and investors in the MENA region go to RAED Ventures, and Wamda Capital, with investments in 10 and 8 start-ups respectively.

Among the top start-ups it was noted that 8 were co-founded by women. This includes Nadine Nehme from AI-based health advisor Medicus AI, Rita Huang from logistics service provider iMile, and Nadine Mezher from online financial advisor Sarwa.

As the funds begin to be deployed the increased capital will further lead to higher investment in the start-up eco space.

MENA Region Funding

The MENA region is already witnessing growth in the number of investors compared to last year, as the number of institutions funding Mena deals increased by 33% to 212, of which 75% were regional funds. Startup funding in Dubai is a lucrative prospect as identified by the investors.

There were also a record number of exits, with 31 start-ups selling. This includes the region’s first Unicorn Careem that was into ride hailing. The takeover by Uber was worth $3.1 billion.

The creation of the Souq and Careem stories has created the Fear Of Missing Out environment for investors. Therefore now whether family owned or corporates that previously overlooked the Mena region will look at venture capital as an asset in this region which was previously deemed untenable.

Funding From Other Regions

International VCs from South East Asia are slowly but surely beginning to train their sights on the Middle East as a region where valuations are much lower than their home turfs. And opportunities to either invest directly or through their portfolio companies will continue this year barring any major geopolitical issues.

Egypt topped the list in terms of number of deals last year, with 25% of the total, followed by the UAE with 23% and Saudi Arabia with 12%.

However, in terms of deal values, the UAE comfortably retained the top spot and still attracts 60% of all Mena venture funding. Egypt was second, attracting 14% of total funding and Saudi Arabia was third with 9%.

To comprehend distinctions in detail regarding the entrepreneurship in the Mena region and disparities from one country to the other, an Arab Entrepreneurship Maturity Index (AEMI) has been developed. This index utilizes definite key indicators so as to identify the enthusiasm in MENA markets to back startups and help them achieve growth.

Popular Funding Niches

In terms of the most popular sectors, FinTech companies attracted 13% of total deals, e-commerce firms 11% and delivery and transport firms 9% each.

But in terms of volume the transport and delivery niche gained 19% of the total funds raised, real estate raised $100 million through listing portal Bayut’s parent company EMPG took 15% and e-commerce companies bagged 14%

With the latest funding, EMPG plans its investment in the middle east to further strengthen its position as the leading player in the real estate market by investing in their tech platforms. Currently they are present in 40 cities across Spain, Morocco, UAE, Pakistan, Romania, and Bangladesh.

Top Funding Firms

Swvl with operations in more than five countries is an Egyptian bus for hire firm. After raising both Series A and B in 2018 they recently raised $42 million in Series C, showcasing tremendous growth.

They will face tough competition from Uber and Careem, now having joined hands and having surpassed Swvl in Egypt (and other countries). But Swvl will indeed give them a run for their money on its home turf.

One of the fastest growing EdTech startups, Noon Academy has over 2 million registered students. Now grown to become a social learning platform, enabling peer study groups for students to study with friends and compete with one another and request for tutors too.

Conclusion Funding For Startups In The Middle East

The leading financial comparison website YallaCompare which deals with car insurance to credit cards, flights to phone plans, plans to use the recently raised funds to expand its presence in the region. Currently 75% of online insurance transactions are in their domain.

The Mena region has long had the right formula to succeed and be investment friendly as well. They have a large, growing, and young population.

Moreover there are success stories such as Careem to build up necessary fervour, and sovereign wealth funds deploying capital.

This is in fact an unequivocal sign to US-based investors. The more comfortable they become with their Mena-based counterparts, the more likely they will give the portfolio companies a thoughtful look.