Growing up bouncing between southern Florida and Puerto Rico, knew one thing for certain — always have a Plan B.

Being raised by a single parent, money was tight. When disasters hit — such as hurricanes — hard times quickly became harder.

“I remember, I think, it was Hurricane George. It was devastating,” said Henry, remembering bathing outside in what little water was available. “We went through some rough times. But you can’t rely on others, you rely on you.”

Those experiences — and that mindset — helped prepare Henry for what came last fall. Like the hundreds of thousands of other employees in the tech industry, Henry was laid off from where he was vice president of revenue.

“It was tough, but it also was an opportunity,” said the 33-year-old Henry. “You can either cry about it or move on.”

Henry moved on to Agricompa, a fintech company that enables small and medium-sized farmers in Latin America to access loans and other services specifically for them.

While many may seek out the cold comfort of a new job with a well-established company after the trauma of a layoff, Henry — and many others like him — have instead used the tech job cuts as their chance to pursue their dreams.

“In a sense, it was a relief,” he said, “I could focus on what I wanted to do.”

Lessons from baseball

What Henry wanted to do was help Latin American farmers after seeing firsthand many of the issues they faced.

In 2013, Henry bummed around Venezuela playing baseball after taking time off from and that school’s baseball team.

“I hung out at farms,” Henry said. “I actually did my thesis on the informal economy in Venezuela.”

Even after graduating, Henry continued to hang around Latin America, first taking a baseball development job with before moving on to a sales job in Puerto Rico for — which offers credit to underserved consumers in emerging markets around the world — in 2015.

The job appealed to Henry and his personality for several reasons. First, sales stoked his competitive fire like baseball and sports did. He could prepare and plan for sales — just like he would practice and train in baseball.

“Winning a sales call is like winning an at-bat,” Henry recalled. “I also liked that it’s about tribulations, persistence and consistency. In baseball, you have to learn to accept failing. I couldn’t, I used to let the strikeouts get to me.

“Now, I don’t let that phase me,” he said

He also fell in love with the entrepreneurial and startup aspect of the business. Lastly, he liked the impact he thought the company could have.

“Bouncing between the U.S. and Latin America, I sometimes didn’t have the right paperwork or ID, so I could relate,” Henry said. “I liked the positive social impact.”

After 17 months there, Henry followed that entrepreneurial spirit he fell in love with and co-founded Miami-based online real estate company before moving on to fintech identity startup MetaMap.

There, Henry led the expansion for sales, product, marketing and customer success in all of LatAm, Brazil, Africa and Southeast Asia. He helped grow revenue from zero to $18 million ARR in 18 months.

Hard times

During his time at MetaMap the seeds for his future were planted — literally.

When the pandemic hit, Henry was living in Mexico City. Not enamored with the idea of isolating with the city’s other 9 million people, he and his wife Oris went to the Dominican Republic and bought a three-acre farm.

The idea of farming and being self-sufficient appealed to Henry, and the isolation of the pandemic seemed a perfect time to try it out.

However, that would not be the only life-changing moment about to happen for Henry.

In October of last year, Henry got the call that he and his team were being laid off. His job, with a $240,000 salary and $130,000 in bonuses, was gone.

While a layoff can be a traumatic milestone for many, Henry’s baseball career would not let him see it that way.

“In sports, you can always be waived or let go,” Henry said. “So I always have the feeling you can be let go at any time.”

His upbring also prepared him for such a moment. Growing up in a home where finances could sometimes be “mismanaged” taught Henry the importance of saving for a rainy day.

“I always had something saved, I always have a Plan B,” he said.

Growing up in the midst of the Global Economic Crisis in 2008, also likely affected his mentality toward money and savings, he added. 

“These crises affect how you deal with a lot of stuff,” he said.

Support from those close to him also did not hurt.

“My wife always has pushed me to do my own thing,” he added.

Fintech for farmers

A few days after getting the layoff notice, what would become Agricompa was founded with three of his former MetaMap partners — Pierre Antoine Rohr-Lacoste, Carlos Ruiz and .

Through talks with coffee roasters and cacao farmers in Mexico, Colombia and Africa, Henry knew small growers seemed to always suffer from cash-flow issues. 

One of the main issues is limited access to cash, Henry said. Many farmers in Latin America don’t have the paperwork or documentation for their farms, limiting the extent the property can be used as an asset.

There also is not immediate accessibility to a bank in many of these regions.

“In some of these rural areas, you can be two to three hours away from a bank,” he said.

There also can be hangups in the time it takes distributors and packing companies to actually pay small farmers.

Henry knew he could help fix some of these problems.

“I’m not a pro farmer, but I’m a pro at building teams and startups,” he said.

While the startup is still in beta-stealth, the concept is to offer an all-in-one agro management platform that allows packing and trade companies to manage cash flow and consolidate operations while being able to pay out farmers quickly with fast and hassle-free financing and ERP solutions.

Despite not being fully launched, 150 farmers are already on the platform. The company has eight employees and plans to operate first in the Dominican, Mexico and Colombia.

The startup also has raised $100,000 from ’ Funded, not Fired program that is supporting laid off tech workers’ dream of starting their own companies.

“Day One has been great,” he said “We do a weekly call with other founders in Day One’s portfolio. It has been really helpful.”

The company also has additional money from other angel investors and the like. Henry expects to start seeking out a proper Series A in the final quarter of the year.

Henry, who has always had a passion for farming and roasting coffee, has great expectations for what the company can become as he writes the next chapter of his story.

“We want to be the for agro,” Henry said.

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Overall, investment in reported seed through growth stage financings in Q1 was down 84% from the year-ago quarter, per Crunchbase data. That puts Central and South America, which just over a year ago ranked as the fastest-growing startup investment region in the world, on the short list for the fastest shrinking.

For perspective, we chart out investment, color-coded by stage, for the past nine quarters below:

Particularly notable in 2023 is the extent to which previous active investors have cut back. , which participated in 34 rounds in 2021 and 2022, has joined just two this year. , another formerly busy dealmaker, has done no deals in the region this year.  And , the Brazilian firm that ranked as the most active 2021 investor, has also dramatically slowed its investment pace.

Jumbo-sized rounds of $100 million and up are also apparently a thing of the past. In 2022, SoftBank Latin America Ventures alone participated in six such deals. In Q1 of this year, not a single venture round of $100 million or more closed, per Crunchbase data.

Table of Contents

• Late stage down sharply
• Early stage and seed also take a hit
• Deal volume drop is less pronounced
• Things are down from a very high peak
• Looking forward
• Methodology
• Glossary of funding terms

Late stage down sharply

One can see investors’ recent distaste for big, late-stage financings reflected in funding totals, charted out below:

For Q1, late-stage and technology growth investment totaled just a couple hundred million, down 87% from a year ago. The drop-off is even more pronounced compared to the peak quarter — Q2 of 2021 — when a whopping $5 billion went to late-stage and growth financings.

The lackluster exit environment is likely a contributing factor to the slowdown. There were no acquisitions of venture-backed Latin American companies that exceeded $100 million in Q1 this year, per Crunchbase data. High-profile IPOs also weren’t happening.

Early stage and seed also take a hit

It’s not just late stage that investors are avoiding. Early-stage funding also dropped precipitously year over year, as the chart below illustrates:

For Q1, roughly a couple hundred million dollars went to early-stage deals, down from $1.5 billion in the year-ago quarter. 

Things were also down at the seed stage, albeit slightly less dramatically, as the chart below shows:

Per Crunchbase data, reported seed investment was down 73% year over year in Q1. We expect this decline will likely get a bit less pronounced over time, as it’s not uncommon for seed financings to get added to the dataset weeks or months after they close.

Deal volume drop is less pronounced

Deal volume is down too, but not as markedly as investment totals. For Q1 of 2023, Crunchbase tallied a total of 129 reported seed- through growth-stage rounds, down 71% year over year.

For a sense how deal volume compares across stages for the past nine quarters, we charted out round counts below:

Things are down from a very high peak

As we repeatedly note how far things have fallen from 2021 and early 2022, it’s wise to keep in mind that investment was reaching unprecedented heights at that time.

The latest year-over-year declines look a bit less distressing when we compare to earlier years, when venture investment in Latin America was much lower. While current funding levels still don’t look great against these earlier comps, at least they look a little less terrible, as the chart below illustrates: 

Looking forward

So what will it take for funding to go up again? For those bullish on the Latin American startup scene, there are some positive indicators that momentum could pick up again.

Most prominent among these is Kaszek Ventures announcement last week that it has raised $975 million across two new funds: a $540 million early-stage fund and a $435 million vehicle for later-stage investments. 

So certainly there’s dry powder to be deployed. It’s just a question of when, where and at what valuations.

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of April 3, 2023.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

We have made a change to how we include corporate funding rounds in our reporting as of January 2023. Corporate rounds are only included if a company has raised an equity funding at seed through a venture series funding round. 

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

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That’s the narrative playing out across Latin America in the wake of a sharp shift in the startup funding climate. Per Crunchbase data, investors put $8.28 billion into the region in 2022, down 79% from 2021, a record-setting year.

Over all of 2022, investment was down heavily at both early and late stage, while seed investment actually rose a bit. In the fourth quarter, funding at every stage came in far below year-earlier levels.

For perspective, we chart out total funding, color-coded by stage, for the past 12 quarters below:

A couple quick takeaways stand out from the chart above. First, the magnitude of declines from Q1 to Q4 of 2022 was quite dramatic, evidence that the year started on a much more optimistic note than it ended. 

Secondly, it shouldn’t be understated that 2021 was a hard act to follow. While 2022 was below peak, it was still the second-highest funding year of the past decade, as illustrated in the chart below:

To get a clearer sense of the ups and downs of the 2022 funding scene, we break things down by stage below, including a look at the largest rounds and most active investors.

Late stage

We’ll kick things off at late stage, which has seen some of the steepest declines.

For all of 2022, investors put $3.57 billion into late- and growth-stage deals, per Crunchbase data. That’s a drop of over 72% from 2021, when over $13 billion went into late-stage dealmaking.

The year-over-year comparisons are even starker for the fourth quarter. During Q4 of 2022, just $450 million went to Latin American late-stage deals, down 84% from a year earlier. 

For a sense of the funding trajectory, we chart late-stage funding for the past five quarters below:

Even with the funding slowdown, we did see some good-sized rounds in the latter half of 2022. Standouts include , a Chilean maker of plant-based meat products that raised $70 million, and , a Brazilian business intelligence software provider that pulled in $50 million.

Early stage

Early-stage investment also slipped lower every quarter last year.

For the full year, an estimated $3.22 billion went into early-stage venture rounds. That represents a decline of just over 40% from 2021.

The fourth quarter came in especially low, with $344 million in early-stage investment, down 80% from a year earlier. For the bigger picture, we aggregated early-stage investment for the past five quarters below:

Some big early-stage rounds did get done, even in Q4. This includes a $28 million Series A for , an Argentina-based digital wallet startup, and a $27 million Series B for , which provides credit for Brazilian farmers.

Seed stage

Seed-stage investment in Latin America actually hit an all-time high in 2022. Reported deals totaled nearly $1.16 billion, up 9% from 2021.

However, the year-over-year gains are attributable entirely to heightened activity early in 2022. In the second half of the year, reported seed funding slowed considerably, as illustrated in the chart below:

Because there is often a lag between when seed funding occurs and when it is added to the dataset, it’s likely the Q4 numbers will rise in coming weeks and months. These additions, however, are still unlikely to change the general pattern of declining investment.

Big investors pull back

In 2021, much of the surge in venture funding to Latin America was the result of large, global investors upping their activity in the region. In 2022, by contrast, many of these active investors pulled back amid a worsening exit climate and diminishing valuations for their existing holdings.

The pullbacks were most pronounced in the second half of the year. , for instance, had no disclosed investments in the latter half of 2022, per Crunchbase data. had just two. Both firms were among the most active global investors in Latin America in 2021.

Regional investors also cut back. , the Brazilian firm that ranked as the most active regional investor in 2021, sharply reduced deal count in 2022, per Crunchbase data, most markedly in the second half. Deal count for Brazil-based , the second most active in 2021, was also down considerably in 2022.

Given that active investors did fewer deals across virtually all geographies in 2022, the pullbacks to Latin America aren’t necessarily indicative of growing pessimism about the region’s startup potential. Rather, this looks more like the familiar cycle of a down year after a very up year. 

Methodology

The data contained in this report comes directly from Crunchbase, and is based on reported data. Data reported is as of Jan. 4, 2023.

Note that data lags are most pronounced at the earliest stages of venture activity, with seed funding amounts increasing significantly after the end of a quarter/year.

The most recent quarter/year will increase over time relative to previous quarters. For funding counts, we notice a strong data lag, especially at the seed and early stages, by as much as 30 percent to 40 percent a year out.

Please note that all funding values are given in U.S. dollars unless otherwise noted. Crunchbase converts foreign currencies to U.S. dollars at the prevailing spot rate from the date funding rounds, acquisitions, IPOs and other financial events are reported. Even if those events were added to Crunchbase long after the event was announced, foreign currency transactions are converted at the historic spot price.

Glossary of funding terms

Seed and angel consists of seed, pre-seed and angel rounds. Crunchbase also includes venture rounds of unknown series, equity crowdfunding and convertible notes at $3 million (USD or as-converted USD equivalent) or less.

Early-stage consists of Series A and Series B rounds, as well as other round types. Crunchbase includes venture rounds of unknown series, corporate venture and other rounds above $3 million, and those less than or equal to $15 million.

Late-stage consists of Series C, Series D, Series E and later-lettered venture rounds following the “Series [Letter]” naming convention. Also included are venture rounds of unknown series, corporate venture and other rounds above $15 million.

Technology growth is a private-equity round raised by a company that has previously raised a “venture” round. (So basically, any round from the previously defined stages.)

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This latest fund was Quona’s third, and it far exceeded the firm’s initial target of $250 million. Quona started to raise the fund a year ago, taking an extra quarter to close the deal. Its last Fund 2 was announced in 2020 at $203 million. 

We spoke with , a co-founder and general partner at the firm, who confirmed that 75% of Quona’s existing LP base backed the new fund alongside new investors. Engel credited Quona’s success to both fund performance and the firm’s thesis to “radically improve access and quality of financial services to the unbanked.”

The firm operates in emerging markets across Latin America, India, Southeast Asia, Africa and MENA. Brazil and India are anchor countries with Mexico, Indonesia and South Africa secondary markets. These five countries represent three-quarters of Quona’s investment capital with people on the ground.  

“These countries have been really overlooked and ignored and underinvested in for many, many decades,” Engel said.

‘A thriving ecosystem’

Quona is always looking at newer market opportunities and seeks out markets with three crucial factors: an enabling regulatory environment; emerging low- and middle-income class; and mobile penetration and internet access to serve these markets. 

The firm has been in the top quartile performance for venture funds since its inception, a fact that demonstrates  “impact and profits don’t necessarily need to be mutually exclusive,” Engel said.

Engel co-founded the firm with and in 2015, spinning out from Massachusetts-based global nonprofit .

Quona invests an initial check size of $1 million to $5 million at Series A. As the firm has gained experience and conviction, it has started investing earlier at seed. It reserves funds for follow-on investments to support portfolio companies. The firm has an additional five partners with a total of 14 investment professionals.

“Everyone at Quona is trying to build something bigger than themselves, and this notion that our legacy really is to leave a thriving ecosystem,” said Engel. 

Quona’s portfolio companies have raised $4 billion in capital in total. Investments include: Brazil-based , which allows consumers to get loans against property; digital banking platforms from Mexico and from Jakarta; and South Africa-based mobile point-of-sale company . All of these companies target underserved markets.

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Now, one Brazilian venture firm is ready to help keep that momentum growing in a unique way.

, an early-stage firm with more than $120 million under management, told Crunchbase News exclusively that it has launched a new program to help first-time founders graduating abroad kick off their business ideas in Brazil.

Dubbed JetPack, the program is designed to help people who live outside of Latin America’s largest country explore innovative ideas with a little help.

In December, Canary closed on a $75 million fund to invest in about 50 early-stage startups operating primarily in Brazil. The São Paulo-based firm generally provides the first institutional capital–seed or Series A financing–to tech companies in the country.

Izabel Gallera, the Canary partner leading JetPack’s efforts, told me there are “a lot of inefficiencies in Brazil that are much wider than in the U.S.”

The real estate, health care and financial services sectors are prime examples. In fact, those industries in Brazil have a reputation for being inefficient and expensive.

“Here we could use a lot of technology to become more efficient,” Gallera said. “Even a little bit of technology could help gain a lot of efficiencies. In Brazil, we have much more explicit opportunities of building something that can solve a real problem.”

As such, the firm is “very bullish” with regard to those market opportunities.

“We believe more capital flowing to great talent will be able to help solve a lot of problems in the country,” Gallera added.

, managing partner of Canary, said the program is being founded on the premise that Brazil is seeing a turning point where more and more talented workers “are moving away from traditional careers.”

He also echoes Gallera’s sentiment regarding opportunity in the country.

“In Brazil, we have tons of opportunities to tackle as we have a huge number of sectors that are either fragmented or low tech,” Toledo told me.

Since it began operating in 2017 through December 2019, Canary has invested in more than 60 companies which, combined, had raised over $400 million in subsequent rounds. Portfolio companies include , (which we covered here), (whose recent $175 million round we covered in this piece), and .

Program details

With JetPack, Canary is looking for an ambitious team of first-time founders who live abroad and want to return to, or go to, Brazil to start a company. A formed team or being Brazlian are not requirements, but living outside of Brazil is.

Canary says its standards are high, and the firm will only choose teams if they see true potential for a long-term relationship. It will evaluate criteria such as ambition, fit with Canary’s investment model, founders market fit and execution capability.

Once a founder is chosen, Canary will invest $50,000 uncapped, which means the financing will be priced only in the next venture round. The firm will cover all LLC costs, but for future rounds a founder will need to open a company in Delaware.

The team will have office space in São Paulo during the extension of the (industry-agnostic) program or until its first funding round. Canary says it will be on hand to help when the team is ready to raise its first round of institutional venture capital. It will also provide full access to its network of tech founders and operators, talent to recruit, possible first clients (for B2B companies in particular), market specialists and enterprise senior executives, among others.

In return, Canary expects the right to lead that first venture round (assuming both parties agree). It also asks a team “to maintain a keen and exclusive focus on validating its business hypothesis.”

“We want you to focus on building a business, but don’t expect micromanagement from our side,” the firm said.

Interested parties can apply .

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But in countries like Brazil, these types of spaces are not common for a number of reasons. (Historically, most people have lived at home with their parents until they marry, for example.) However, as the Latin American country’s society evolves, the real estate scene is attempting to keep up. One proptech startup is hoping to help bring the country up to date in terms of its apartment offerings.

As part of that goal, São Paulo-based has raised a $4.7 million pre-seed round led by Brazil’s . , a cross-border firm with offices in São Paulo and San Francisco, also participated in the round in addition to , Founder , Managing Partner and Partner . (It’s important to note that $4.7 million is an unusually large amount for a pre-seed round anywhere, but especially in Brazil, despite having seen a surge in venture funding in recent years.)

I talked with co-founder and CEO , who told me more about what the startup is doing exactly. He also helped shed some light on how Yuca fits into an evolving narrative of how São Paulo’s core is being impacted by the growth of its startup scene.

Background

Campos was born in the Northeastern Brazil city of Recife, Pernambuco, before moving to the U.S. when he was 14 years old. His first experience with the venture world was when he helped set up a small VC practice with a family office in São Paulo in 2012.

“Today’s unicorns were just getting started then,” he recalls. In fact, Campos’s first deal was investing in fitness discovery platform , which last February. He also invested in fintech startup and QuintoAndar, another Brazilian real estate-related startup (that happened to become a unicorn with a $250 million Series D raise last September).

It was that experience that led Campos to “fall in love with tech as a whole.”

So last year, he started Yuca after realizing how big a problem finding affordable housing was becoming in tech hubs around the world.

“Most of those cities have an affordability problem where people can’t find decent housing at a decent cost,” Campos told me. “So we put those two things together to come up with this business model.”

Knocking down walls

While the funding round was actually raised last summer, Yuca did not disclose it publicly until recently. Last week, the company launched its first “unit.”

What does that mean? Well, it started off by looking at the real estate supply in São Paulo, and noticed that tech companies as a whole were starting to congregate in two specific central neighborhoods that were well-served by public transportation.

But when the Yuca team looked at the real estate supply in those areas, it realized the apartments were not only decades old, but “pretty rundown and super expensive still because of their location.”

“They offered no amenities or parking spaces even,” Campos said.

So Yuca set about buying some of those units, completely tearing them down, and rebuilding them as shared apartments. Its target demographic is tech workers who want to live close to where they work.

Yuca has bundled the apartments with services such as cleaning and concierge, and takes care of all the backend issues like water and electricity. It’s also made sure its terms are “super convenient and flexible, not the standard Brazilian 30-month contract, which we think is absurd,” Campos said.

“We’re not looking to make a quick buck like an rental,” he added. “We want to solve the problem of how people live.”

Rent starts out at about $500 a month, including condo fees, utilities, cleaning services and support.

“Even for Brazil, this is very affordable for a new apartment,” Campos said.

All units, each about 200-220 square feet, are fully renovated with four units fitting in one apartment. There’s about 600 square feet of common area, including a centralized living room and kitchen.

The buildings that were torn down were typically approximately 1,800-square-foot, three-bedroom apartments that included a separate maid’s quarters.

“In Brazil, it’s common for the middle and upper class to have a live-in maid, but these days younger folks are not wanting to have that relationship with help inside the house, so those floor plans don’t work anymore,” Campos told me. “So we turned those maid’s quarters into a fourth bedroom and, for us, tearing down that wall is a figurative thing.”

The renovation process takes anywhere from one to three months, and Yuca currently has 30 units under renovation in the pipeline. It plans to launch one apartment per week over the next two months with the goal of “ramping up and scaling faster in the future.”

Investor POV

For , founder of ONEVC, Yuca represented an attractive investment opportunity for a number of reasons.

For one, he said, the opportunity for full-stack proptech companies “is extremely attractive at the moment, given how low real interest rates are.”

“Investors are looking for yield, and Yuca is a perfect example of top- and bottom-level efficiencies that are brought to this market,” Sorrentino said. “When better utilization per square feet meets a technology-enabled apartment, you have a different, promising IRR (internal rate of return) profile than a regular REIT (real estate investment trust).”

He also points to the global “epidemic” of loneliness with the rising use of smartphones ironically being a big contributor.

“Once you think through the implications of co-living spaces, they are a massive indirect solution for a mental health problem that is increasing in our society, since community building is essential for the co-living model to thrive,” Sorrentino added.

Also, millennials and Gen Z are less worried about a large apartment than they are about being close to work and surrounded by a good community.

“Branding and a human approach to this solution is vital,” he said.

Last August, I wrote about another co-living startup that raised venture money. Specifically, , a Los Angeles-based real estate startup providing co-living space for students and  young professionals, raised a $10 million Series B at a $100 million valuation.

The trend of rising rental costs in hot job markets has brought all sorts of new ideas regarding living to the market. And so long as jobs continue to cluster in large urban environments, the market may keep generating demand for new housing arrangements like what Yuca, Tripalink and others can provide.

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As evidence of that, this morning, Brazilian digital real estate platform it has closed on $175 million in Series C funding co-led by and (a16z). , , , and others, also participated in the funding.

A $175 million raise is an impressive amount for any startup, but especially one that was founded just two years ago in Sao Paulo, Brazil. has seen rapid growth early, saying that it’s grown more than 10 times year-over-year to notch “over $150 million in annualized revenues in its first full year of operation” via more than 1,000 transactions. It’s also more than quadrupled its number of employees in the past year alone, growing from 100 a year ago to more than 450 today.

Notably, the funding marks the first and only investment in Latin America for Vulcan Capital (the investment arm of Microsoft co-founder Paul Allen) and the first and only Brazilian investment for Andreessen Horowitz. This is yet another example of the growing global investor interest in the region, a phenomenon that Crunchbase News has been tracking for a while now.

This latest financing brings its total raised to an impressive $275 million since its founding. Other backers include Brazil’s and angel investors such as of PayPal, of Palantir, of Instagram and of Nubank. While the company declined to disclose valuation, The eported that the Series C brings Loft “closer to unicorn territory.”

Transforming an industry

and founded Loft in early 2018 and today serve as its co-CEOs. The aim of the platform, in the company’s words, “is to simplify the purchase and sale of apartments by bringing improved organization, data and efficiency to the residential real estate market.” Loft combines real transaction data with a proprietary machine learning model “to price every apartment in its markets at the unit level” with the goal of increasing liquidity and transparency for buyers and sellers. Apartment renovations are one service the company offers as part of what it describes as an end-to-end home buying and selling process.

They claim there’s no similar offering in Brazil.

Loft plans to use its new capital in part to expand across both Brazil and Latin America, starting with Rio de Janeiro in the first quarter of 2020, Mexico City in the second quarter and several other cities soon after. The company is also expanding into new product categories and plans to scale its financial product lines, including mortgages and insurance, “significantly” in 2020.

It’s focused only on apartments (which are typically more prevalent in Latin America than single-family homes).

The company, naturally, also wants to keep hiring and expects to add another 100 employees in the first quarter of 2020 alone. It recently tapped , the former director of regional operations at UberEats in Latin America, to serve as the general manager of its Mexico operations.

Market context

To Loft, the opportunity is huge with an estimated $6 trillion residential real estate market in Latin America. It sees plenty of room for improvement, saying that a lack of data transparency and a consolidated marketplace has led to “low-quality and redundant listings, high-asking prices and exceedingly long-sell times.”

For Andreessen Horowitz General Partner the company’s exponential growth over the past year is impressive and illustrates the “massive need” for more transparency and efficiency.

“We see Loft’s technology-enabled approach as a significant investment opportunity, particularly in rapidly growing emerging markets like Latin America, and we’re thrilled to be expanding our funding to help bring the company’s innovative platform to more markets across the region,” Rampell said in a written statement.

In general, the Brazilian startup scene has essentially exploded over the past two years. We’ve reported on a number of large deals in the region, including most recently, , a São Paulo-based mobile gaming company that claims to have over 1 billion players, becoming a unicorn with a $60 million Series A round of funding led by .

In September, we covered the funding of another Brazilian real estate-focused startup: Sao Paulo-based raised a $250 million Series D in a round that took that company “to unicorn status.”

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New York-based , out of Chile, Spain’s , Silicon Valley-based , other unnamed funds and angels also participated in the round, which comes just months after the company raised a pre-seed round of an undisclosed amount.

, former president of (a large ride-sharing company operating in Latin America, Spain, and Portugal) founded earlier this year with a mission to “disrupt the Latin American grocery industry.”

At first, ��ü���ٴ� operated a website only but recently launched a mobile app. It is the first supermarket in Mexico with no physical stores, according to Weder.

How It Works

Customers can buy their groceries directly from the website or via the app and ��ü���ٴ� delivers the order to the customer’s location of choice.

While other entities such as Walmart, for example, deliver groceries in Mexico, ��ü���ٴ� prides itself on working directly with fresh produce suppliers in an effort to offer “the freshest” fruits, vegetables, meats and fish in the market. It also offers a variety of products such as pantry staples, personal hygiene and beauty, home and cleaning, drinks and pet-related items.

Mexican, and Latin American consumers as a whole, have been reluctant to order groceries from some of these larger retailers and companies due to concerns about freshness and quality, Weder said.

The company opts to choose items only from local suppliers, thus giving them a new channel to sell their products (which can get buried in larger supermarkets). ��ü���ٴ� also prides itself on developing fair trade agreements with suppliers.

Initially, ��ü���ٴ� is focused on Mexico City but plans to expand into additional Mexican cities as well as other regions in Latin America such as Brazil, Colombia, Peru and Chile, according to Weder.

Regional Demand

, partner at Foundation Capital and also a Mexico City native, said he was impressed with Weder’s work at Cabify and was excited to get involved with this venture early on.

“We’ve seen that type of model of warehouse and D2C for groceries be very successful in other geographies,” he told me. “But that model didn’t quite exist in Mexico yet.”

Increased internet penetration and the availability of smartphones in the region “opens up a world of opportunity for an entrepreneur to reach consumers directly,” Gonzalez said.

The investment in ��ü���ٴ� marks Palo Alto, Calif.-based Foundation Capital’s fourth LatAm investment. It’s also backed Colombian unicorn . The funding is also another example of increasing global investor interest in Latin America. Mexican startups in particular raised a total of $310 million in venture funding in the first half of 2019, according to LAVCA, compared to $75 million in the first half of 2018, as you can see in the chart below.

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The firm, with offices in São Paulo and San Francisco, has closed its first fund, ONEVC FUND I LP, Crunchbase News has learned exclusively.

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The firm has $30 million under management, along with $8 million to invest in “special opportunities” (more about those later). Since it was formed in November 2017, ONEVC has already seen two portfolio companies become unicorns and another (San Francisco-based ) exit.

ONEVC claims to be the only seed firm “to have a presence in Silicon Valley and São Paulo.”

“We invest in both geographies acting as a strategic partner for U.S. companies that want to become global early and Latam founders that want to connect with Silicon Valley, either to set up offices here or raise capital from U.S.-based VCs,” said ONEVC founder . “We believe this is one of the most unique and profitable opportunities available now within VC.”

In general, Brazil has been the largest recipient of venture funding in an increasingly hot investment climate in Latin America. Earlier this year, we reported that venture funding in the region’s largest country exploded in 2018 to $1.3 billion, representing nearly two-thirds of all venture money raised in Latin America as a whole last year, according to , the Association for Private Capital Investment in Latin America.

“Now is the perfect time to build a cross-border seed firm between the U.S. and Latam,” said Sorrentino.

ONEVC’s first close on the fund was of $10 million in July 2018. It decided to double its target, raising $20 million about a month later. Then it put a $30 million cap on the fund, which it closed in July, according to Sorrentino.

The remaining $8 million is in special-purpose vehicles that were created for later-stage investing in companies like Colombian on-demand delivery unicorn (which we reported on here) and Brazilian shipping logistics platform . In both cases, members of the ONEVC team had previously backed the companies at earlier stages).

“We see it as a systematic way to allow investors to co-invest on almost every opportunity out there,” Sorrentino told CrunchbaseNews. “LPs love it as well. Some want access to direct investments when companies are more mature so we structured some deals around that  because we knew there was market demand.”

Strong Background

Prior to forming ONEVC, the six-person team (all Brazilians) invested in 71 companies (including fitness discovery platform , real estate unicorn(which we reported on here) and , which we covered here) and saw a combined 27 exits in less than five years. With those investments, the team achieved a combined return of nearly eight times, “cash on cash,” (or an 87.8 percent realized IRR), according to Sorrentino.

“We were able to personally anchor our first fund, having almost five times more skin in the game in our deals than your average emerging manager,” he said.

Since its inception in November 2017, ONEVC has backed 15 startups, including three U.S.-based companies. As mentioned above, the team was an early investor in Colombian unicorn Rappi and back-office integrator . Rappi went on to raise over $1.4 billion from the likes of , , , and others.

“We were able to partner with Rappi, by making a commitment to…help them open their operations in Brazil, by hiring the first set of local employees,” Sorrentino said. “We continued to be involved in further financing rounds, investing and making connections for the founders.”

Its story with Pipefy was similar, but in that case, ONEVC was “deeply involved” in the hiring of the company’s first two employees in its San Francisco office.

Sorrentino said ONEVC also introduced Pipefy CEO to other U.S.-based investors. In August, the startup closed a $45 million Series B led by .

Investment Philosophy

ONEVC invests from pre-seed through Series A from its flagship fund, writing checks ranging from $350,000 to $1.5 million. As mentioned above, the firm will consider later-stage deals, and structures special purpose vehicles that are primarily offered to its LP base.

The firm looks for companies that primarily fall into two different categories. One, those that are global from day one, according to Sorrentino. It is also focused on companies that are tackling multibillion dollar markets with “inherent barriers to entry,” whether they are regulatory or cultural.

The six main sectors it is drawn to are urban mobility and logistics, financial services (fintech), e-commerce and marketplaces, enterprise software, healthcare and agricultural technology.

Brazil is particularly full of opportunity, Sorrentino said, considering the interactions that Brazilians have with the internet “are massive.”

“The key here to helping them is to identify people that, irrespective of macroeconomic and political challenges, can build a business that can thrive and grow.”

Despite its focus, Sorrentino said you will never see him “waving the flag of Latinx.”

“We’re just here to help phenomenal founders build massive companies in Latin America,” he said.

Quality Deals Take Priority

ONEVC said it’s all about quality over quantity. It intentionally invests in fewer startups because it is very hands-on and involved with its portfolio companies. Its three main goals are to help them raise more funding, recruit talent and sell, according to Sorrentino.

“We believe if we serve our entrepreneurs with excellence in these three areas, there will always be a place at the table for our firm,” he said.

The firm’s deep commitment is evident to visiting partner , who has invested in a handful of deals alongside ONEVC, including both backing HeyDoctor (which was recently by ).

“The ONEVC guys are kind of like the investor equivalent of the type of founder that the YC community looks for,” Flora told Crunchbase News. “They’re animals, just real hard workers. They have a lot of energy and put it to work for their founders. As an investor, it’s easy to write checks but they go beyond that and really dig in and help companies figure things out operationally.”

As a result, Flora said, ONEVC has a reputation of working closely with its founders and for sticking to their investment thesis.

“When they get excited they do their homework and are really disciplined,” he added. “They say no to a lot of stuff other investors would look at if not on thesis. But they’re consistent. They have a certain way of investing and stick to it.”

co-founder and CEO of ONEVC portfolio company , can attest to Flora’s statements.

The São Paulo startup, which provides rental cars for on-demand drivers in Latin America, was the only Brazilian startup in Y Combinator’s most recent winter batch. It’s been growing its revenue about 30 to 50 percent every month since it was founded in June of 2018, according to Neto.

In March, Kovi raised a $10.6 million seed round led by Y Combinator and Brazilian VC firm that included participation from ONEVC, and others.

Neto first met Sorrentino during the YC program when Kovi was raising its seed round.

“We were looking for a cross-border VC that had experience in Latin America, and also a presence in the U.S. that could better understand our market and needs,” he told Crunchbase News. “As VCs, ONEVC has been very hands on which is great for this stage. And we’ve built a great trusting relationship to share the most critical problems we have with them.”

In announcing the new fund, ONEVC also noted that it has tapped as a new full-time general partner of the firm, alongside Sorrentino and . (The firm also has three venture partners). A recent Stanford Business School graduate, Yoshimura  will be primarily based out of São Paulo.

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This morning, and reported that its latest deal involves leading a $110 million round for , a Brazilian online home goods platform.

The round is nearly triple raised by the Curitiba-based company since it was founded in 2009, according to its Crunchbase profile. MadeiraMadeira raised a $27.3 million in November 2017.

Palo Alto-based also participated in the latest funding round along with existing investor out of Boston, examples of how Latin America as a whole is seeing increasing global investor interest.

According to Reuters, the Brazilian etailer, “which offers around a million home furnishing products,” (think Wayfair here in the U.S.) will use the new capital to “invest in technology, logistics and customer services.”

The company saves money on overhead by not having a lot of inventory. For example, according to Reuters, if a customer orders a piece of furniture off its site, that order goes straight to the manufacturer.

Former professional race car driver , CEO and co-founder of MadeiraMadeira, told Reuters his company is looking to expand outside of Brazil into other regions in Latin America at some point. The company is already “break-even,” according to Reuters.

Last week, we wrote about how Sao Paulo-based real estate startup raised $250 million from SoftBank.

In general, Brazil has been the largest recipient of venture funding in an increasingly hot investment climate in Latin America. Earlier this year, we reported that venture funding in the region’s largest country exploded in 2018 to $1.3 billion, representing nearly two-thirds of all venture money raised in Latin America as a whole last year, according to , the Association for Private Capital Investment in Latin America. That’s 52 percent more than the $859 million invested Brazil in 2017, and a staggering 369 percent increase from the $279 million raised in 2016, as you can see in the chart below:

At the rate SoftBank is going, 2019 numbers will far exceed those of 2018.

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