Archive for January, 2020

Latin America Roundup: Loft raises $175M, SoftBank invests in Mexico’s Alphacredit and Rappi pulls back

Sophia Wood Contributor Share on Twitter Sophia Wood is a principal at Magma Partners, a Latin America-focused seed-stage VC firm with offices in Latin America, Asia and the U.S. Sophia is also the co-founder of LatAm List, an English-language Latin American tech news source. More posts by this contributor Latin America Roundup: XP’s chart-topping IPO, Wildlife becomes a unicorn, SoftBank backs Konfio Latin America roundup: Neobanks raise $205M+; Softbank backs VTEX Brazil’s famously tricky real estate market has long drawn international investors to the region in search of tech solutions. This time, Brazilian startup Loft brought in a $175 million Series C from first-time investor in the region, Vulcan Capital (Paul Allen’s investment arm), alongside Andreessen Horowitz. Loft is also a16z’s first and only Brazilian investment.  Co-founded by serial entrepreneurs and investors Mate Pencz and Florian Hagenbuch in 2018, Loft uses a proprietary algorithm to process transaction data and provide more transparent pricing for both buyers and sellers. The startup uses two models to help clients sell properties; either Loft will value the apartment for listing on the site, or they will offer to purchase the property from the buyer immediately. Many real estate platforms in the U.S. are shifting toward a similar iBuyer model; however, this system may be even more apt for the Latin American market, where property sales are notoriously untransparent, bureaucratic and tedious. Loft will use the capital to expand to Rio de Janeiro in Q1 2020 and to Mexico City in Q2, bringing on at least 100 new employees in the process. It also plans to scale its financial products to include mortgages and insurance by the end of the year.  AlphaCredit raises $125M from SoftBank Mexican consumer lending startup AlphaCredit became SoftBank’s new Mexico bet this month, with a $125 million Series B round. AlphaCredit uses a programmed deduction system to provide rapid, online loans to individuals and small businesses in Mexico. To date, the startup has granted more than $1 billion in loans to small business clients in Mexico and Colombia, many of whom have never previously had access to financing.  AlphaCredit’s programmed deductions system enables the startup to lower default rates, which in turn lowers interest rates. For more than eight years, AlphaCredit has encouraged financial inclusion in Mexico and Colombia through technology; this round of investment will enable the platform to consolidate its holding as one of the top lending platforms in the region. The investment is still subject to approval by Mexico’s competition authority, COFECE, which has previously blocked startup deals such as the Cornershop acquisition in 2019.  SoftBank’s biggest bets back off in Latin America While SoftBank is still rapidly deploying its Latin America-focused Innovation Fund, some of its largest companies are stepping on the brakes. In particular, SoftBank’s largest LatAm investment, Rappi, recently announced that it would lay off up to 6% of its workforce in an effort to cut costs and focus on their technology. The Colombian unicorn has been expanding at a breakneck pace throughout the region […]

Trump to halt immigration from Africa’s top tech hub, Nigeria

The Trump administration announced Friday it would halt immigration from Nigeria — Africa’s most populous nation with the continent’s largest economy and leading tech sector. The restrictions would stop short of placing a full travel ban on the country of 200 million, but will suspend U.S. immigrant visas for Nigeria, along with Eritrea, Kyrgyzstan and Myanmar. That applies to citizens from those countries looking to live permanently in the U.S. The latest restrictions are said not to apply to non-immigrant, temporary visas for tourist, business, and medical visits. Tanzania and Sudan also face new restrictions. Both countries were suspended from U.S. diversity visa program, also known as the green card lottery. The news was first reported by the Associated Press, after a press briefing by Acting U.S. Homeland Security Secretary Chad Wolf. The Department of Homeland Security later provided TechCrunch with Wolf’s remarks and a summary on the measures. The primary reason for the new restrictions, according to DHS, was that the countries did not “meet the Department’s stronger security standards.” Secretary Wolf noted, “the restrictions are not permanent if the country commits to change.” The move follows reporting over the last week that the Trump administration was considering adding Nigeria, and several additional African states, to the list of predominantly Muslim countries on its 2017 travel ban. That ban was delayed in the courts until being upheld by the U.S. Supreme Court in 2018. Nigeria’s population is roughly 45% Muslim and the country has faced problems with terrorism, largely related to Boko Haram in its northeastern territory. Restricting immigration to the U.S. from Nigeria, in particular, could impact commercial tech relations between the two countries. Nigeria is the U.S.’s second largest African trading partner and the U.S. is the largest foreign investor in Nigeria, according to USTR and State Department briefs. Increasingly, the nature of the business relationship between the two countries is shifting to tech. Nigeria is steadily becoming Africa’s capital for VC, startups, rising founders and the entry of Silicon Valley companies. Recent reporting by VC firm Partech shows Nigeria has become the number one country in Africa for venture investment. Much of that funding is coming from American sources. The U.S. is arguably Nigeria’s strongest partner on tech and Nigeria, Silicon Valley’s chosen gateway for Africa expansion. There are numerous examples of this new relationship. In June 2019, Mastercard invested $50 million in Jumia — a Pan-African e-commerce company headquartered in Nigeria — before it became the first tech startup on the continent to IPO on a major exchange, the NYSE. One of Jumia’s backers, Goldman Sachs, led a $20 million round into Nigerian trucking-logistics startup, Kobo360 in August. Software engineer company Andela, with offices in the U.S. and Lagos, raised $100 million from American sources and employs 1000 engineers. Facebook has senior management from Nigeria, such as Ime Archibong, and opened an innovation lab in Nigeria in 2018 called NG_Hub. Google launched its own developer space in Lagos last week. Nigerian tech is also home to a growing number […]