February was a busy month in Latin America’s tech scene, with several startups raising major rounds of funding and Apple opening its first retail store in Brazil. Here’s the news you don’t want to miss:
Big players
As Whatsapp grabbed headlines all over the world with its $19 billion acquisition by Facebook, less attention was paid to a smaller but interesting announcement: mobile giant Telefónica has signed a partnership with Asian messaging service Line around Firefox OS.
As TNW’s Jon Russell explained, “the deal is Line’s first with an overseas carrier and gives Telefónica exclusive access to the new Line for Firefox OS app, which is only available to the operator’s customers in Venezuela, Peru, Spain, Colombia, Uruguay, Brazil and Mexico. In addition, Telefónica’s will pre-install Line on future Firefox OS handsets that it launches.”
As you may remember, Line had made clear that it was keen to further boost its adoption in Latin America, and the fact that its partnership with Telefónica includes “significant marketing campaigns” could help it achieve its goal.
In addition, Telefónica and Mozilla revealed at MWC 2014 in Barcelona that new devices running Firefox OS are soon set to make their way to Argentina, Costa Rica, Ecuador, El Salvador, Guatemala, Nicaragua and Panama.
Apple Store opened its first retail store in Brazil, much to the excitement of local tech aficionados, 2,000 of whom showed up for the grand inauguration on February 15. As we previously reported, the store is located in Rio de Janeiro, and there are now rumors that a second store is set to open in one of São Paulo’s malls.
'Obrigado' to everyone who visited our new store in Rio de Janeiro today and to our terrific customers across Brazil! pic.twitter.com/3nFPxN4m3Y
— Tim Cook (@tim_cook) February 15, 2014
This store opening means that Brazilian customers can now participate in physical workshops, interact with Apple retail employees and of course, buying Apple’s products in person, rather than from its website. However, it is important to note that it won’t change Apple’s local pricing. In other words, it will still be as crazily expensive to buy Apple gear from its Rio store than it currently is on its online store, where the iPhone 5s retails from R$2,799 (around $1,195 USD).
Meanwhile, Amazon is now selling Kindle devices through its Brazilian online store, which launched as an e-book store in December 2012. This move is Amazon’s second attempt at direct sales of its devices in Brazil; as you may remember, the e-commerce giant had briefly partnered with a Brazilian company to sell Kindles through physical kiosks in local malls. However, those retail locations quickly shut down, and during the last few months, Brazilian customers could only buy Amazon’s e-readers from third-party retailers.
The fact that Amazon’s online offering now goes beyond digital books is also interesting, leading specialized blog Publishing Perspectives to predict that other verticals such as printed books will eventually follow, despite the fact that logistics remain a challenge in Brazil.
In addition, Publishing Perspectives also reported on signs that Barnes & Noble may be planning to start selling e-books in Brazil, although the company declined to comment on the rumor.
As for Google, it has announced that Brazilian customers can now buy Samsung Chromebooks that have been made in Brazil. According to a post on Google Brasil’s official blog, the fact that these are the first Chromebooks to be manufactured locally contributed to making them more affordable to Brazilian customers, with a $1,099 price tag (around $470 USD).
As ZDNet pointed out, Acer Chromebooks currently retail for around $539 USD in Brazil, compared to $199 USD in the US. While Samsung’s locally-manufactured models will be slightly less expensive, it remains to be seen whether Brazilian consumers will understand exactly what they are buying:
“In more mature markets such as the US, the clear difference in price is a factor that sets Chromebooks apart from traditional notebooks. Here in Brazil, the price similarity requires extra caution when marketing these devices to a general audience,” warned Bruno Freitas, a research manager at IDC Brazil, quoted by ZDNet.
Still at Google, a Brazilian executive confirmed that Google Street View’s users will soon be able to virtually wander around stadiums that will host this year’s FIFA World Cup. The company had already uploaded similar content from other sporting venues, including South Africa’s hosting stadiums. According to IDGNow, Google has already finished capturing images in several locations with its Trekker camera backpack, but is not able to confirm a launch date for the entire gallery as construction works are not over yet in all stadiums.
Microsoft is also interested in Brazil’s geographic data, but from a different perspective: as we reported earlier this month, the company has started a project to map the country’s favelas, in order to help their communities “fully participate in the digital town square in ways that many of us in the developed online world take for granted.”
Expansions and new launches
Digital goods payment service BoaCompra announced its expansion to Colombia and Peru. In both countries, the company is targeting the many online gamers who do not have an international credit card but are still keen to buy virtual currency using local payment methods. BoaCompra is owned by Brazilian Internet company and content portal UOL, and boasts partnerships in several South American countries, Portugal, Spain and Turkey. Its latest expansion results from its ambition to “create the first Latin American e-wallet for gamers, and a complete solution for game developers and publishers looking to bring their titles to this region.”
Developer forum Stack Overflow has launched a version in Portuguese, which it describes as its first “Stack Overflow International,” and where the Portuguese-speaking IT community can post questions and answers. According to the site’s newly-hired Brazilian community manager, Stack Overflow’s decision to start with Portuguese was motivated by two factors: a large number of talented Portuguese-speaking developers, and the fact that they are more comfortable communicating in their native language than in English. the blog post also included a map of Stack Overflow’s visitors from Portuguese-speaking countries:
Social e-book publishing startup Widbook has passed the milestone of 200,000 members worldwide. This is a significant increase – when the company opened offices in San Francisco and released its iOS app last December, it only boasted 130,000 users. Widbook is originally from Brazil, where it raised seeding funding from W7 Brazil Capital in January 2013.
Brazilian cloud services provider and Internet veteran Mandic will launch a Box and Dropbox rival during the second week of March, ZDNet reports. The new product is called True Box and packages start from R$22,90 ($9,60 USD) per user with 10 users and 50GB of shared storage space. It is aimed at the corporate market, with an emphasis on security, and Mandic expects True Box to represent as much as 10 percent of its revenue within a year from launch.
As we reported a few weeks ago, Mandic has recently received a large capital injection from Intel Capital. The deal was announced at the end of December, but its exact size remains unknown beyond the fact that the firm’s rounds tend to range from $2 million to $20 million USD.
Some got acquired…
American digital money transfer provider Xoom Corporation acquired BlueKite for approximately $15 million in cash and equity. While Xoom already operates in 31 countries, this acquisition means that it will now benefit from BlueKite’s expertise when it comes to cross-border bill payments and mobile phone top-ups, which are expected to become part of its offering. 
As you may remember, BlueKite had raised a $1.5 million seed round led by PeopleFund to develop its model and give immigrants new ways to take financial care of family members back home, beyond the traditional remittances.
BlueKite’s base in Guatemala City and staff of 30 people will now constitute Xoom’s new development center. As for BlueKite’s former CEO, Bobby Aitkenhead, he will report to Xoom’s President and CEO John Kunze as vice president in charge of Xoom Bill Pay and Xoom Top Up.
Meanwhile, consolidation in the food delivery sector continues, with Mexican website SuperAntojo joining PedidosYa’s fast-expanding network. This vertical witnessed two M&A events in January: iFood acquired Central do Delivery to grow in Northern and Northeastern Brazil, while Colombia’s Clickdelivery bought Buenos Aires Delivery.
…and some got funded
Online real estate marketplace VivaReal has raised a $12.75 million round led by the Dragoneer Investment Group of San Francisco, DealBook reported. This is Dragoneer’s first investment in an Internet company in Brazil, but the firm’s founder Marc Stad now expects to make additional investments in the country. As you may remember, VivaReal previously raised a Series B funding round led by Valiant Capital Partners, with follow-on investments from Kaszek Ventures and Brazilian fund Monashees Capital.
According to the startup’s CEO Brian Requarth, who was a keynote speaker at TNW Conference Latin America 2012, all three firms participated again in this new round, which includes $8.75 million in cash and a call option for $4 million.
Brazilian ed-tech startup Descomplica has raised a Series B round led by previous investor The Social+Capital Partnership, TechCrunch reported. Additional existing investors Valar Ventures, Valor Capital Group and 500 Startups also participated, in addition to an AngelList syndicate backed by names such as Naval Ravikant himself, Eric Ries and David Sacks.
We previously listed Descomplica as one of nine Latin American education startups to know and it now has even more means to scale its learning platform with this new round that reportedly brings its total funding to just over $7 million.
It is worth noting that fellow Brazilian education startup Qranio, which was also on that list, has also raised new funding, more precisely R$600k ($255k) at a R$20 million valuation ($8.51 million USD) from three unnamed Brazilian angels.
English news publication Colombia Reports has received funding from Medellin-based venture firm GITP Ventures. Co-owner and chairman Conrad Egusa explained why this deal made sense for his company:
“The funding round is led by prominent investor Michael Puscar, the founder and President of GITP Ventures. Puscar is a hi-tech veteran and successful angel investor who most recently sold his company, Yuxi Pacific, to private equity firm Blue Loop Capital. Three of GITP’s investments, most recently Plum Analytics, had successful exits in recent months.
“With this investment, Colombia Reports is now able to increase its editorial staff and push many of its development projects forward. These include our new mobile website, and features including a classified section and job board.”
In addition to acquiring Central do Delivery (see above), food delivery company iFood also announced having secured $2 million in additional funding. This was a follow-on participation from Latin American mobile content and publishing platform Movile, which became iFood’s strategic partner last year with a $2.6 million investment. This new funding brings the company’s total financing to $6.1 million, including a previous investment from VC firm Warehouse Investimentos.
While this is obviously a large sum, it is worth noting that iFood is competing with well-funded competitors, such as Rocket Internet-backed HelloFood, who went on a shopping spree over the last few months and whose parent company Foodpanda just raised an additional $20 million in funding. Capital aside, iFood is hoping that Movile’s expertise on mobile platforms will help it outpace competitors. According to the company, the number of orders it received through mobile device rose from seven to 60 percent since it first partnered with Movile.
Start-Up Chile and TechPeaks alum Memeoirs has raised a $300,000 investment from Italian printing giant Pozzoni Group, plus €200,000 equity-free matching funds from the region of Trentino. As you may know, Memeoirs focuses on creating books out of its users’ online conversations (see our review). While it started out with emails and Facebook, it now plans to add other social media platforms.
Competition winners and selection finalists
At least one of the teams in 500 Startups’ next batch of accelerated companies comes from Latin America: Brazilian startup Já Entendi (whose name roughly translate to “I got it”). According to its AngelList profile, it comes from Curitiba and works on accelerating professional learning.
Several competitions also took place during the latest edition of Campus Party Brazil, including Latin America’s first Startup Weekend Education, a Wayra contest and a hackathon dedicated to the Internet of things.
In addition, Colombian newspaper El País revealed that a new Campus Party would take place in Cali, following previous editions in Bogotá and Medellín. The new event will take place in late June or early July, coinciding with FIFA World Cup in Brazil.
Funding sources
As government-supported program Start-Up Chile launches its tenth call for applications, its Brazilian counterpart Start-Up Brasil has refreshed the list of accelerators it works with. Startupi points out that it will be welcoming six new partners: Acelera Cimatec (from Salvador de Bahia), Baita Aceleradora (from Campinas), C.E.S.A.R. Labs (connected to Recife’s tech hub), TechMall (from Belo Horizonte), Ventiur and Wow (both from Porto Alegre).
Three entities that took part in the previous edition are now out: Microsoft’s Acelera Brasil, Outsource Brazil and Pipa. It is unclear whether or not any of these had re-applied, but the fact that they are being replaced by initiatives from different Brazilian states also seems to answer to criticism on geographic concentration. 21212, Acelera MGTI, Aceleratech, Papaya, Start You Up and Wayra remain on the list.
Meanwhile, a new accelerator has been created in Brazil: Abril Plug and Play. As its name suggests, it is the result of a partnership between Brazilian media giant Grupo Abril and Silicon-Valley based Plug and Play Tech Center. Selected startups will receive seed funding in exchange for equity, and get a chance to spend time both in São Paulo and in Sunnyvale, CA.
On the VC side, Latin American entrepreneurs will be pleased to learn that Kaszek Ventures has raised $135 million USD for its second fund. According to DealBook’s correspondent Vinod Sreeharsha, the amount exceeds the goal of $80 million to $100 million that MercadoLibre’s former senior executives had set during fundraising. DealBook also has interesting details about the fund’s presumed backers:
“The firm’s founding partners, Hernán Kazah and Nicolás Szekasy, declined to provide any information about their funds’ investors, citing confidentiality. But others with direct knowledge of Kaszek’s decisions but speaking on condition of anonymity, did identify some of the investors.
“According to those people, the new fund’s investors include the investment firms Horsley Bridge Partners and Sequoia Heritage, the fund of funds linked with Sequoia Capital, as well as Kevin Efrusy, the partner at Accel Partners responsible for its early investment in Facebook. All had also invested in Kaszek’s first fund.”
Considering that Kaszek’s portfolio includes names such as OpenEnglish, Netshoes, above-mentioned VivaReal and Eventioz, sold to Eventbrite in 2013, it would not be surprising to see its initial limited partners re-invest.
Brazilian education-oriented fund Gera Venture Capital also got coverage in the US press for being one of the investors in Kaltura‘s $47 million USD funding round.
Politics
As Venezuela turmoil continues, foreign tech companies have found themselves hit by the government’s latest crackdown on coverage of ongoing protests. Not only did Venezuelan users report that images were being blocked from Twitter, but a company spokesman also confirmed the information, while pointing out an SMS-based workaround:
Usuario en #Venezuela: Sigue y recibe notificaciones por SMS de cualquier cuenta en Twitter. Manda "SEGUIR [usuario]" a 89338 (@MovistarVE)
— Twitter en español (@twitter_es) February 14, 2014
Wired UK reports that Brazil and the EU have agreed to lay a fibre-optic undersea communications cable across the Atlantic, between Lisbon and Fortaleza. The project will cost $185 million USD, and reflects Dilma Rousseff’s desire to shield Brazil’s Internet (and her own communications) from US surveillance.
Mobile carrier trade group GSMA took the opportunity of Mobile World Congress in Barcelona to promote the customer protection initiative it will lead in partnership with Brazilian operators and the Brazilian Ministry of Communications. One of its goals is to fight device theft:
“Brazil has the second highest rate of handset theft in the world, with more than one million devices stolen each year. Brazilian mobile operators are now extending their current national collaboration to work with their international counterparts to further reduce opportunities to illegally export and reconnect stolen devices around the world.
“The operators will share the unique identification codes of stolen devices via the centralised GSMA IMEI database, effectively blocking their future use. This wider international partnership will ultimately reduce the rate of theft and control illegal trafficking, as stolen mobile phones will be rendered useless.”
On a final note, we are sorry to inform you that you can’t name your kid “Facebook” – that is, if you live in the Mexican state of Sonora. As a matter of fact, local authorities have taken steps to prohibit 61 given names which have two things in common: they are odd or offensive and… they have been found at least once in state registries.
Also on TNW:
- 4G data: The USA is second-slowest while Australia is fastest
- Frontback for iOS gets improved notifications, a self-timer tool, 24/7 content moderation, and more
- No longer just a clone factory, Rocket Internet has huge plans for global e-commerce
- Surprise: The most popular online dating site in the emerging world is… Facebook
Good reads from across the Web:
- An Interview With Helena Price, a Photographer Turned Brazilian Internet Meme [Bits Blog]
- Argentinos que conquistan el mundo [Cronista, in Spanish]
- Brasil e Chile têm melhores conexões da América Latina, diz Netflix [Tela Viva, in Portuguese]
- Cavallero: “Los comienzos, son siempre los momentos más felices de un emprendimiento” [Café Emprendedor, in Spanish]
- Entrepreneurship in Latin America: The Case for Peru [PulsoSocial]
- Galperín: “Llegar al Nasdaq no es una meta, es un hito” [Apertura, in Spanish]
- Hackathon for Cuba inspires communication innovation — and the winners are… [The Starting Gate]
- Investments in Brazil Rose Last Year, Study Says [DealBook]
- Latin America Sold on Cell Phones, Still Slow on Going “Smart” [PulsoSocial]
- Latinos Lead U.S. Smartphone Use [WSJ]
- Report: Building An Entrepreneurship Ecosystem in Bogota’s Tech Sector [Endeavor]
- Telegram en Latinoamérica crece a un ritmo de 70 mil usuarios nuevos al día [Alt1040, in Spanish]
- The Ten Most Popular Android Apps in Cuba [Huffington Post]
- This Is the App That’s Fueling the Uprising in Venezuela [Defense One]
- Wanted: More Startups With One Foot In The U.S. And One In Mexico [Forbes]
Image credit: Campus Party Brasil
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