Welcome to the latest edition of LatAm Tech Weekly! In this week’s update, we have some exciting news and insights to share with you about the ever-evolving financial markets. So grab a cup of coffee and let’s dive in!

Global M&A Volume Expected to Experience Moderate Upside in Q4 2023

According to a recent study by Intralinks, global announced M&A volume is projected to see a moderate upside in the fourth quarter of 2023. While the growth is expected to be marginal compared to the previous quarter, this indicates positive momentum in the market. It will be interesting to see how these trends unfold in the coming months and what impact they will have on the financial landscape.

Insights from The Techno-Optimist Manifesto

We also wanted to highlight an insightful piece by Marc Andreessen, co-founder at a16z, titled The Techno-Optimist Manifesto. In this thought-provoking manifesto, Andreessen shares his belief that technology is a powerful tool for progress and brings out the best of human ambition and achievement. It’s definitely a must-read for anyone interested in the intersection of technology and finance.

VC Exits and IPO Market Performance in Q3 2023

Q3 2023 witnessed a notable upswing in VC exit value, primarily driven by high-profile IPOs. With $35.8 billion in liquidity achieved during the quarter, it marked the strongest performance since Q4 2021. However, despite this positive trend, 2023 is projected to be the second-worst year for exits in the past decade, according to the PitchBook-NVCA Venture Monitor. This indicates that there are still challenges and uncertainties in the market that need to be monitored closely.

While Klaviyo and Instacart’s IPOs contributed to the overall exit values, their reception on Wall Street was moderate. It’s important to note that IPOs have traditionally been a significant source of liquidity for VC-backed companies, and their performance can have a substantial impact on the overall market sentiment. It will be interesting to see how these IPOs evolve in the coming months and what lessons can be learned from their journey.

Some U.S. VCs are advising their late-stage companies to delay IPOs until interest rates stabilize and public markets assign higher valuation multiples to growth stocks. This approach reflects a cautious stance in assessing the market dynamics and waiting for optimal conditions to ensure a successful IPO. As always, time will tell how these recommendations play out in the market.

Latin American VC Markets and Funding Trends

Looking at the bright side, there are encouraging signs in certain VC markets, particularly in Europe and Latin America. In the third quarter of 2023, Latin American startups secured $2.5 billion in funding, with $1.5 billion coming from equity funding. Despite overall funding, including non-equity capital, decreasing by 26% for the year, equity-based fundraising increased by 13% compared to the previous year. This indicates the resilience and potential of the Latin American startup ecosystem.

Q3 2023 was Brazil’s best quarter, with a notable increase in capital raised. Brazilian startups raised $596.7 million in Q3, compared to $385.9 million in Q2 and $395.3 million in Q1. These positive funding trends suggest a more sustainable and promising path for Brazilian startups.

Key Highlights from the Week

Monday

General News:

• VC funds are on track to raise 67% less than they did last year.
• The Brazilian Central Bank confirms that the Pix billing method will remain “100% free” for individuals.
• Belvo aims to connect 5 million accounts via Open Finance in Brazil.
• EpHealth, a Brazilian healthtech, enters acceleration programs in the UK and Switzerland after its successful journey in monitoring the work of SUS healthcare agents.
• Mercado Livre tests artificial intelligence to measure diversity in ads using the VidMob Diversity and Inclusion Score tool.
• Locaweb’s CEO joins the Board of Directors of HR Tech company LG (Lugar de Gente).

Tuesday

General News:

• Fitch awards an A+ (BRA) rating to the Brazilian fintech QI tech, recognizing its robust growth, liquidity, high margins, and diversified revenue streams.
• There are 121 new startups in the Chilean fintech market, with an annual growth rate of 29.5% since 2019.
• Investments in Fintech companies in Argentina grow by 183%.
• PitchBook ranks New York, Shanghai, London, and Berlin as the “most balanced” cities for venture capital, while São Paulo ranks 18th in terms of VC activity growth.
• Brazil secures the ninth position globally in the adoption of digital assets, according to a report by blockchain platform Chainalysis.

Wednesday

General News:

• Itaú strengthens its presence in Peru, expanding its reach in the Latin American market.
• XP Investimentos announces the end of XTage, its cryptocurrency broker.
• Uruguay, Chile, and Argentina rank as the top three countries with the “best digital quality of life” in Latin America, according to the annual Shark study.
• Chilean startup Zerviz begins operations in the United States.

Thursday

General News:

• Itaú, Liqi, and Oliveira Trust execute a Token of Investment in Receivables Rights (TIDC) worth R$20 million, representing an innovative approach in the digital assets space.
• Belvo and Mibanco form an alliance to expand access to credit through secure data sharing.
• Itaú Uruguay integrates a payment app into its digital ecosystem using low-code technology.
• Magalu, the financial arm of Magazine Luiza, offers cryptocurrency trading through a partnership with Mercado Bitcoin.
• Never Forget Games, a studio by Wildlife Studios, announces the launch of its first game, Midas Merge.
• Venture capital investor Valor Capital Group hires Bruno Batavia, former Brazilian central bank official, as its new director of emerging tech.
• The Chinese company Shein strengthens its presence in Brazil with plans to reach 2,000 supply agreements with local third-party factories.
• Nubank applies for a banking license in Mexico, aiming to expand its services beyond cards and offer investment and loan services.

Friday

General News:

• The Compre & Alugue Agora (CAA) platform, the first social network in the real estate market, celebrates its achievements with a Halloween party for brokers.
• Miranda Partners and AMG Block Ventures launch a venture capital fund for Mexican startups, marking an exciting moment for Mexico’s startup ecosystem.
• KKR closes its Next Generation Technology Growth Fund III on $3 billion, signifying confidence in the future of technology and innovation.

These are just a few highlights from the week. Be sure to stay tuned for more updates coming your way!

Insights from Readers: The Top 25 Early-Stage LatAm VCs

We received valuable feedback from one of our readers about The top 25 early-stage LatAm VCs report by CB Insights. This report highlights the increasing interest in and support for early-stage startups in Latin America. It’s great to see VCs recognizing the potential in the region and actively investing in its growth.

What We’re Reading and Listening To

As for our own reading and listening recommendations, here are a few suggestions:

• Take some time to read The Techno-Optimist Manifesto by Marc Andreessen for thought-provoking insights into the impact of technology on human progress.

Final Thoughts

As Satya Nadella, CEO of Microsoft, once said, “As we pursue our opportunity, we are also working to ensure technology helps us solve problems—not create new ones.” This quote perfectly captures the importance of harnessing technology to drive positive change and address the challenges we face.

That wraps up this week’s edition of LatAm Tech Weekly. Stay tuned for more updates, and remember to follow me on LinkedIn, Instagram, or Twitter for daily tech news and insights!

The views and opinions expressed herein are solely those of the author and do not necessarily reflect those of Nasdaq, Inc.