The $100M+ Dollar Club of South American Startups

From the Andes mountain range in the north to the plateaus of Patagonia in the south, the South American continent roughly covers one-eighth of the land surface of our planet, making it the fourth-largest continent. The continent is relatively rich in minerals, but countries such as Uruguay and Paraguay are almost devoid of mineral wealth. South American countries have traditionally relied on a foundation of agriculture, fishing and forestry, mining and non-exportable manufactures. Bounded by the Pacific Ocean in the west and the Atlantic Ocean in the east, the continent is home to some of the largest economies in the world, such as Brazil (USD 1.4 trillion), Argentina (USD 388 billion) and Colombia (USD 271 billion). From startups that design satellites capable of remapping the entire planet to those that offer plant-based food alternatives, South America has an exciting startup ecosystem worth exploring.

Analysis

The analysis is based on data from Crunchbase, and overall, 37 startups have been analysed. Startups considered for this analysis are unlisted non-government entities that have raised more than $100 million (USD) of capital to date. The estimated revenue range was available for 31 startups. 

The startups have been classified according to various industries based on data from Pitchbook, and the sector classification is based on Global Industry Classification Standard (GICS). The sector classification is subjective and has been made considering the sector/industry that the startups closely resemble.

More than half of the startups have an estimated revenue range of less than $50 million (USD), with Wildlife Studios being an outlier with an estimated revenue range of more than $10 billion (USD). Founded in 2011, the Brazil-based startup develops mobile games across different genres such as arcade and battle royales. The startup, which has raised $180 million (USD) to date, is backed by the likes of Benchmark, Bessemer Venture Partners and Vulcan Capital. 

The financials sector tops the list in terms of funding (29%) and the number of startups (24%). Of the $3.67 billion (USD) raised by startups in this sector, 73% has flowed towards other financial services and financial software. Founded in 2013, Nubank provides no-fee digital credit cards that can be managed through its mobile application. The card can be used for various activities ranging from bill payments and money transfers to earning loyalty rewards and availing personal loans. It has raised a staggering $1.5 billion (USD) to date and had its latest funding round in January this year, where it raised $400 million (USD) in Series G funding from investors such as Sequoia Capital, GIC, Tencent, and Invesco.

 Creditas is a consumer finance startup that offers financing, lending and investment services at lower interest rates. The startup has raised close to $569 million (USD) across eight funding rounds, with the latest one in December 2020. Uruguay-based DLocal, which is gearing up for an IPO before the end of the year is a digital payments startup that provides payment processing services throughout Latin America. The startup has raised $357 million (USD) to date across four funding rounds. It is backed by investors such as General Atlantic and Tiger Global Management.  

The consumer discretionary sector is the second-largest in terms of funding (21%) and is tied for third place (16%) along with the communication services sector in terms of the number of startups. Other services (B2C non-financial) and specialty retail are the two prominent industries that have together attracted 77% of the funds flowing to this sector.  The Colombia-based startup- Rappi is an on-demand delivery platform that connects consumers with local stores. Rappi enables customers to order anything from groceries to drugstore medications and delivers it within minutes. The startup has raised $1.7 billion (USD) and is backed by investors such as Softbank Vision Fund, Y Combinator, DST Global and Sequoia Capital. MadeiraMadeira is an online retail platform that offers home furnishing products. From bathtubs to lighting products, the platform is a one-stop-shop for all home decor products. The startup has raised close to $339 million (USD), and its latest round was in Jan 2021, where it raised $190 million (USD) in series E funding. 

Startups in the industrials sector have raised close to $2 billion (USD), with 88% of it flowing towards logistics and environmental services (B2B). Founded in 2013, Loggi is an online shipping logistics platform that connects couriers to shippers. The startup has raised $507 million (USD) to date and is backed by Microsoft, GGV Capital, SoftBank and Monashees, among others. With the aim of democratizing access to space-based services, Satellogic manufactures, designs and operates earth observation satellites that are capable of remapping the entire planet at both high-frequency and high resolution. The startup’s satellite constellations democratize access to geospatial data offering clients planetary-scale insights. The startup has raised close to $124 million (USD) from investors such as Tencent, Tuesday Capital, Endeavor Catalyst and Valor Capital Group. 

Startups in the consumer staples sector have raised $215 million (USD), with food products and other agriculture being the two prominent industries. Founded in 2015, NotCo offers plant-based food products that reinvent animal-based food using only plants. It uses artificial intelligence to determine which plants must be combined in order to replicate their taste, texture etc., enabling manufacturers to discover an entirely new source of fibre. The startup has raised $115 million (USD) in four funding rounds and is backed by the likes of General Catalyst, Endeavor Catalyst, and Kaszek. 

Conclusion

Overall, South American startups have raised $12.49 billion (USD), with funding (69%) and the number of startups (76%) heavily skewed towards Brazil. Among the latest funding rounds, debt financing was by far the most popular, followed by private equity and series E. Given that a majority of the startups were founded in the past decade and the fact that the region has attracted investments from some of the biggest names in venture capital such as Softbank, Sequoia Capital, Y Combinator, DST Global, General Atlantic and Tiger Global Management, is indicative of the increased level of confidence placed in the region.  

For more extensive analysis and Market Intelligence reports feel free to approach us or visit our website: Venture Capital Market Intelligence Reports | VCBay.

We try our best to fact check and bring the best, well-researched and non-plagiarized content to you. Please let us know

-if there are any discrepancies in any of our published stories,

-how we can improve,

-what stories you would like us to cover and what information you are looking for, in the comments section below or through our contact form! We look forward to your feedback and thank you for stopping by!

Next Article