Dealflow.la #34 - Lula 🇧🇷 cozying up to Putin 🇷🇺 and Xi 🇨🇳, Ecuador’s President 🇪🇨 threatens to nuke Congress, and AMLO 🇲🇽 enraged at US 🇺🇸 for spying on Sinaloa Cartel.

Latin America is rising. Subscribe to Dealflow.la to keep up.

Apr 18, 2023

Funding

Payfy 🇧🇷 raised an $800,000 Seed round led by BB Ventures 🇧🇷 to build a centralized business spending platform designed for progressive teams. The company empowers employees to make essential work-related purchases while maintaining full control over expenditures for the organization. By utilizing state-of-the-art technology and commercial cards, Payfy eliminates expense reports, minimizes administrative intricacies, and streamlines bookkeeping processes.

Kala 🇨🇴 raised a $4 Million Seed round led by Cometa 🇲🇽 with funding from Canary 🇧🇷, Clocktower Technology Ventures 🇺🇸, Acrew 🇺🇸, and 99 Startups 🇲🇽 to redefine the lending landscape in Latin America by converting traditional lenders into next-gen fintech innovators. The company’s versatile and robust fintech infrastructure serves a wide array of lending institutions, from banks and credit unions to companies offering credit programs. By delivering a seamless, fully digital credit process, Kala empowers individuals and businesses across LatAm, promoting financial inclusion.

Scalable 🇧🇷 raised $4 Million in Debt Financing from SRM Ventures 🇧🇷 to help startups scale their businesses while maintaining greater control of the operation, without having to go through unnecessary dilution. With its revenue-based financing model, the company can provide quick, flexible, and non-dilutive capital so startups can increase their runway, finance their CAC, and focus on their growth.

Z1 🇧🇷 raised a $10.8 Million Venture round co-led by Parade Ventures 🇺🇸, Kindred Ventures 🇺🇸, and Homebrew 🇺🇸 to offer digital banking services for teenagers and young adults. The company's application offers financial education, gamification, and digital banking card, enabling users to manage and spend their money responsibly and without hidden fees.

Sociopolitical News

🇦🇷 Argentina

Argentina's annual inflation rate soared to 104.3% in March, the official statistics agency said on Friday, one of the highest rates in the world, straining people's wallets and stoking a cost-of-living crisis that has pushed up poverty. The inflation reading for the month came in at 7.7%, well above analyst forecasts of 7.1%, marking the fastest monthly rise since 2002 and piling pressure on the government which is contending with angry voters ahead of elections in October. (Reuters)
Grain inspectors in Argentina held a 24-hour strike on Monday to protest high taxes that are cutting into their wages. According to Guillermo Wade, head of the country’s Chamber of Port and Maritime Activities (CAPyM), the job action by the Urgara union “is affecting absolutely all the ports” in Rosario, a hub for agricultural transportation, 300 km northwest of Buenos Aires, on the Paraná River. According to Reuters, annual inflation in Argentina is currently over 104%. The Argentine Maritime, Port and Shipbuilding Federation, another union involved in the strike action, said in a statement that “more stoppages will take place throughout the week.” Strikes have been called for Wednesday at the Buenos Aires and Dock Sud ports and Friday at the Rio Santiago shipyard. (Splash)
Thieves heisted about $1 million of gold from a mining project in southern Argentina run by Vancouver-based Patagonia Gold Corp. Thieves broke into the gold room at the company’s Cap-Oeste Project in the province of Santa Cruz in the early hours of April 17 and escaped with about 500 ounces of gold, the company’s CEO Christopher van Tienhoven said in a statement. (Bloomberg)
The number two at the US State Department, Wendy Sherman made it known during her visit to Buenos Aires, that Joe Biden's government in Washington supports "negotiations between Argentina and the IMF" and that it is necessary to "fix” the country’s macroeconomic situation. In a press conference with the local media outlets, in which the Noticias Argentinas agency participated, Sherman declared that "there is a program between Argentina and the IMF and what they are negotiating is something that the United States supports.” She added:” "I want to congratulate Argentina on the [IMF] reviews, which are going very well. And I think it's very important to fix Argentina's macroeconomic situation because it's critical for the future of the country in terms of broader reforms.” (BA Times)
Argentina announced a US$500-million investment Thursday from the Saudi Fund for Development, securing some rare international financing as the government seeks to contain an economic crisis. The state-run Saudi fund is putting money into food and energy projects in the South American nation, including the Néstor Kirchner gas pipeline that’s expected to be finished this year, according to an Argentine Economy Ministry statement, which didn’t detail exactly when the funds would arrive. Economy Minister Sergio Massa met with the fund’s CEO, Sultan Abdulrahman Al-Marshad, in Washington Thursday on the sidelines of the International Monetary Fund’s spring meetings. The outlay comes just two weeks after President Alberto Fernández told US President Joe Biden in Washington that he’s seeking to secure a “bridge” of financing to offset losses from a severe drought. (BA Times)

🇧🇴 Bolivia

Sofia Andrade, a lawyer, chose over the past month to withdraw all her dollar savings from the bank as the US currency became scarce on the streets of Bolivia. “I prefer to have them at home,” she said. “I fear they won’t let me withdraw them later.” Like her, many Bolivians are withdrawing their dollar deposits or rushing to buy the US currency amid increased concern about Bolivia’s economic fragility, a marked change for a country that for more than a decade experienced what many called an “economic miracle” amid strong growth, record exports, low inflation, a fixed exchange rate, and subsidized gasoline. The scarcity of the greenback, which opposition politicians attribute to the Central Bank running out of hard currency reserves and the government blames on speculation, means that for the first time since 2011, a parallel market for the U.S. dollar has emerged that charges slightly more than the official price. (AP)
Bolivia's government has called on the armed forces to tighten border controls to curb the smuggling of state-subsidized fuels, a move it believes will save state coffers some $250 million per year. Keeping fuel prices steady, currently 3.74 bolivianos ($0.5452) per liter for gasoline and 3.72 bolivianos per liter for diesel, cost Bolivia $1.7 billion last year alone, according to data from state oil firm YPFB. The proliferation of subsidized fuel on the black market and its use in illegal mining and drug trafficking, "is bleeding Bolivia's economy," the nation's hydrocarbons minister Franklin Molina said at a news conference on Thursday. "We all pay for the subsidy," he said. The government is calling on the armed forces, police, customs, and YPFB personnel to beef up oversight, a move aimed at averting fuel shortages in the upcoming farming season in Santa Cruz region, the Andean nation's largest food producer. (Reuters/US News)

🇧🇷 Brazil

‘Anxious and frustrated’ Lula takes a swerve to the left in Brazil. Luiz Inácio Lula da Silva is in a hurry. Since he took office for a historic third term just over 100 days ago, the Brazilian leader has been desperate to stamp his mark on the presidency and undo the rightward shift that Latin America’s largest country took under his predecessor Jair Bolsonaro. In his four-year term, Brazil will make 40 years of progress, says Lula, who has pledged to eradicate hunger, kick-start the economy, and give Brazilians a reason for optimism after years of stagnation. But there have been few early signs of such a transformation. Beyond a push to reassert Brazil’s role on the international stage — with presidential visits to the US, China, and South American neighbors — the opening months of the new government have been marked by stuttering domestic progress and increasingly vicious spats between Lula’s leftwing Workers’ party and the country’s top economic policymakers. After the January 8 riot by Bolsonaro supporters in Brasília all but overshadowed his first month in office, the 77-year-old Lula appears increasingly impatient — even irritable — with his critics. And he has largely discarded the “big tent” coalition that propelled him to election victory in October. (FT)
Brazil's federal police said on Tuesday they were carrying out new raids as part of an investigation into the Jan. 8 riots in Brasilia, in which supporters of former President Jair Bolsonaro stormed government buildings. They were serving 16 preventive arrest warrants and 22 search and seizure warrants ordered by the Supreme Court in seven states and the federal district, where Brasilia is located, a statement said. "Investigations continue so that the law is fully observed," Justice Minister Flavio Dino wrote on Twitter after the federal police announcement. "This is the only way we will secure peace and democracy." The raids represent the tenth phase of an operation launched in mid-January to identify people who participated in, funded, or fostered the riots, in which a crowd protesting President Luiz Inacio Lula da Silva's election victory invaded and ransacked the Congress, presidential palace, and Supreme Court. (Reuters/US News)
Brazilian President Luiz Inacio Lula da Silva on Tuesday condemned the violation of Ukraine's territorial integrity by Russia and again called for mediation to end the war, a peace initiative that was criticized by the Ukrainian government. Speaking at a lunch with Romanian President Klaus Iohannis, Lula said a group of neutral nations must come together to help broker peace between Russia and Ukraine. His comments came after he set off a storm among Western allies by stating over the weekend that they were prolonging the fighting by supplying arms to Ukraine. A White House spokesman accused Lula of "parroting Russian and Chinese propaganda without looking at the facts." And on Tuesday, the White House said Lula's "tone was not one of neutrality." (Reuters/Yahoo News)
Chinese leader Xi Jinping met with visiting Brazilian President Luiz Inácio Lula da Silva on Friday as part of a push to boost ties between two of the world’s largest developing nations. The meeting came on the second day of Lula’s visit to China, his country’s most important trading partner and key ally in his bid to challenge Western-dominated economic institutions. Lula was greeted with full military honors, including a 21-gun salute, at the Great Hall of the People adjacent to Tiananmen Square in the heart of the Chinese capital. Their talks focused largely on trade ties and other forms of cooperation, but also touched on the conflict in Ukraine, with the leaders agreeing on the need for a negotiated settlement, according to Chinese state broadcaster CCTV. (NBC)
Russia’s Foreign Minister Sergey Lavrov on Monday expressed gratitude to Brazil for its approach in pushing for an end to hostilities in Ukraine — an effort that has irked both Kyiv and the West, and by afternoon prompted an unusually sharp rebuke from the White House. Brazil’s President Luiz Inácio Lula da Silva has refused to provide weapons to Ukraine while proposing a club of nations including Brazil and China to mediate peace. (Politico)

🇨🇱 Chile

Chile has hands new powers to police to use force against criminal suspects as security deteriorates, but this hasty response to a wave of deadly attacks on security forces is unlikely to tackle the roots of the country's security problems. Several officers from Chile's national police force, the Carabineros, have been killed or injured in recent weeks. In the latest incident, three officers were shot on April 12 during a security operation in La Florida, southeast of the capital, Santiago. Before this, three others were killed in separate incidents in 23 days, culminating with the death of Daniel Palma, who was murdered during a traffic stop in central Santiago on April 5. (InsightCrime)
Chile approved a $3 billion-plus investment in a copper mine owned by Anglo American Plc despite environmental concerns, a sign of the government’s commitment to boosting the production of a key raw material in the clean-energy transition. Government ministers voted unanimously to allow Anglo to add underground operations at its Los Bronces mine, overturning a decision by environmental regulators last year. The approval came with conditions regarding water monitoring and emission controls, the Environment Ministry said in a statement. (Bloomberg)

🇨🇴 Colombia

Colombia has joined the long list of countries offering digital nomad visas. (CNBC)
An armed faction of Colombia’s disbanded FARC rebels has said they are ready to engage in peace talks with the government next month in what could mark a turning point for leftist President Gustavo Petro’s quest for “total peace”. (Al Jazeera)
Addressing the U.N. Security Council for the first time, a former Colombian rebel leader who now heads a political party urged the country’s remaining armed groups Thursday to recognize left-wing President Gustavo Petro’s government as “democratic and progressive” and stop fighting against it.
Rodrigo Londoño accused Petro’s right-wing predecessor, Ivan Duque, of failing to implement the 2016 peace agreement with his rebel group, the leftist Revolutionary Armed Forces of Colombia known as the FARC. That accord was aimed at ending more than 50 years of war in Colombia that caused over 220,000 deaths and displaced nearly 6 million people. (ABC)
President Joe Biden is hosting Colombian President Gustavo Petro at the White House for talks next week, offering a high-profile visit to the leftist leader who has vowed to bring “total peace” to his nation of 50 million after six-decades of conflict. (ABC)
Colombian President Gustavo Petro on Wednesday removed the national police director who had talked about using exorcisms to catch fugitives.
Neither Petro nor the Defense Ministry elaborated on reasons for the dismissal of Gen. Henry Sanabria, a staunch Catholic who was appointed by Petro in August of last year. Sanabria was under an internal investigation by the ministry over whether he had inappropriately allowed his religious beliefs to infringe on his duties. (AP)

🇪🇨 Ecuador

Ecuador’s president Guillermo Lasso has vowed to dissolve Congress and call early elections rather than allow legislators to impeach him on what he says is a false corruption allegation promoted by political opponents. Lasso, one of Latin America’s few remaining investor-friendly presidents, has fought off repeated attempts by the leftwing-dominated congress to remove him, as once-tranquil Ecuador is overwhelmed by a tide of drug-related killings. (FT)
At least 12 inmates were killed in an Ecuadorian jail amid a new clash between gangs, the SNAI prison agency said on Saturday, in the latest chapter in the South American nation's prison violence. The confrontation occurred on Friday in the prison known as La Penitenciaría, in the city of Guayaquil, one of the country's most dangerous. Ecuador has been plagued by prison riots since 2021, resulting in the deaths of hundreds of inmates, which the government attributes to clashes between drug gangs fighting for territory and control. (Reuters)
Ecuador is in talks with the International Monetary Fund for a credit line of as much as $1 billion after the nation was hit by an earthquake, flooding and a landslide in recent weeks. The government has its financing needs covered for the year, but is seeking additional support to fund disaster relief after the series of natural calamities, Finance Minister Pablo Arosemena said Wednesday, in an interview in Washington D.C. (Bloomberg)

🇸🇻 El Salvador

El Salvador’s bonds are on a roll as investors cheer on signs that President Nayib Bukele’s government is trying to shore up finances. The Central American nation’s overseas notes are the best-performing in emerging markets Tuesday, with the price of $348 million of bonds due in 2025 surging to the highest since September 2021. Yields on the notes dropped to 18%, compared to a peak of more than 70% last July. (Bloomberg)
El Salvador has tapped a former International Monetary Fund official as an adviser as it seeks a deal with the multilateral lender, according to people familiar with the matter. Alejandro Werner, who retired as head of the Western Hemisphere Department at the IMF in 2021, has been working with the Central American nation’s government this year, according to the people, who asked not to be identified because the matter is private. (Bloomberg)

🇲🇽 Mexico

Mexico's president lashed out Monday at what he called U.S. "spying" and "interference" in Mexico, days after U.S. prosecutors announced charges against 28 members of the Sinaloa cartel for smuggling massive amounts of fentanyl into the United States. The three sons of former drug lord Joaquín "El Chapo" Guzmán — known as the "Chapitos" — were among those charged. President Andrés Manuel López Obrador suggested Monday that the case had been built on information gathered by U.S. agents in Mexico, and said "foreign agents cannot be in Mexico." He called the Sinaloa investigation "abusive, arrogant interference that should not be accepted under any circumstances." A former top U.S. drug enforcement agent called the president's comments unjustified. Mike Vigil, former head of international operations for the Drug Enforcement Administration, said López Obrador was mistakenly assuming that U.S. agents needed to be in Mexico to collect intelligence for the case. In fact, much of the case appears to have come from trafficking suspects caught in the U.S. "He wants to completely destroy the working relationship that has taken decades to build," Vigil said. "This is going to translate into more drugs reaching the United States and more violence and corruption in Mexico." (CBS)
The Biden administration announced Friday that it is increasing cooperation with Mexico to combat the trafficking of fentanyl coming north into the U.S. while also cracking down on the trafficking of guns going south into Mexico. (NBC)
He’s been the face of Mexico internationally for nearly five years and often the country’s leading voice in negotiations with top world leaders — including volatile ones, like former U.S. President Donald Trump.
Now Foreign Affairs Minister Marcelo Ebrard is testing whether his work on the world stage will translate into votes in Mexico as he competes for the leftist ruling party nomination for next year’s presidential elections.
The 63-year-old is in the thick of a three-way race with other members of President Andrés Manuel López Obrador’s inner circle, including Mexico City Mayor Claudia Sheinbaum and Interior Minister Adán Augusto López. (ABC)
Press freedom groups said Tuesday the Mexican government apparently continued to use Pegasus spyware to infect telephones of human rights activists as recently as late 2022, despite a pledge by President Andrés Manuel López Obrador to stop such spying. The activists targeted by the spyware work for the Miguel Agustín Pro Juárez human rights center. The center has been spied on in the past, and has worked to expose abuses by the government, including the Mexican Army. (ABC)

🇳🇮 Nicaragua

‘Rights crisis’: Amnesty report documents abuses in Nicaragua. The human rights organisation Amnesty International has warned that the government of Nicaraguan President Daniel Ortega and Vice President Rosario Murillo is deepening repression in the Central American state. In a report released on Tuesday, the organisation stated that the government has engaged in abuses such as arbitrary detention, torture, and stripping dissidents of citizenship. (Al Jazeera)

🇵🇦 Panama

The United States, Panama, and Colombia will launch a 60-day campaign aimed at halting illegal migration through the treacherous Darien Gap, where the flow of migrants has multiplied this year. Details on how the governments will try to curb the flow of migrants that reached nearly 90,000 in just the first three months of this year through the dense, lawless jungle were not provided in the joint statement. (ABC)

🇵🇾 Paraguay

"A new Panama Canal": that is how Egon Neufeld describes the Bioceanic Highway, a massive transnational infrastructure project which aims to link Chile's Pacific coast with Brazil's Atlantic coastline. A wealthy landowner in Paraguay, Dr Neufeld says the road - which will span more than 2,200km and run through Argentina, Brazil, Chile and Paraguay - will make it easier for ranchers like him to transport cattle and soybean to port cities on both the Atlantic and the Pacific, from where it can easily be shipped to overseas markets. The governments of the countries the road will run through have all lent their support to the project, with Mario Abdo, the president of landlocked Paraguay, a particularly ardent supporter. (BBC)

🇵🇪 Peru

The government of Peru has made the decision to prolong the period of the state of emergency in the northeast border region, a move that is aimed at intensifying the efforts to combat the illicit trade of narcotics. According to a released decree, the Peruvian government has declared a 60-day extension of the state of emergency in two provinces situated in the department of Loreto. This decision has been made as a part of the nation's persistent battle against drug trafficking in the northeastern border region. (TeleSUR)

🇻🇪 Venezuela

On Tuesday morning, Russian Foreign Affairs Minister Sergei Lavrov arrived in Caracas for a dialogue with Venezuelan President Nicolas Maduro and for high-level meetings with officials from Venezuela’s Government. This visit is part of a Latin American tour in which the Russian diplomat visited Brazil in the previous days and will travel to Nicaragua and Cuba after staying in Venezuelan territory. (TeleSUR)
Venezuelan President Nicolas Maduro on Monday launched his own television show on a public channel, a year before the next presidential elections are due. "We are starting a new stage of communications," the Socialist leader said, wearing a jacket and shirt with no tie as he introduced the new show called "With Maduro." The Venezuelan opposition frequently criticizes the government's use of public media, complaining that it has very little access in the face of an omnipresent Maduro. Maduro is following in the footsteps of his populist predecessor and mentor, the late Hugo Chavez, who was president from 1999 to 2013. He hosted a Sunday program called "Alo, presidente," a show with no fixed running time and could sometimes last for hours. (France24)

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