Dealflow.la #40 - NuBank 🇧🇷 to invest $159 Million in Colombia 🇨🇴 amid record profits, dLocal 🇺🇾 fraud allegations send stock into freefall, and Stori 🇲🇽 raises $50 Million in debt financing.

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

Jun 01, 2023

Funding

Trébol 🇨🇴 raised a $3 Million Seed round led by Canaan Partners 🇺🇸 and Better Tomorrow Ventures 🇺🇸 with funding from Y Combinator 🇺🇸, Soma Capital 🇺🇸, and Unpopular Ventures 🇺🇸 to build an application programming platform interface intended to help businesses, neo banks, and lenders to underwrite their clients faster. The company's software authorizes workflows and secure connections with multiple finance platforms like payment, commerce, tax, and accounting, standardizes the data, and distributes it through a universal application programming interface (API), increases conversion rates, and operates products in structured data, enabling businesses to operate faster and cost-efficiently in Latin America.

Huli 🇨🇷 raised a $5.5 Million Seed round led by Intoku Health 🇳🇿 with funding from Carao Ventures 🇨🇷 to simplify the process of managing patients and their records. The company's platform integrates an online calendar with automatic reminders, collects and communicates patients' information, as well as contacts and medical insurance. It also facilitates patients' appointment schedules and other healthcare services, enabling doctors to increase patient volume and customer satisfaction while letting patients find medical services characterized by transparency and good prices.

Kapital 🇲🇽 raised a $20 Million Series A led by Tribe Capital 🇺🇸 and Niya Partners 🇺🇸 with funding from Dropbox co-founder Arash Ferdowsi 🇺🇸, Marbruck 🇦🇺, Broom Ventures 🇺🇸, FoundersX 🇺🇸, Pioneer Fund 🇺🇸, and Kube VC 🇸🇬 to develop a banking platform designed to gain visibility and control of the treasury. The company's platform offers a business banking technology that manages income and expenses through multi-treasury, financially inclusive products for employees, and credit cards, enabling businesses to accelerate growth with a suite of options.

Stori 🇲🇽 raised $50 Million in Debt Financing from Community Investment Management 🇺🇸 to fund their digital financial payment services intended to help users with credit facilities and other financial services via a credit card. The company's services allow accessing consumer financial products such as prepaid and credit cards that are denied to them by traditional banks, enabling customers to easily get access to credit digitally via a card and an embedded platform.

Digibee 🇧🇷 raised a $61.5 Million Series B led by Goldman Sachs Asset Management 🇺🇸 with funding from Vivio Ventures 🇧🇷, Kinea Investimentos 🇧🇷, K Fund 🇪🇸, and G2D Investments 🇧🇷 to build a hybrid integration platform designed to connect businesses to the digital world. The company's platform features faster integrations, automation of operations, digital transformation, modern architecture, connecting with the ecosystem, and real omnichannel, enabling businesses to turn ideas into meaningful customer digital experiences efficiently.

Sociopolitical News

🇦🇷 Argentina

He believes selling human organs should be legal, climate change is a “socialist lie,” sex education is a ploy to destroy the family, and that the Central Bank should be abolished. He also could be Argentina’s next president. Javier Milei, an admirer of former U.S. President Donald Trump, is the latest example of how right-wing populists are making inroads in Latin America, appealing to a citizenry angry with politics as usual and eager for outsiders to shake up the system. A libertarian economist and self-described “anarcho capitalist,” Milei made a name for himself by shouting against the “political caste” on television. His presidential candidacy looked like a sideshow until recently. Polls show his popularity rising, and his proposals dominate discussions ahead of October elections. “Today no one can say that Milei isn’t someone who could get to the presidency,” said Luis Tonelli, a political scientist at University of Buenos Aires. (AP)
Uruguayan fintech dLocal, the South American country's first unicorn, saw its shares plummet on Friday, after Argentine news outlet Infobae published an article saying the government was investigating it for a possible fraud of at least $400 million. Citing unnamed official sources, Infobae said the Argentina government was investigating the fintech for "improper maneuvers" and transfers abroad that would constitute a fraud, with most of its income coming from services sold to subsidiaries of the same firm. (Reuters)

🇧🇴 Bolivia

Mystery surrounds death of bankrupt bank trustee who fell from 15th floor of building in Bolivia. A prosecutor in Bolivia launched an investigation Monday into the mysterious death of the trustee of a bankrupt bank who fell from the 15th floor of a building and his family disputed claims he took his own life. Several of Bolivia's top leaders have demanded an impartial investigation into the death of Carlos Alberto Colodro, 63, who was appointed as trustee of Fassil Bank last month after the government took control of it amid its insolvency and a run on deposits. Colodro, who was tasked with liquidating the bank, was found dead on Saturday, apparently from a fall from a building in the eastern city of Santa Cruz. (CBS)

🇧🇷 Brazil

Brazilian President Luiz Inácio Lula da Silva proposed creating a common currency in the region during a meeting with South American heads of state in Brasilia on Tuesday. The single currency would apply to the Mercosur trade bloc, comprised of Argentina, Brazil, Paraguay, and Uruguay, in Lula’s vision. Talk of creating a common currency there has periodically cropped up since its founding in 1991. In his opening address, Lula proposed to “strengthen the South American identity in monetary policy, through better compensation mechanisms and the creation of a shared unit of transaction for trading,” rather than relying on extra-regional currencies. Lula also argued that regional development banks like the Andean Development Corporation (CAF), the Bank of the South and Brazil’s development bank BNDES should do more to finance social and economic development in the region. (CNN)
Lawmakers in Brazil approved a proposal that opponents argue will gut Indigenous land rights and environmental protection. The fast-track approval highlights the strength of Brazil's powerful agriculture industry. Indigenous leaders vow more protests. The law sailed through Brazil's lower house of Congress late Tuesday and is expected to pass the Senate. Among its provisions, it will limit the creation of new Indigenous reserves to lands that were only occupied by native people in 1988. That's the promulgation date of Brazil's latest constitution. Indigenous leaders blocked a major highway in protest of the proposed legislation. Many held signs saying "we existed before 1988." They clashed with police, using bows and arrows at security forces, who dispersed the crowd with water cannons and tear gas. (NPR)
President Luiz Inacio Lula da Silva’s economic team considers that Argentina, battered by spiraling inflation and a severe drought, will soon need some sort of additional financial support, according to a Brazilian government official familiar with the discussion. The official, who requested anonymity to reveal internal discussions, described Argentina as a regional partner that’s too big to collapse, but not relevant enough on the global stage to convince the International Monetary Fund or even China to mobilize the additional resources the country urgently needs. (Bloomberg)
Luiz Inacio Lula da Silva started his third presidential term telling the international community that “Brazil was back” on the global stage.
But the leftist leader’s latest international forays have upset many allies and left most wondering what exactly he’s trying to accomplish. The latest example came during Lula’s emphatic defense of Venezuela’s Nicolas Maduro on the eve of a summit of South American leaders that Brazil organized to assert its regional clout. Maduro and his predecessor Hugo Chavez, the Brazilian president said, have been falsely described as anti-democratic and authoritarian by enemies seeking to destroy them. (Bloomberg)

🇨🇱 Chile

Scott Lieberman, an American who lives in San Francisco, always knew that he was adopted from Chile. What he did not know was that he had been stolen as an infant. “I lived 42 years of my life without knowing that I was stolen, not knowing what was happening down in Chile during the 70s and 80s and I just, I want people to know… There are families out there that can still be reunited,” Lieberman said. During the dictatorship of General Augusto Pinochet (1973-90), many babies were funneled to adoption agencies. Some of the children came from rich families, taken or given up to protect reputations. Other babies from poorer backgrounds were simply stolen – as it appears was the case with Lieberman. In the last decade, CNN has documented multiple cases of Chilean babies who were stolen at birth. Authorities in the country say priests, nuns, doctors, nurses and others conspired to carry out illegal adoptions, with the main motive being profit. Chilean officials say the number of stolen babies could be in the thousands, but the country’s investigation into the controversial adoptions has languished over the years. Some who took part in the illegal adoptions have died. Many clinics or hospitals where the babies were allegedly stolen no longer exist. (CNN)

🇨🇴 Colombia

‘Hope never dies’: Venezuelan migrants disappear in Colombia. Human rights groups say the state is not doing enough to find hundreds of Venezuelans who have gone missing in Colombia. (Al Jazeera)
It took Jaime Gilinski 561 days, and eight tries, but in the end he got his wish: wresting control of a century-old food conglomerate from Colombia’s most powerful business group. And if the process of wearing down the tight-knit group of Medellin-based families was fitful and tortured, it was also immensely rewarding for Gilinski and his partners in Abu Dhabi. In taking control of foodmaker Grupo Nutresa SA, they’ve scored a profit of nearly 100% on the $2.7 billion they invested, capping off a coup that has upended the sleepy business community here and converted Gilinski — in the eyes of many — into a corporate raider villain in the mode of Carl Icahn. (Bloomberg)
The current Colombia head of coal miner Drummond Co Inc and his predecessor will be tried for allegedly funding right-wing paramilitaries, the country's attorney general's office said in a statement on Wednesday.
There is "abundant proof" that current head Jose Miguel Linares, who took up his post in 2013 after serving as vice-president of legal, and Augusto Jimenez, who headed the company's operations in Colombia between 1990 and the end of 2012, conspired to finance a paramilitary group, the prosecutor said. "Linares Martinez and Jimenez Mejia, between 1996 and 2001, increased the value of a food provision contract with a provider company to obtain additional resources and use them to cover previously-agreed illegal obligations with the Juan Andres Alvarez front of the North Block of the United Self-Defense Forces of Colombia (AUC)," the statement said.
The effort was a bid to protect assets and ensure the free operation of the U.S.-based company's mine in Cesar province, the statement added. (Reuters/ Yahoo)
Brazilian digital bank Nubank, Latin America's biggest fintech company, will invest up to a further 700 billion pesos ($159 million) in its Colombian operations by 2025, its financial director for Colombia said on Wednesday.
The additional sum, from the bank's own resources, will raise its investments in its third-largest market behind Brazil and Mexico to 2 trillion pesos.
"We're going through the investment curve that any company has, where first there is a cash flow, then there are large investments (...) with their own capital, then there are shareholders," Colombia Director Felipe Castellanos told reporters in Bogota. Nubank has 635,000 credit card customers in Colombia, equivalent to a 3.6 percent market share. It has some 80 million clients in Brazil, Mexico, and Colombia. Nubank reported a net profit of $142 million in the first quarter, swinging from a year-earlier loss of $45.1 million as its customer base grew. (CNA)
Colombia's Cano Limon-Covenas pipeline was bombed by unknown actors, operator Cenit said in a statement on Tuesday, prolonging the suspension of pumping crude between oil fields in the country's northeast and the Caribbean coast, where the oil is exported. The attack occurred in a rural part of the Saravena municipality, located in Arauca province, and Cenit, a subsidiary of majority-state-owned oil company Ecopetrol, implemented an emergency containment plan. Colombia's military is working to secure the area, Cenit added. Cenit did not attribute the attack to any particular group. According to the military, guerrillas of the National Liberation Army (ELN) and FARC dissidents who reject a 2016 peace deal with the government operate in the area. Pumping along the pipeline has been suspended since April 14 due to other attacks. Restarting operations will depend on the military's ability to secure the area where the attacks took place while repairs continue. (Reuters/US News)
China’s Zijin Mining Group is asking the Colombian government to retake control of the territory surrounding its Buritica gold mine after the operation suffered a new attack. One worker was shot Monday, and on Tuesday vehicles were incinerated, prompting an evacuation of the gold mine in Antioquia province, the company said. That comes after two contract workers were killed and 14 other people were injured, including 4 members of the police, on May 17. (Bloomberg/Yahoo)

🇪🇨 Ecuador

Ecuador's president has issued a decree updating the income tax reduction thresholds and the simplified regime for entrepreneurs. The Ecuadorian President's Office announced the 2023 income tax reduction thresholds and updated rules for taxation under the Simplified Regime for Entrepreneurs and Popular Businesses. The announcement detailed the calculation procedure for the new personal expenses regime, which determines the maximum income tax reduction on gross annual income of up to $300,000 for entrepreneurs, and $20,000 for popular businesses. Additionally, it clarified the list of activities not eligible for the new tax regime, and updated the personal income tax tables with rates and thresholds for taxpayers. (Bloomberg)

🇸🇻 El Salvador

At least 153 died in custody in El Salvador’s gang crackdown – report. Human rights group’s 107-page report details human cost of President Nayib Bukele’s controversial ‘war on gangs’. The NGO said it had confirmed 29 of those fatalities as violent deaths and another 46 were considered suspicious. In most of those 75 cases, Cristosal said the bodies of the victims showed signs of torture, beatings or strangulation. Other dead inmates also showed signs of injuries but were classified as having died of “undetermined” or “natural” causes meaning the true number of violent deaths could be higher. (The Guardian)
A judge sentenced former El Salvador President Mauricio Funes to 14 years in prison Monday for negotiating with gangs during his administration.
Funes’ trial began in April with the former leader living in Nicaragua. El Salvador changed its laws last year to allow trials in absentia. Prosecutors had accused Funes of illicit association and failure to perform his duties for the gang truce negotiated in 2012. Funes had denied negotiating with the gangs or giving their leaders any privileges. Funes’ former Security Minister Gen. David Munguía Payes was sentenced to 18 years in prison for his involvement in the negotiations. Munguía Payes said after the sentencing that the trial was full of irregularities. “I consider myself a political prisoner, for only having served as the ex-minister of President Funes. They accuse me of a series of accusations that have no foundation,” he said. (AP)

🇬🇹 Guatemala

Guatemalan police arrested the country’s prosecutor for crimes against migrants Friday, accusing him of alleged abuse of authority. Stuardo Campos was formerly an anti-corruption prosecutor in the country during the administration of former President Jimmy Morales. It was not immediately clear whether the accusations pertain to his current position or the former. The complaint against Campos was made by the far-right Foundation Against Terrorism, a group that started out defending military officers accused of war crimes, but has also targeted members of the justice system who worked corruption cases. “This complaint is spurious,” Campos said. “I know that my work as an anti-corruption prosecutor earned me animosity in a lot of sectors.” Campos was known for an investigation related to a government highway project during the Morales administration. A number of officials from that administration were arrested when repeated landslides and other problems were blamed on poor construction. (ABC)
The Constitutional Court of Guatemala has ruled to end the presidential campaign of dark horse candidate Carlos Pineda, with only one month remaining before voting begins. Pineda, a conservative businessman with a strong social media following, had appealed to the country’s highest court after a judge suspended his candidacy a week ago, citing noncompliance with the country’s election laws. But the Constitutional Court on Friday upheld the lower court’s ruling, which found that Pineda failed to collect signatures from party delegates and file required financial reports, as required in the nomination process. That decision provoked a fiery response from Pineda, who had recently emerged as the frontrunner in one election poll. “Corruption won, Guatemala lost,” Pineda wrote in one social media post.
In another, he said the Constitutional Court had endorsed “electoral fraud” with its ruling: “We are left without democracy!!” (Al Jazeera)
Guatemalans living in the United States could help sway their homeland's politics when they vote in its June 25 presidential election. But despite the diaspora's potential clout, only a handful of candidates turned out for a May 5 candidate forum in Los Angeles. That left Southern California's Guatemalan community frustrated and angry, feelings that many know all too well when it comes to national politics. Twenty-three candidates are contesting the office of President of the Republic of the profoundly troubled Central American nation. All of them will be chasing the 89,554 registered voters who now reside on U.S. soil. The metropolitan triangle that comprises Los Angeles, Long Beach, and Santa Ana is home to the largest share of the U.S. Guatemalan diaspora, about 230,000 people out of a total estimated to be as large as 1.6 million. (Yahoo)

🇲🇽 Mexico

The United States Treasury sanctioned more than a dozen people and businesses in China and Mexico Tuesday that allegedly helped provide machines used to make counterfeit prescription drugs in the latest efforts to confront trafficking of the deadly synthetic opioid fentanyl. Those targeted for sanctions were all involved in one or another with the sale of pill press machines, molds and other equipment drug cartels use to produce counterfeit pills. (ABC)
Virginia governor the latest to send troops to US-Mexico border. Governor Glenn Youngkin has deployed 100 National Guard members as human rights advocates decry border ‘militarisation’. (Al Jazeera)
Mexican President Andrés Manuel López Obrador on Thursday urged Latino voters not to back Florida Governor Ron DeSantis in the next U.S. presidential election, accusing the Republican politician of trying to win votes at the expense of migrants. DeSantis said Wednesday he would seek the 2024 Republican nomination for president and vowed to build a wall on the Mexico border, the latest in a series of hardline comments on immigration that he says resonate with Latino voters who want strong enforcement. (NBC)
Mexican retail and bottling giant Femsa said Wednesday it had reached a "definitive" agreement to sell its stake in Jetro Restaurant Depot for $1.4 billion, furthering its strategy to simplify its business, and sending its shares up. The transaction will close in the second quarter of this year, when it will receive $467 million upfront, with the final chunk paid in the subsequent two years, it added in a statement, without specifying who the buyer. Shares in Femsa rose over 4% during the day, while Mexico's main stock index was trading down almost 1%. The sale comes as part of Femsa's new strategy, announced in February, to concentrate on its core retail and bottling businesses. (Reuters/US News)

🇺🇸 Miami

Porsche, Bentley, Armani: Why Miami can’t build enough branded high rises. (FT)

🇳🇮 Nicaragua

Writer Gioconda Belli, stripped of citizenship by Nicaragua's government, wins poetry prize. Belli, one of Latin America's best-known poets and novelists, won Spain's Reina Sofia Ibero-American Poetry prize. Ortega's government also seized her properties in Nicaragua. (NBC)

🇵🇪 Peru

Joran van der Sloot, the prime suspect in the unsolved 2005 disappearance of American teenager Natalee Holloway, has been severely beaten in Peruvian prison, his lawyer told ABC News on Monday. Van der Sloot is awaiting extradition to the U.S. on extortion and wire fraud charges stemming from an accusation that he tried to profit from his connection to the Holloway case. (ABC)
At least 27 people have died in a gold mine fire in Peru, in the worst mining accident in the country in decades. The mining company, Yanaquihua, said 175 miners were rescued. It is a small mine in the Arequipa region, in the south. An electrical short-circuit is thought to have sparked the fire. Officials said the miners were working about 100m (330ft) below the surface when the blaze broke out. (BBC)
Mining giant Glencore Plc plans to invest $1.5 billion on an expansion project at its Antapaccay mine in Peru, up from $590 million announced previously, a company executive said, in a bid to unlock the stalled plan key to maintaining copper output. Carlos Cotera, general manager of Antapaccay Mining Co, told Reuters the Glencore unit was pushing forward the "Coroccohuayco" project, which aims to extend the mine's lifespan by decades. In recent years, production has been stalled as the quality of ore grades declined. (Reuters)

🇵🇷 Puerto Rico

Yes, Puerto Rican licenses are valid in the U.S., Hertz reminds its employees. Hertz has clarified to its employees that Puerto Rican driver's licenses are valid forms of identification for customers, following an incident in which agents of the rental car company called the police on a Puerto Rican man after demanding he show his passport in order to pick up a car. (NPR)

🇺🇾 Uruguay

Uruguayan digital payment firm dLocal (DLO.O) has received an information request from Argentine authorities and plans to respond by a June 6 deadline, a co-founder said, after news about an alleged fraud probe hit the stock last week. The tech "unicorn" took a hit on Friday after Argentine news outlet Infobae reported that the government was investigating dLocal for "improper maneuvers" and fund transfers abroad of at least $400 million that would constitute possible fraud. (Reuters)
The presidents of Uruguay and Chile criticized the support for Venezuela’s Nicolas Maduro given by their Brazilian counterpart, underscoring the challenges the South American leaders gathered in Brasilia are facing to build consensus and broaden cooperation in the region. Uruguay’s Luis Lacalle Pou said on Tuesday he was “surprised” to hear Luiz Inacio Lula da Silva saying that a “narrative of anti-democracy and authoritarianism” has been created to hurt Maduro. The Brazilian president had made those remarks during a press conference on Monday, after hosting his Venezuelan counterpart for a bilateral meeting in the nation’s capital. (Bloomberg)

🇻🇪 Venezuela

Venezuelan president, Nicolas Maduro, is visiting Brazil for the first time in eight years as Brazil's former president Jair Bolsonaro banned him from entering the country in 2019. But Luiz Inacio Lula da Silva has invited him back and hinted at new measures to take on the US. (SkyNews)

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