This article was published on January 4, 2016

Tech in Latin America: All the news you shouldn’t miss from the past month


Tech in Latin America: All the news you shouldn’t miss from the past month

The last month of 2015 was a busy one in Latin America’s tech scene. While there were relatively few funding round announcements, several events made international headlines — and didn’t always paint its institutions in a very positive light. Here’s the news you don’t want to miss:

Big players

A local Brazilian judge with a tough reputation caused worldwide dismay by ordering a 48-hour ban on WhatsApp across the country as part of an ongoing court case involving the Facebook-owned messaging service. Telecom operators initially complied with the order and blocked the app, despite many voices pointing out that the ruling was against the country’s Constitution and Marco Civil, a landmark bill on the internet adopted in 2014 to protect net neutrality, freedom of expression and right to privacy.

Mark Zuckerberg also criticized the decision, stating he was, “stunned that our efforts to protect people’s data would result in such an extreme decision by a single judge to punish every person in Brazil who uses WhatsApp.”

Although the ban ended up being lifted early, it still may have caused some long-lasting damage to WhatsApp’s market share, as competing app Telegram claims to have won 5.7 million new users on December 17th alone. On the other hand, the uproar confirmed WhatsApp’s tremendous popularity in Brazil, where 93 percent of the respondents in a recent Ibope survey among internet users claimed to be using the app.

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In other Facebook-related news, the social network rolled out its Instant Articles service to iOS users in Argentina, Brazil, Chile, Colombia and Mexico, in partnership with 40 news organizations such as Adoro Cinema, Bolsa de Mulher, Capricho, Esporte Interativo and Telemundo. The service is also set to land on Android “in the coming weeks.”

As for Google, it announced an upcoming $1 million investment in handpicked Brazilian startups which will receive support and equity-free funding from its Launchpad Accelerator program. Brazil aside, this new initiative will also roll out in India and Indonesia, with other countries to follow.

The first 8 Brazilian participants are AgroSmart, Cuponeria, Elo7, Hand Talk, ProDeaf, Qranio, SuperPlayer and UpBeat Games. According to Google’s Global lead for its Launchpad programs Roy Glasberg, who talked to TechCrunch, “the accelerator was born out of Google’s existing Launchpad program for startups and its global series of events that launched about two-and-a-half years ago.”

Still in Latin America, Google kept expanding its mapping of the region, with the addition of several Uruguayan locations to Google Street View and the inclusion of the Peruvian historical sanctuary of Machu Picchu into Google Maps.

machu picchu google

Google also announced that its Chile-based data center would be exclusively powered by solar energy by 2017. Located in Quilicura and inaugurated in early 2015, it is Google’s first data center in Latin America. Thanks to an agreement with Spanish power company Acciona Energía, it will be alimented by a photovoltaic park in the Atacama desert.

Google Now on Tap also became available in Spanish on all devices running Android Marshmallow, whose owners will now be able to access this feature through a long press on the start button. Other supported languages include French, German, Italian, Russian, and Korean, with more languages planned to follow, according to The Verge.

Meanwhile, Skype Translator started supporting Brazilian Portuguese as one of the languages for which it provides speech-to-speech translation on Windows Desktop. “We continue to be tremendously grateful to our partners at Microsoft Research who have worked tirelessly to improve the technology’s accuracy and have played a key role in releasing new languages,” the Skype team wrote in a blog post.

On a less positive note, Mozilla revealed it would stop developing and selling Firefox OS smartphones, which were geared towards customers in emerging markets but whose sales failed to take off. The announcement was made at developer event Mozlando, and was followed by a statement in which Mozilla stated that it would, “share more on our work and new experiments across connected devices soon.”

M&A

Taxi booking apps Easy Taxi and Tappsi announced their merger, although they will continue to operate independently with separate teams and brands. While terms weren’t disclosed, the deal isn’t framed to the outside world as a takeover and a press release referred to it as, “the largest startup merger in Latin America.” Combined, Easy Taxi and Tappsi complete eight million rides per month. For comparison, Uber recently claimed to be powering three million trips a day worldwide.

The two merging companies share similar early stories: Easy Taxi was born at Rio Startup Weekend in 2011, while Tappsi was founded in 2012 by Colombian entrepreneurs Andrés Gutierrez and Juan Salcedo (the latter of whom will remain Tappsi’s CEO).

Then their paths diverged, with Rocket Internet-backed Easy Taxi raising a whopping $77 million over several funding rounds to fuel its fast global expansion. Tappsi meanwhile, remained focused on Ecuador, Peru and its home market, Colombia, which Easy Taxi entered in 2012 and have been competing strongly ever since.

Although Easy Taxi remains a global company with CEO Dennis Wang at its helm, it had folded operations in several Asian countries in late 2014. This deal seems to confirm its renewed interest in Latin America, where it could be better positioned to battle direct competitors, such as fast-growing Brazil-based 99Taxis, as well as against Uber, which launched into its sixth Colombian city, Cartagena.

Together, Easy Taxi and Tappsi hold more than 90 percent of Colombia’s market share for taxi booking apps. More importantly, there is still plenty of space for growth, as only 15 percent of all taxi rides are scheduled via taxi booking apps, according to both companies.

Easy Taxi & Tappsi merge offical team photo

Brazilian online retail heavyweight B2W acquired Shopgram, a platform that helps fashion creators use WhatsApp and Instagram as sales channels where they can set up shop. According to Startupi, its portfolio includes 1,500 shops, supported by a team with expertise in mobile and UX.

B2W is the result of a merger between Americanas.com and Submarino; it wasn’t disclosed how much it would pay for Shopgram but indicated that the acquisition would help it boost the growth of its own marketplace for third-party products.

Miami-based English learning company Open English “acquired” tech education startup Next University, which was founded two years ago by Open English’s CEO Andres Moreno. According to the Miami Herald, “the boards of [both companies have decided they are stronger together. The vision went from being the leader in online English in emerging markets to being the leader in education in emerging markets,” Moreno said in a quote.

Berlin-based deal sharing community Pepper.com joined forces with Brazilian cashback site Méliuz to launch Pelando.com.br, which they describe as Brazil’s first social commerce platform. In practical terms, it lets shoppers publish, discuss and upvote promotions, bargains and freebies, while advertisers such as Submarino and Netshoes are charged on a CPC/CPO-basis.

As Tech.eu pointed out, “Pepper.com is quietly building a hot – and global – social commerce empire out of Berlin,” with a growing portfolio of ad-supported deal sites in several countries, including Mexico with Promodescuentos, and now Brazil, which Pepper.com’s co-founder Paul Nikkel refers to as, “one of the fastest growing and most attractive e-commerce markets worldwide.”

Funding rounds

Mexican fintech startup Clip raised $8 million from Mexican and US-based investors, including Alta Ventures, American Express Ventures, Sierra Ventures, Angel Ventures Mexico, Fondo de Fondos and Endeavor Catalyst.

The startup is very similar to US-based Square, and provides merchants with a small card-reading device that turns smartphones into a mobile point of sale. It also adapted its approach to the needs of emerging markets.

“With Clip, merchants can offer payments in installments to their clients with more than 18 issuers in Mexico. This makes small and medium businesses really competitive in the marketplace,” Clip’s CEO Adolfo Babatz explained.

clip mexico

Brazilian digital firm Hive Digital Media raised a R$4 million investment (around $1 million USD) from its own founders and from public-private fund Criatec 2, which is managed by Bozano Investimentos. “Hive is not a communications agency that migrated to digital. It is a tech company that specialized in solutions to the marketing needs of brands and agencies,”  co-founder Mitikazu Lisboa said in a statement (translation ours).

Mexican furniture and design retailer Gaia Design raised $2.5 million and is eyeing expansion into other Latin American markets, according to PulsoSocial. The round was co-led by Mexican fund Capital Invent and US firm Rise Capital, with participation from FJ Labs, Variv Capital, Cubo Capital and angel investors.

Brazilian fund Copacabana House Ventures made its first investment in ed-tech company Tyngu, an e-learning platform that teaches Latin American users digital marketing skills through online video courses.

Finally, ALLVP invested in Mexican fintech company Visor, a loan originator and customer management platform for financial institutions which helps SMBs get access to financing. Visor is also backed by 500 Startups.

On a related note, 500 Startups announced that its Miami Distro accelerator program would be back in 2016, following the inaugural edition that took place last fall. As you may remember, its first participants were Cinepapaya, ClutchPrep, Kairos, MXHero, Ofi, Rocket, Shopeando and Social Tools.

Expansions and new launches

Bukeala launched operations in Colombia following a $1.2 million deal with one of the country’s largest medical insurance companies, which will see its new Colombian offices provide services to Sanitas International’s two million clients. Born in Argentina in 2012, Bukeala started out as a restaurant booking service before pivoting into the health sector, and now provides cloud services for health networks, including agenda and data management.

Dating app Bumble launched on Android, one year after its first iOS release and ahead of a push into Australia, Brazil, France and Spain. Created by Tinder’s co-founder Whitney Wolfe, it is meant to be more female-friendly than its competitor, with whom Wolfe settled a lawsuit for sexual harassment in 2014.

Company “co-builder” Rokk3r Labs officially announced the launch of its portfolio company Oye Marco!, a WhatsApp-powered concierge service that became available last August to mobile users in Bogotá and plans to expand into other cities around the world. “We hope to become the place to go to in Latin America when you need a service arranged quickly and without hassle,” Oye Marco!’s CEO Andres Ortega commented.

Clients don’t get charged until receiving and accepting a quote from one of the service’s operators; once they do, payments are processed through online service PayU.

oye marco

Legal news and public policy

The Puerto Rico Science, Technology & Research Trust launched Parallel18, “an economic development initiative that aims to attract and create high-impact startups that can scale from Puerto Rico to global communities beyond the island.”

Some 40 local and international startups will be selected through YouNoodle to participate in a five-month program and receive a $40k equity-free grant, with an opportunity for equity-based follow-on investment from dedicated fund Trust Venture if they choose to keep their business in Puerto Rico.

In other words, Parallel18 is very similar to Start-Up Chile, whose former executive Sebastian Vidal is Parallel18’s executive director. However, it also plans to capitalize on Puerto Rico’s specificities, among which Vidal highlights, “a multicultural society and a connected diaspora throughout the world; convenient geographic location; lower cost of living and resources; and competitive taxation under U.S. laws.”

In the long run, its goal is to contribute to the economic development of the island, hence the $1 million in funding it received from the Department of Economic Development and Commerce and the Puerto Rican Industrial Development Company to complement its initial $1 million budget.

Back in Argentina, the country’s new President Mauricio Macri ended up opening a new official Twitter account for the presidency after his predecessor refused to give up control of the previous one, @CasaRosadaAR (Casa Rosada being Argentina’s equivalent to the White House).

As El País noted, a fresh start might have been the best transition, as the old account was known for spats with opponents and partisan views. It was subsequently renamed as “Casa Rosada 2003-2015” and saw its Verified stamp removed by Twitter, while the new, verified account goes by a handle previously left inactive by a Brazilian marketing company: @CasaRosada. Its new biography? “Entering a period of dialogue. Welcome to Casa Rosada!”

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Image credit: Microsiervos on Flickr

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