Argentine Fintech Ualá Raises $150M Led by Tencent and SoftBank, Chilean Lawmakers Warn Democracy at Stake as Violence Spikes, Softbank Leads $140 Million Funding Round for Brazilian Startup VTEX, and More from LatAm

Other featured stories include: Alphabet’s Loon Signs Deal with Telefonica to Provide Internet to Remote Parts of the Amazon in Peru, Ericsson to Invest over $230 Million in Brazil to Build New 5G Assembly Line, and Why Latin America’s Protests Could Slow Brazil’s Economic Reforms.

Argentine Fintech Ualá Raises $150M Led by Tencent and SoftBank

Argentine personal finance management app Ualá has raised a $150 million Series C led by Tencent and SoftBank’s Latin America-focused Innovation Fund.

Ualá is a mobile banking app and lending platform with services similar to Revolut, Monzo and Nubank, however the platform has no intention of actually becoming a bank itself.

Founder and CEO Pierpaolo Barbieri says his ambition was to create a platform that would bring all financial services into one app linked to one card (Tech Crunch).  

Ualá is linked to a prepaid, global Mastercard and allows users to transfer money, invest in mutual funds, request loans, pay bills and top-up prepaid services.

While SoftBank has rapidly deployed its Latin America-focused Innovation Fund, Ualá’s Series C marks SoftBank’s entry into Argentina. While Argentina is well known for its established developer talent and high entrepreneurial spirit, the country has remained under-capitalized.  

Although Argentina is in the midst of a presidential leadership shift, as well as a $330 billion debt burden, personal mobile banking services like Ualá that promote a more open, inclusive, and competitive financial system are resonating with the market and investors.

According to Tech Crunch, Barbieri doesn’t have his sights set on expanding Ualá into any other Spanish-language countries at this time. Ualá has 1.3 million issued cards in a market of 45 million people – so there’s still a lot more work to be done in Argentina alone.

Photo Courtesy of Tech Crunch

                                                     Photo Courtesy of Tech Crunch

Barbieri told Tech Crunch that this new capital will be used to triple the company in size, hiring about 400 people between operations and technical roles. Capital will also be used to scale the teams that touch partnerships and business development. Ualá has existing partnerships with tech companies like Netflix, Rappi and Spotify, and intends to strengthen and expand similar deals over time.

The fintech, launched in October 2017, last raised $34 million in 2018 led by Goldman Sach’s venture unit, along with Ribbit Capital and Monashees.

Tencent also invested an undisclosed amount earlier this year in March. The most recent round brings Ualá’s total funding to $194 million. Barbieri declined to comment or benchmark Ualá’s valuation.

Chilean Lawmakers Warn Democracy at Stake as Violence Spikes

Chilean lawmakers agreed to fast-track reforms to increase security, warning that resurging violence and vandalism was threatening to derail the country’s 30-year-old democracy.

Five weeks of unrest over inequality and lack of adequate social services have left at least 26 dead and more than 13,500 injured, prosecutors said. Riots have disrupted the capital’s public transport system and caused billions of dollars in losses for private business (Reuters).

The deal, agreed upon between ruling party and opposition lawmakers, acknowledged the Chilean government had done too little, too late to resolve the crisis.

“The country is confronting a crisis of violence and vandalism that threatens our democracy,” begins the two-page document.

Earlier this week, a new round of attacks and rioting caused Chile’s peso to plummet to a new low against the dollar at the market close on Wednesday. Forecasts for economic growth and unemployment are increasingly dismal.

President Sebastian Pinera urged Congress earlier on Wednesday to push bills forward that he’d introduced weeks ago to beef up intelligence gathering and toughen penalties against the rampant looting and destruction.

“Violence is causing harm that may become irreparable to the body and soul of our society,” Pinera said.

Chile’s Interior Ministry reported that police arrested 915 people Tuesday, while the number of “serious incidents” overnight had nearly doubled from the previous day (Reuters).

Softbank Leads $140 Million Funding Round for Brazilian Startup VTEX

Last Friday, SoftBank Group announced its Latin American fund is investing R$ 580 million reais ($138 million USD) in Brazilian e-commerce software provider VTEX, alongside Brazilian funds Gavea Investimentos and Constellation Asset Management.

VTEX provides e-commerce services in Latin America for clients like cosmetics brand Boticario, cellphone producer Motorola, and appliance maker Electrolux.

Founder and CEO Geraldo Thomaz, said in a statement that the proceeds will be used to expand research and development, including new artificial intelligence software for e-commerce (The New York Times).

Alphabet’s Loon Signs Deal with Telefonica to Provide Internet to Remote Parts of the Amazon in Peru

Alphabet-owned Loon, the high-altitude balloon company that uses stratospheric technology to provide internet connectivity, signed a new commercial agreement with Telefonica-owned Internet para Todos (IpT).

The IpT initiative, which is also backed in part by Facebook and the Development Bank of Latin America, aims to provide internet connectivity to users in remote locations across Latin America. Its deal with Loon will specifically connect users in remote parts of the Amazon rainforest in Peru.

As reported by Tech Crunch, Loon will begin providing service in 2020, provided the deal gets all the necessary regulatory approval it requires.

“This deal a first in terms of a commercial deployment of high-altitude balloons with the aim of offering connectivity over a continued, sustained period, so there’s some new ground to break in terms of working with the Peru Ministry of Transport and Communications prior to launch, but the partners involved are working with regulators to make sure everything’s signed off before launch.”

This isn’t the first time Loon has worked with Telefonica — in May, the two collaborated to  provide emergency internet connectivity following the 8.0 earthquake that hit Peru, and they’ve been working together on a number of projects for years.

This is Loon’s the third commercial contract it has secured, including one with Telkom Kenya, which is also awaiting final regulatory sign-off, and an arrangement with Canadian company Telecast to develop a coordination system for a future planned low-Earth orbit satellite constellation.

According to Tech Crunch the initial deployment plan for this partnership with IpT will provide connectivity to an area that makes up around 15% of the total area of the Loreto Region in Peru, which together accounts for a population of around 200,000 people. Of that 200,000, roughly one-quarter have access to connectivity at least at 3G quality, according to Loon.

Ericsson to Invest over $230 Million in Brazil to Build New 5G Assembly Line

Swedish telecoms equipment maker Ericsson plans to invest 1 billion reais ($238.30 million) in Brazil to add a new assembly line dedicated to 5th generation technology (5G) for its Latin American operations.

This move will likely stir competition with Finland’s Nokia and China’s Huawei Technologies Co, which also have factories in Sao Paulo state in the race to lead 5G deployment in Brazil.

“We already export 40% of all equipment assembled in Brazil to Latin American countries, and it will be no different with 5G,” said Eduardo Ricotta, president of Ericsson Latam South, in a phone interview with Reuters after meeting with President Jair Bolsonaro.

The investment will be made between 2020 and 2025 and includes the cost of hiring and acquisition of machinery, among other expenses, he added.

Initially, the Swedish company will spend 200 million reais to set up the new 5G assembly line in its factory located in Sao Jose dos Campos, a city near Sao Paulo, Ricotta said.

Ricotta said that 23 of the 5G networks already operating are using Ericsson’s technology and the group has signed 80 agreements around the world.

“We are the only manufacturer with operational 5G networks in all continents and these 23 are all large size networks, especially in the United States,” he said.

In its latest mobility report disclosed on Monday, Ericsson estimated that 65% of the world’s population will have access to 5G networks by 2025, with 2.6 billion subscriptions (Reuters).

Why Latin America’s Protests Could Slow Brazil’s Economic Reforms

When mass protests forced Ecuador’s President Lenín Moreno to reverse course on a cut to fuel subsidies last month, most Brazilian political risk analysts interpreted the crisis as a country-specific event.

An outbreak of protests in Bolivia the following week was seen as another isolated incident among Brazilians. Despite other recent protests in Peru, Honduras and Haiti, few observers in Brazil  believed such events would have broader implications for the region.

That notion changed when protests in Chile led to a social upheaval of a size and intensity unseen since the country’s return to democracy thirty years ago. When President Sebastián Piñera- fighting for political survival- put his pro-business agenda on pause and replaced his minister of finance and increased minimum wage and pensions, Brazilian analysts began scrambling to assess whether something bigger could be forthcoming. Questions arose if protests could spread to Brazil and cause Bolsonaro’s government to rethink one of the region’s few remaining “unabashedly neoliberal agendas” (America’s Quarterly).

Prior to recent events, the vast majority of Brazilian investors, supportive of economic reforms led by Finance Minister Paulo Guedes, considered Chile to be a model to follow. Chileans’ mass social mobilization against inequality and insufficient public services raised uncomfortable questions about the political feasibility of Guedes’ reform proposals.

The recent outbreak of protests in Colombia has not helped to alleviate these concerns. Political instability across the region has strengthened those in the Bolsonaro administration who want to delay the announcement of Guedes’ additional reform projects, fearing they could trigger a public backlash similar to those seen elsewhere.

“Given these fears – and uncertainty over the possible public reaction to proposed reforms – Guedes is unlikely to be able to push through his plans at the speed he initially envisaged.”

According to America’s Quarterly, in defending a more assertive approach to reform, Guedes is likely to point out several reasons why it would be simplistic to expect recent unrest elsewhere in the region to spread to Brazil.

“The protesters’ key strength may lie in their leaderless format, which makes it nearly impossible for governments to negotiate with representatives and then lull them into largely symbolic compromises. This may explain why most protest movements do not allow opposition leaders to speak on their behalf – even though some, such as Colombia’s Gustavo Petro, have tried – and why ex-president Luiz Inácio Lula da Silva’s recent release from prison is unlikely to affect chances of mass protest spreading to Brazil.”

As long as protests in other Latin American countries succeed and produce palpable benefits, the risk of them spreading to other countries, including Brazil, remains relatively high.

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