Brazilian Fintech Raises $255M to Expand Throughout the Region
Mexico has become the fourth country in the world- and the first in Latin America- to approve emergency use of Pfizer’s COVID-19 vaccine. In VC news, Mozper, a platform designed to promote financial literacy among Latin America’s youth, closed a $3.55M Seed round.
This week, Creditas raised $255 million in new financing, Argentina Seeking $5B from Multilateral Banks for 2021, and LatAm Unemployment Passes 10% due to Pandemic, and Mexico’s Minimum Wage to Rise 15% Over Business Objections.
Brazilian Lending Company Creditas Raises $255M as Latin America’s Fintech Explosion Continues
Brazilian lending business Creditas has raised $255 million in new financing as financial services startups across Latin America continue to attract massive amounts of capital.
The company’s credit portfolio has crossed 1 billion reals ($196.66 million USD) and the new round will value the company at $1.75 billion thanks to $570 million raised in outside financing over five rounds.
Investors in the round include new investors like LGT Lightstone, Tarsadia Capital, Wellington Management, e.ventures and an affiliate of Advent International, Sunley House Capital. Previous investors including SoftBank Vision Fund 1, SoftBank Latin America DFund, VEF, Kaszek and Amadeus Capital Partners also returned to put more money into the company.
Argentina Seeking $5 Billion from Multilateral Banks for 2021
Shunned in global financial markets, Argentina is seeking roughly $5 billion for 2021 from multilateral organizations (other than the International Monetary Fund) as it negotiates a larger refinancing program with the IMF.
Bloomberg reports that Alberto Fernandez’s administration is looking to institutions including the Inter-American Development Bank and the World Bank. Plans are in the early stages, and the borrowing needed is an approximation that could end up being more or less dependent upon variables like government revenue and exports, the people said.
The funds will be used to achieve fiscal sustainability as the Latin American nation works up a multiyear macroeconomic plan to present for IMF approval. Fernandez’s government has said it would prefer to avoid asking for fresh funds from the IMF as it negotiates to delay payments on about $45 billion from a failed program under the previous government.
LatAm Unemployment Passes 10% due to Pandemic
Unemployment in Latin America and the Caribbean will end the year over 10 percent after 30 million jobs were lost during the coronavirus pandemic, the International Labor Organization (ILO) reported last Thursday.
"The 2020 labor overview records a large increase in the unemployment rate that will increase by up to 2.5 percentage points compared to last year, going from 8.1 percent to 10.6 percent[...] This means that the number of job seekers that cannot find (employment) will increase by 5.4 million and reach 30.1 million people" said the ILO in its regional annual report on employment.
Things are expected to get worse before they get better, with the ILO predicting unemployment will rise to 11.2 percent in 2021 despite a moderate economic growth of 3.5 percent.
Uncertainty over the evolution of the pandemic, the possibility of a new wave of infections and the delay in acquiring vaccines for the region have all contributed to the pessimistic projections.
"Employment is in an intensive care unit, we need to take the necessary measures to get out of this healthily and with prosperity and sustainable employment growth," said ILO regional director Vinicius Pinheiro.
Mexico’s Minimum Wage to Rise 15% Over Business Objections
The Mexican government announced the country’s daily minimum wage will rise by 15% in January to the equivalent of about $7 per day. The new wage still amounts to less than $1 per hour, but the increase is well above the country’s current 3.3% inflation rate.
Last Thursday, President Andrés Manuel López Obrador said the business sector had proposed an increase of 10%, but was outvoted by labor and government representatives on the tripartite commission that determines minimum wages.
“Workers are going to get an increase that is still, on the world scale, shameful,” the Mexican President stated.
Mexico’s minimum wage is the lowest in Latin America and the lowest in the Organization for Economic Cooperation and Development.