Colombia Could Take on Shares in Companies Hit by Coronavirus and more
Colombia could take stakes in businesses struggling because of the coronavirus outbreak in a bid to help them continue to operate, a presidential decree published last Friday said.
Colombia Could Take on Shares in Companies Hit by Coronavirus
Colombia could take stakes in businesses struggling because of the coronavirus outbreak in a bid to help them continue to operate, a presidential decree published last Friday said.
As reported by Reuters, the business owners would have to commit to buying back the shares within a certain time frame or selling the participation to a third party without affecting operations.
This measure seeks “to provide resources while the emergency continues,” the decree said. Colombia began a coronavirus quarantine in late March that is set to last until July 1. Businesses must continue to pay salaries, taxes, pension and health contributions and all other financial obligations.
“These transfer programs will be based on technical suitability studies, which will include a valuation of each entity in which the state may acquire shares or participation and the determination of the conditions that will preserve public funds,” the decree said.
Colombia’s companies regulator has said the number of companies filing for protection under Colombia’s insolvency law could nearly double if the economy contracts 1.9% this year because of fallout from its coronavirus lockdown.
The Finance Ministry has estimated the economy will contract 5.5% this year.
Colombian Point of Sale Financing Platform ADDI Raises $15 Million Series A Extension
ADDI, a Bogota-based provider of point of sale (POS) financing solutions for Latin America, announced the close of an equity financing of $15 million on Tuesday. The round was led by Quona Capital, a venture firm focused on fintech in emerging markets, alongside existing investors Andreessen Horowitz and Monashees. New investors include S7 Ventures, Foundation Capital, and DST partner Tom Stafford. The new funding will be used to grow ADDI’s business in Colombia and to expand to new Latin American markets.
ADDI aims to power commerce and make point-of-sale financing accessible to every Latin American merchant and consumer.
According to Global Newswire,
“The company’s POS platform presents loans to consumers as installment plans at checkout, with a clear schedule of payments due over time that can be approved in less than 10 minutes, while existing credit options might take hours or several visits to the store.”
ADDI helps make higher ticket products and services accessible for consumers who today have limited financing options. For merchants, both offline and online, ADDI’s POS financing options free up capital and improve sales by offering payment options at checkout.
“In Colombia and Latin America, most consumers lack access to convenient and affordable credit products, if they can access financing options at all…Only a small percentage of Latin American consumers have credit cards, and those who do pay very high effective interest rates, tend to reserve balances for emergencies, and have very low credit limits. We want to empower underserved consumers to afford their life’s goals by giving them fair and affordable financing at the point of sale,” said ADDI co-founder and CEO Santiago Suarez.
ADDI was established in Bogota in 2018 by co-founders Santiago Suarez, Daniel Vallejo, and Elmer Ortega. Suarez, who serves as the company’s CEO, ran the New Product Development & Emerging Tech group at JPMorgan Chase, and was responsible for strategy and corporate development at LendingClub. Suarez also advised fintechs through Y Combinator before returning to Colombia to start ADDI. Vallejo, ADDI’s CFO, was formerly with McKinsey & Company focused on consumer banking, and also worked for a private equity fund focused on Latin America. Ortega, the CPO for ADDI, is the former Risk & Technology Manager for TFG, a leading Colombian trading firm.
“We believe ADDI has the right strategy, technology platform, and team to build a category-leading company in Colombia and the rest of Latin America…In this time of COVID, it’s particularly critical for merchants to offer consumers convenient payment options. ADDI’s solution benefits underserved consumers with the payment options they need, while also freeing up capital and improving sales for merchants,” said Quona Capital co-founder and partner Jonathan Whittle.
The Global AI Agenda Report: Latin America
The “global AI agenda” report thought leadership program by MIT Technology Review Insights examines how organizations are using AI today and planning to do so in the future. Featuring a global survey of 1,004 AI experts conducted in January and February 2020, it explores AI adoption, leading use cases, benefits, and challenges, and seeks to understand how organizations might share data with each other to develop new business models, products, and services in the years ahead.
The regional summary explores how executives in Latin America see AI: the opportunities, challenges, and the potential for data to be shared with third parties for mutual benefit.
The main findings of the report are as follows:
Almost 80% of large Latin American businesses are using AI.
As of 2019, four in five businesses in Latin America have launched AI initiatives. Early results show benefits, primarily to operational efficiency and management decision-making. By 2022, AI will be used across 21%-40% of business processes at two-thirds of organizations surveyed in the region. Latin America has a robust ecosystem of startups, yet a lack of talent and the high cost of technology remain obstacles to AI.
Future AI investments will target sales and marketing and logistics and supply chain.
Over half of respondents (55%) cite customer service as their main AI application so far, and evidence across the region shows innovations like chatbots and AI-driven customer analytics in sectors including banking, air travel, transport, and e-commerce. By 2022, the number of companies using AI in sales and marketing and in logistics and supply chain will double. In three years, logistics and supply chain will be the region’s most widely applied AI use case.
Latin America’s AI ecosystem would benefit from greater policy continuity and regional collaboration.
Many countries in the region have developed or are developing national AI plans, but political volatility is interrupting or limiting policy continuity. A second challenge is the region’s limited voice and participation in the development of global AI governance and ethics frameworks; experts are concerned that the dominance of other blocs, especially the EU, could result in frameworks that are harder for Latin American companies to adhere to.
Insights into Latin America’s Top 3 Government-Tech Hubs
The Development Bank of Latin America (CAF) and Oxford Insights have teamed up and published their first-ever GovTech Index report.
By studying 28 indicators, the report ranked 17 of CAF’s member countries from Latin America and Iberia by the robustness of their govtech ecosystems. The report’s three pillars included:
- Startups Industry
- Government Policies
- Procurement Systems
As reported by Contxto,
“Governments in Latin America are infamous for being bloated and clunky at solving problems. Sometimes they’ll do so through illicit means. Certainly, govtech can lend a hand—if only authorities, the overall culture of a country and the startup ecosystem allow for it.”
Spain and Portugal took first and second place respectively as having the best govtech ecosystems. The top three Latin American countries were ranked as follows:
For the report, the ease with which an entrepreneur can launch a business in Chile was a big factor. It also mentions the high digital skills of Chileans as another positive mark. Likewise, it has the tech infrastructure to further develop innovative solutions for the public sector.
The country should also be praised for their e-procurement system ChileCompra, which has added transparency and accountability for transactions between public officials and businesses.
The report has recommended that the Chilean government dedicate more resources to measuring the impact of its open data policies, and also calls for a national strategy that addresses govtech.
Lastly, it is important to note that Chile has the lowest levels of corruption in Latin America, making it the Latin American country best poised to lead in govtech.
The largest Latin American country is also home to the largest number of govtechs in the region. Moreover, there are plenty of venture capital firms in Brazil. In addition, the government has shown openness to digitize as many of its operations as possible.
The biggest setback for Brazil is its ongoing crisis of trust between the government and its citizens. Multiple corruption scandals in recent years have deteriorated their ties and may take time to rebuild.
According to the study, Mexico has its fair share of govtechs. Likewise, the Mexican population has a hands-on approach when it comes to solving public problems. However, there is a lot of suspicion and mistrust is often directed towards the public sector.
One problem is the country’s lack of an all-encompassing federal strategy that promotes govtechs. Instead, often local governments will act and launch their own initiatives at will. Lastly, the low number of contracts the government awards startups isn’t promising.
Cabify Prepares Its Drivers And Riders Across Latin America With New Covid-19 Measures
As the number of Covid-19 cases in Latin America passes more than one million, one of the region’s biggest ride-hailing companies, Cabify is bearing down with several protective measures for drivers and planning bike operations.
Ride-hailing companies may be trying to revive business in North America and Europe as cities’ economies re-open – with various safety protocols in place – but the scene in Latin America is very different. The crisis has deepened in many countries in Central and South America in the last number of weeks.
While headquartered in Spain, the vast majority of Cabify’s business is in Latin America where it holds a sizable market share versus Uber and other players.
According to Forbes, in early May, Cabify announced a $1 million package to provide personal protective equipment, hand sanitisers and protective screens between drivers and riders, including the distribution of 100,000 masks.
This move came just a few days after the governor of the state of São Paulo in Brazil made masks mandatory on public transport. The company is urging its drivers to wear protective attire like masks and said that where authorities deem masks mandatory, they are complying.
“In this first stage of safety and protective measures, we are working to facilitate the installation of over 7,000 safety screens, most of them are already installed in Chile, Brazil, Perú, México, Argentina, Colombia and Uruguay…Also, it is currently being considered how best to adapt the installation of screens to local regulations in other markets,” a spokesperson for the company said.
It has also put in place a rating system for passengers to rate these standards “from the security viewpoint”.
“[In] our latest rate figures, Cabify users are recognizing these safety measures as the second most valuable attribute in their experience after the journey. We strongly believe that maximizing mutual trust between drivers and riders is vital in the new normal,” the company said.
Like many ride-hailing and taxi app companies, Cabify has seen its operations greatly disrupted by the coronavirus outbreak. In the face of these challenges, El Español reports that the company is also looking into launching a bike-share service.
Founded in 2011 in Madrid, Cabify has raised over $470 million from investors including Rakuten Capital and Seaya Ventures. It operates in its native Spain but turned its attention to the Latin American market early on. The market was a solid one for Uber for a long time too but has attracted many competitors including Chinese giant Didi Chuxing, which acquired Brazilian startup 99 in 2018 for a reported $1 billion.
In February, Cabify announced that it was profitable in the last quarter of 2019, saying that it generated $3 million in earnings before interest, taxes, depreciation and amortization, with net sales of $29 million for that quarter. It’s a small profit in the grand scheme of things and Cabify is not a publicly-traded company so the figures can’t be scrutinised in great detail.
However it comes in stark contrast to the mounting losses that have dogged Uber and Lyft over the years and were laid out for all to see when both companies went public. What impact the coronavirus will have on Cabify’s bottom line in its chief markets remains to be seen.
Powering the Digital Transformation of Brazil’s Largest Companies
Compasso UOL is laser-focused on the services and solutions that companies in Brazil need to achieve true digital transformation. Its customers include many of the country’s leading enterprises in a wide range of industries.
“We often speak at Compasso UOL of using the power of technology to reinvent the heart of the business…We focus on services and solutions that really enable digital transformation, whether it’s managed services like Disaster Recovery-as-a-Service (DRaaS) and Desktop-as-a-Service (DaaS) that negate the need for traditional hardware-based approaches, or the adoption of innovations in advanced artificial intelligence, machine learning, analytics, and IoT that have the potential to upend entire industries. And we offer a wide range of cloud-related solutions, including those that enable our customers to connect directly to a virtual infrastructure,”says Cleyton Ferreira, CTO at Compasso UOL.
According to CIO, while many companies speak of digital transformation, Brazil’s retail industry showcases the capabilities Compasso UOL brings to organizations. Serving nine out of ten of the country’s largest retailers, Compasso UOL has an extensive track record integrating retailers’ traditional infrastructure with disruptive technologies that make it possible to interact with customers in new ways.
“The retail industry offers a compelling example of how we enable organizations of all kinds to radically change how they do business and offer new products and services that deliver remarkable experiences for their customers. For example, our customers can use our cloud offerings in conjunction with our big data and analytics solutions to personalize the online or multi-channel shopping experience, embrace our IoT offerings to improve production processes, and take post-purchase experiences to another level with chat bots that are powered by our machine learning applications. And all of this is done while enjoying the efficiencies and savings the cloud makes possible,” says Ferreira.
Ferreira stresses that, regardless of the scope of the deployment, agility and security are crucial. A software-defined approach also helps because every layer of infrastructure can be delivered with software, whether it’s storage, servers, or even network configurations.
“One of the key benefits of being a strong partner with VMware is that customers know our VMware Cloud Verified services are trusted and proven. Our customers look to us for the software-defined approach we make possible. They also know we can offer them private clouds with the same benefits of the public cloud in a customized and completely isolated or hybrid environment using the VMware technology they are familiar with and rely on. And with VMware, they know the security and control of critical applications is ironclad,” he says.
That’s not to say that the cloud solves everything. Ferreira says some legacy workloads aren’t viable in the cloud, due to costs that don’t justify their migration. Even so, he sees the move to a software-defined approach only accelerating.
“CIOs increasingly want to get out of the data center business,” he says. “One of the areas where we’ll see the greatest demand for the cloud in 2020 will be in cloud services and remote workspaces using DaaS. DaaS is yet another area where the cloud and a software-defined approach deliver exceptional, transformative benefits.”
Latin American Delivery App Rappi Launches Livestream Offer With Manuel Medrano
In the rapidly exploding world of online concerts, an unexpected and potentially massive player will test the waters of live entertainment later this month.
Rappi, a growing on-demand delivery platform that operates in nine Latin American countries, will begin hosting live performances, starting with a concert by Colombian singer/songwriter Manuel Medrano on June 19. Medrano’s one-hour show will be accessible live, for a small “entrance” fee, to Rappi’s 25 million registered users, spread across its home base of Colombia (5 million registered users), Argentina, Brazil, Chile, Costa Rica, Ecuador, Mexico, Peru and Uruguay.
“Rappi has a significant number of users who use the platform recurrently…Now, they can also find their favorite artists. It’s an added value for the Rappi platform where you’ll be able to do your transactions and also go [to] the events you want to go to. We are offering Rappi users a platform where they can connect with what they want to see. And we offer artists a monetizable platform where they can connect directly with over 25 million people. It’s a model with very clear monetization,” says Sebastian Ruales, global head of SuperApp for Rappi.
According to Billboard, Rappi’s sheer scale and ease of use could make it a game-changer in the digital live entertainment business, particularly in Latin America, where it operates. The company, launched just five years ago, becoming only the second Colombian startup to reach “Unicorn” status when it raised $1 billion in 2018, and it has been expanding its capabilities at a fast pace.
Originally launched as a delivery app, Rappi now takes its inspiration from apps like China’s WeChat, which combines a messenger service, social media, online shopping and payment to create a completely integrated mobile ecosystem.
Rappi, for example, not only provides “last mile” deliveries (the end delivery to the consumer), but also functions as a payment and banking app and an all-service app. With Rappi, says Ruales, you can access a broad range of services, from someone to come wash your car at home to someone [to] give you a manicure. Creating a platform for live events was a logical next step and an “added value.”
For artists, it’s guaranteed income. Rappi can either charge a small fee per viewer (which goes to the artist), or it can offer the concert for free to more people with sponsorship support.
In Medrano’s case, fans will pay a small fee for a 50-60 minute concert filmed in a state of the art Rappi studio that conforms to all health requirements during the COVID-19 lockdown.
“We’ve been wanting to do a show since the beginning of the lockdown, but we wanted it to clearly be a concert – not a livestream – a concert that originated from a platform specialized in concerts,” says Medrano, who hasn’t done any live streams since the beginning of Colombia’s strict lockdown orders took effect in March.
“I’m about playing live. That’s what I enjoy most,” adds Medrano, who is known for his soulful, guitar-accompanied ballads and his deep distinctive voice.
When Medrano and his manager, Fabio Acosta, began to explore options, they encountered Rappi as an alternative.
“When they told us they wanted to launch a livestream button, we were really intrigued and we got together.”
For artists, Rappi’s appeal lies in its huge user base, but also in the ability to monetize. Rappi does not take a percentage of earnings, but a “small take” to cover production costs and use of the platform.
“Our model is not to make money…I win because I offer a value proposition for users, where artist’s fans will be able to watch their artist and will want to join Rappi. Rappi acts as a big microphone that amplifies the audience,” says Ruales.
For Medrano, that will mean singing and playing his guitar in front of potentially millions of paying customers versus simply YouTube users.
"I’m going to perform in my most intimate format, playing my songs with just my guitar,” he says. “That’s how I write, that’s how I got started, but it’s a part of me fans rarely see anymore as I’m always touring with my band.”
Beyond Medrano, Rappi is already planning ahead and is close to finalizing contracts with 19 other performers, including musical acts, YouTubers and influencers. The company now has a team devoted to livestreams and has partnered with booking agencies to find the best talent.
“It’s ambitious, but it’s new and we’re learning and taking it step by step.”
Podcast: Closing the Latin American Data Gap with Human Verified SME Data
dataPlor’s CEO, Geoffrey Michener, was recently featured on the podcast series “Crossing Borders with Nathan Lustig.” Here, the two discuss the value high-quality, human-verified SME data brings to large enterprises doing business in Latin America.