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May 31, 2019

Kobalt Music’s booming Latin business, Colony Capital launches $5B dollar Latin American fund, and more from the region…

Kobalt Music’s booming Latin business

A short four years ago, Kobalt’s Latin business didn’t exist. Today, however, the company has signed publishing agreements with some of the biggest names in Latin music, including artists such as Ozuna, Anuel AA, Karol G, Brytiago, Natti Natasha, Jesse & Joy, Prince Royce , and Ovy on the Drums.

Last year, Kobalt logged 29 of the top 100 performing titles on Billboard's year-end Hot Latin Songs chart, up from 12 titles they logged in 2017.So far this year, Kobalt is on pace to outperform themselves once again, already racking up 25 entries among the top 100 titles since the beginning of the chart year.

Photo courtesy of Billboard

A fundamental reason Kobalt has been able to grow so quickly into the Latin space lies in the fact that after a stagnant period of artist development in Latin music, the last two years have brought forth the fast rise of young acts who had never had publishing deals.

Kobalt founder and CEO Willard Ahdritz explained,

"Latin was just waiting to break out to a global audience with the help of streaming… I saw the market was underserved and the potential was enormous, so it was a no-brainer” (Billboard).

Colony Capital launches $5B dollar Latin American fund

Los Angeles-based Colony Capital has announced plans to invest $5 billion into Latin America in the coming years.

Led by Miguel Ángel Olea, this newly created fund plans to invest around half of its capital into Mexico, with the remaining funds to be spread out across the rest of the region. The investment period of the fund will last from two to three years.

“Investment-management firm Colony Capital Inc. said its newly acquired business in Latin America seeks to invest $5 billion in the region in coming years, much of it in Mexico” (Wall Street Journal).

In a statement, a company representative expressed,

“65 percent of the GDP of Latin American countries in the Pacific Alliance is represented by private consumption… The region is characterized by a growing middle class, with a demographic bonus, which represents 75 percent of the population by 2030” (El Financiero).

As a private-equity firm, Colony Capital’s primary interest typically ranges from late-stage ventures to real estate. However. it was made clear by company officials that the Latin American fund aims to invest in “small and medium businesses with little to no competition and growing industry potential” (Contxto).

The firm’s President and Director Thomas J. Barrack Jr explained that

“Regional industries, in particular within Mexico, make Latin America an ideal destination for foreign investment. Along those lines, Mexico is an attractive location for investors who see beyond political conjunctures or changes in the market”. (Contxto).

Latin America’s growing electric transportation fleets

Chile is continuing to make a concerted effort to reduce its emissions and air pollution moving forward with the adoption of 200 new electric buses this year and an expected 500 more to follow next year. The country aims to have a fully electric public transport system by 2040.

Chile currently has the largest fleet of electric buses in Latin America and the Caribbean. The country will host the UN Climate Change Conference COP25 in December.

Conference president and Chile’s Minister of Environment Carolina Schmidt explained the importance of shifting the country’s fleet toward electric:

“To decisively confront climate change, electromobility is critical. We are taking a leap towards a cleaner, more efficient and sustainable transport system.”

According to the UN Environment, Santiago may have 700 electric buses in its fleet by next year, but other Latin American countries are also working  to keep up with Chile.

Cali, Colombia will complete a fleet of 125 electric buses this year. In addition, Medellin, Colombia ordered 64 BYD electric buses earlier this year, and the world’s longest articulated bus was also introduced as bound for the country last month.

Guayaquil, Ecuador’s largest city, launched a fleet of 20 electric buses in March.

 Meanwhile, Costa Rica pledges to have an all-electric fleet of buses and taxis by 2050, as part of a national decarbonization plan.


“Other countries are also putting in place incentives for customers, like Peru, where a tax on electric vehicles was lifted in 2018” (Electrek).

Argentine unicorn Despegar acquired Viajes Falabella

Argentine unicorn Despegar acquired Viajes Falabella in a purchase worth US$27 million. This acquisition will help the online travel agency- commonly referred to as OTA- increase its off-line presence.

Since its founding, Viajes Falabella has made US$50 million in income: 65 percent of which came from tourism packages.

According to reports, Despegar will continue Falabella’s loyalty program called CMR Puntos to offer discounts and perks for clients with affiliated partners.

Despegar, founded in 1999 in Argentina, Despegar has become a comprehensive OTA based in Miami. Using the Despegar platform, clients can  book airfare, reserve hotels, car rentals, and more. This recent acquisition of Viajes Fallabela will allow clients from both companies to have access to more extensive travel and tourism products.

“The Argentine Council of Electronic Commerce (CACE) says that OTAs are the strongest forces in Latin America’s e-commerce market. According to CACE, this industry grows at an annual rate of 24%.” (Contxto)

Argentinean startup Auth0 achieves unicorn status, raising $103 million in recent Series E funding round

Auth0 has achieved a valuation of $1B after closing a $103M round led by Sapphire Ventures. The company is Argentina’s fifth unicorn company.

Since it was founded in 2013, the company has raised a total of $210M. Auth0 offers an Identity-as-a-Service (IDaaS) platform for web, mobile, and legal applications.

This investment will fund Auth0’s international expansion in its offices in  Bellevue, Buenos Aires, London, Sydney, and Tokyo. The company currently employs roughly 475 people and has 7000 corporate clients, which it hopes to double.

According to Matías Woloski, Auth0’s CTO and co-founder,

“Less than a year ago we raised $60M and we had a valuation of $500M, so since then we’ve doubled our value” (Lat Am List).
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Didi’s Latin American Expansion Invigorates Regional Competition with Uber, Brazilian Pension Reform “Has Markets Feeling Downright Celebratory”, Nubank surpasses 10 million Brazilian Clients, and more….

This week in LatAm: Chinese ride-hailing giant Didi Chuxing launched financial services in Brazil and Mexico, Brazilian markets boomed, and NuBank became Latin America’s biggest fintech company.

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