Welcome to this week’s news round-up on the Brazilian innovation and technology ecosystem. Here are some of the main developments seen in Latin America’s largest economy during the week ending January, 17, 2020:
The Green Hub eyes foreign cannabis firms
Brazil’s first cannabis accelerator The Green Hub wants to act as a gateway for foreign firms interested in exploring opportunities in the country. The São Paulo and Rio-based firm wants to encourage foreign startups to take part in its first acceleration program, which will select 10 companies by March, and also expand consulting services for international firms.
The company is looking to capitalize on the recent developments in Brazil that could unleash the local potential for cannabis firms: last month, local pharmaceutical regulator Anvisa on Tuesday approved regulations for the roll-out of medicinal cannabis-based products.
According to TGH’s partner and head of innovation, Alex Lucena, this year is crucial for the development of the local industry: “2020 is not the year of [cannabis] startups in Brazil, but the year of building the sector itself,” he points out.
Considering all the various education and regulatory challenges involved and the need to foster the creation of more businesses, Lucena expects it will take about three years until Brazil-based cannabis startups start making serious money. “Those who invest right mow will have the first-mover advantage,” he argues.
EBANX launches consumer-focused offering
Curitiba-based fintech EBANX has launched a consumer-focused offering this week in a bid to diversify its product portfolio beyond cross-border online payments. One of the latest Brazilian startups to earn unicorn status after a funding round last October, it launched EBANX GO, a digital wallet in partnership with Visa and local banking-as-a-service provider Dock.
A trial is being carried out with 10,000 Brazilian consumers and the product is expected to fully launch in the second half of 2020. The announcement is the first B2C foray for the company, whose main business is to bridge the transactional gap between international businesses and consumers. The startup founded by Alphonse Voigt, João del Valle and Wagner Ruiz in 2012 processes payments for a number of international companies including the likes of Spotify, Airbnb and Uber across Latin America.
In Loco sharpens focus on US IoT market
Geo-tracking technology and marketing startup In Loco is ramping up its efforts in the US as the next step of the startup’s growth plans. Headquartered in Recife, in he northeast of Brazil, In Loco also has offices in San Francisco and New York. Its proprietary authentication and engagement technology for Internet of Things developers collects and processes anonymized behavioral and contextual data about smartphone users. The data is then used as a tool to enable more relevant and secure interactions between consumers and businesses using the technology, which includes most of Brazil’s largest banks.
The increased focus on the United States, which involves the relocation of In Loco’s founder, André Ferraz, is due to the country’s maturity when it comes to IoT and is also part of plan to boost the startup’s market value by increasing the international client portfolio.
Sage to sell Brazilian operations
UK software company Sage will sell its Brazil business as the country is not considered a strategic market. The reason, according to the firm’s report for fiscal 2019, is that Latin America, for the most part, sells products that have no path to its main product, Sage Business Cloud. The company, which sells enterprise resource planning systems for mid market firms, wants to finalize the sale before September 2020.
Locaweb readies IPO
Digital services firm Locaweb wants to raise up to 1 billion reais ($240 million) in its upcoming initial public offering, according to a securities filing submitted this week. Founded in 1998, the Brazilian company provides web and cloud hosting services and has a portfolio of over 300,000 clients. Some 33.3 million new shares are expected to be sold in the IPO next month and the proceeds sold for acquisitions and to reduce debt. Locaweb reported 315 million reais ($76 million) in revenue and net income of 11 million reais ($2.6 million) for the first nine months of 2019.
Agrofy gets new capital to grow local operations
Agribusiness marketplace Agrofy has raised a Series B round of $23million, led by Brazilian investors SP Ventures and Brasil Agro, as well as Silicon Valley backers Fall Line Capital and Acre Capital. Agrofy’s platform offers more than 55,000 products and services for rural producers. The new cash will go mainly towards boosting the company’s Brazilian operations.
HRtech Kenoby to boost AI development with new round
HR tech Kenoby has raised a Series A round of 20 million reais ($4.8 million) led by local venture capital firm Astella. With the new round, the company wants to further improve its recruitment automation platform with artificial intelligence-based features. Since its foundation in 2015, Kenoby has built a portfolio of 450 clients such as McDonald’s and Renault-Mitsubishi-Nissan. It claims to process over 2 million job applications through its platform and deliver a 50% reduction in costs associated to recruitment.