Brazil's Acesso Digital Secures 107.25 million in Funding

U.S. private equity firm General Atlantic LLC and Japan's SoftBank Group Corp 9984.T are leading a 580 million reais ($107.25 million) funding round in Brazilian facial biometrics and digital admission company Acesso Digital, it said in a statement on Monday.Both General Atlantic and SoftBank will hold a minority stake in Acesso Digital after the investment.

Founded in 2007, Acesso Digital announced its first funding round in January, when it raised 40 million reais with Igah Venture, formerly e.Bricks Ventures.

Acesso Digital founder and CEO Diego Martins said in an interview that demand for the companies’ services has doubled since the beginning of the pandemic, as use of contactless identification has surged in an attempt to contain the spread of the novel coronavirus.

Martins said the company will use the proceeds of the funding round to expand the business, including via acquisitions.

Source. Reuters, Sept 21, 2020 

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Brazilian digital freight broker Cargo X raises $80 million

Brazilian digital freight marketplace Cargo X announced that it raised $80 million in Series E investment. This was Cargo X’s fifth investment round, which was led by LGT Lightstone Latin America, with participation from Goldman Sachs Growth Equity, Valor Capital and Farallon Capital among others. This funding round brings the total investment in Cargo X to $176 million.

Frequently called the “Uber of Brazilian trucking,” Cargo X is revolutionizing the Brazilian freight industry, which suffers from fragmentation and visibility issues like in the U.S., but on a larger scale. A substantial part of the Brazilian trucking processes is still dependent on paper-based documents and communication over fax, phone and email. 

Cargo X looks to sort this out, connecting carriers and shippers over a digital platform. The largest digital brokerage in Brazil, Cargo X employs 400 people and connects about 20,000 carriers and their 400,000 truckers with freight. It also offers financial services and a technology edge that keeps the company competitive in the market. 

“Cargo X is implementing an innovative business model and bringing disruptive technology to a segment that has not been digitized yet. With that, it makes the productivity of the road logistics sector in the country increase in a sustainable way, reducing idle capacity in the truck fleets, increasing the income of drivers and decreasing freight costs for shippers and transporters,” Federico Vega, the CEO of Cargo X, told FreightWaves.

The current COVID-19 pandemic has also necessitated enabling touchless operations within supply chains. Vega explained that Cargo X is positioned to offer digitalization and reduce physical interaction via process automation.

“In addition to helping our partner carriers when they need us the most, the new investment will be focused on continuing to develop cutting-edge technologies that allow them to operate 100% online and pave the future of road freight transportation,” said Vega. 

Cargo X has shown enviable 20% month-on-month growth in 2020, even amidst the COVID-19 pandemic outbreak. Vega mentioned that customer feedback has also been positive, with the net promoter score (NPS) standing at 62% for carriers and 57% for shippers. 

The Brazilian freight startup ecosystem has challenges with raising venture capital to execute business – an issue that Cargo X seems to have solved with its Series E round. Vega called LGT Lightstone – the lead investor in the round – one of the most exclusive and select investors in the world, and that it was “strongly aligned” with Cargo X’s goals and values.

For LGT Lightstone, Cargo X was a relevant investment as it satisfied the objectives of the fund in the Latin American region – having high growth and impact with differentiated technological solutions. 

“We believe that this new partnership will help to accelerate Cargo X even more and consolidate the company’s leadership in the sector, particularly at such an important time for the country,” said Gustavo Verdelli, the managing director of LGT Lightstone, on the reasons for the investment.

Source. Techcrunch, Vishnu Rajamanickam, April 9, 2020

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Brazil’s RD Station Nets $50M In Series D Funding To Scale SaaS With SMBs

Brazilian digital marketing startup RD Station has raised a $50 million Series D led by Silicon Valley-based Riverwood Capital.

RD Station, which is focused on SMBs in emerging markets, claims the round marks the largest funding round raised by a Latin American company in the SaaS (software-as-a-service) space.

TPG Growth, DGF Investimentos, RedPoint Eventures, Astella Investimentos, and Endeavor Catalyst also participated in the round. The new financing brings RD Station’s total venture raised to about $90 million, according to CEO and co-founder Eric Santos. It last round was a $19.2 million Series C led by TPG Growth in 2016.

Founded in 2011, RD Station has more than 700 employees (compared to about 500-550 people at this time last year) and 13,000 customers in 20 countries. Its headquarters (and the majority of its staff) are in Florianópolis, located in the southern part of Brazil, but the company also has offices in Sao Paulo, Bogota, Mexico City, and San Francisco.

“Most SaaS companies in the world ignore the SMBs, especially in emerging markets, due to difficulties with economics,” Santos said. RD Station has worked to be able to provide an AI and machine learning-driven solution that is “affordable” for smaller businesses yet can still help them “grow in a predictable and sustainable manner.”

While the company declined to disclose its annual recurring revenue (ARR), Santos said it has “basically grown [its ARR] by triple digits on average year-over-year in the last four years,” with the exception of last year.

“Of course as you grow, it gets harder to produce triple digit increases,” Santos points out.

In a phone conversation today, Santos told me that the company plans to use the money in part to continue its expansion in Colombia and Mexico. It also plans to invest in R&D to improve its product and naturally, as do most just-funded companies, grow its headcount. Last year, the company acquired another startup, Plug CRM, so that it could incorporate a CRM product into its platform. The startup now has two products: RD Station Marketing and RD Station CRM. It also works with about 100 other SaaS companies which integrate RD Station’s product, Santos said.

“Over the years we have become the leading marketing automation vendor in Brazil by far,” Santos said. “And we believe that we have a very differentiated competitive advantage in a market like Brazil want to replicate that in other emerging markets.”

It seems that investors like what they see.

In a press release, Joaquim Lima, the Sao Paulo-based managing director of Riverwood Capital, said his firm believes RD Station “has enormous growth potential” both in Brazil and globally.

The deal is the latest in a number of Latin American-focused investments for Riverwood Capital.  In April, we covered the news that the firm was the sole investor in a $20 million Series B raised by another Brazilian SaaS and SMB-focused startup, Omie. It’s also previously backed Brazilian ride-sharing startup 99 and Mandic, among others.

Latin America, as a whole, is increasingly attracting global investors. This deal is just the latest example of a growing trend in the global VC market. Just last month, Silicon Valley venture firm TCV confirmed it led a $400 million round for Brazilian fintech startup Nubank, marking that firm’s first “significant” investment in Latin America.

Brazil is by far the largest recipient of funding in the region, according to LAVCA, the Association for Private Capital Investment in Latin America, which found that venture funding in the country exploded in 2018 to $1.3 billion, representing nearly two-thirds of all venture money raised in Latin America as a whole last year. That was 52 percent more than the $859 million invested in 2017, and a staggering 369 percent increase from the $279 million raised in 2016.

Source. Crunchbase News, Mary Ann Azevedo, August 16, 2019

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