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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