LatAm ICT investment, financing watch

Brazilian hygiene retail giant Ypê invested 300mn reais (US$57.5mn) to increase automation at its distribution and logistics center in Amparo, São Paulo state, Eduardo Beira, Ypê’s head of engineering and maintenance, told BNamericas.

The logistics 4.0 project was commissioned to E80 Group, an Italian company specializing in technological warehouses.

Design began in 2018, Beira said. In 2019, Ypê closed the contract with E80 and civil works began in 2020. Delayed by the pandemic, they were concluded on November 25.

"With this project, our [distribution center] was transformed into one of the most modern and most tech-based ones in Brazil and Latin America," said the executive. The revamped site has self-guided vehicles with sensors, robots to assemble pallets, voice command systems, among others.

According to Ribeiro, the center relies on physical (structured cabling) and logical (systems configuration) redundancy. It uses dedicated networks and Wi-Fi 5GHz for connectivity, but it does not have private networks. The site is also connected to two datacenters providing high availability, he said.

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The Brazilian government estimates investments of around 1.4bn reais in IT hardware and IT service purchases in 2023, according to public procurement processes scheduled by the economy ministry to take place in the first months of next year.

These values, first reported by Convergência Digital, do not represent the totality of purchase processes for the year, however, since the bidding schedule tends to increase in the coming months. Furthermore, with the change of government on January 1, it is possible that this budget will be reviewed.

The data refers exclusively to the purchasing process handled by the economy ministry.

According to the data available in the system, four major purchases are scheduled: the acquisition of desktops and laptops, outsourcing of printing services, cloud orchestration, and “as-a-service” equipment acquisitions, that is, leasing.

The purchase of PCs is estimated at 487mn reais, while desktops and laptops are estimated at 243mn reais. Further 530mn reais are estimated for cloud services and printing outsourcing at 178mn reais.

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Mexico has become the second largest exporter of IT services in Latin America in 2022, after Brazil, with an estimated value of 34bn pesos (US$1.75bn), representing 18.4% annual growth, according to IDC.

The IT services market in Mexico is forecast to reach more than 177bn pesos by 2023. Exports are due to represent 29% of the total value of IT services, up from 19% in 2018.

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Mexican microcredit platform Baubap received a US$20mn debt-financing loan from Park Cities Asset Management to expand its products and increase the amount of loans in the next 12 months.

Founded in 2019, Baubap offers microloans ranging from 500 to 5,000 pesos through a mobile app. 

The company claims to use alternative data and AI to monitor repayments.

Baubap has provided loans to 500,000 people in Mexico and expects to exceed 1.5mn in 2023. The fintech reported that income and portfolio volume grew sevenfold this year.

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The slowdown in fundraising, weak stock performance of companies that went public and the tougher macroreconomic environment will likely lead to postponement of most Latin American fintech’s planned IPOs.

That’s according to The LatAm Tech Report, issued by regional startup community hub and projects development platform Latitud.

Although several deals went through, fintech fundraising in Latin America fell by 29% on an annual basis in the first half of 2022, according to the report.

"With rising inflation and interest rates, consumer fintech was one of the hardest hit verticals in the fundraising landscape," Latitud wrote. 

The report, which can be seen here, also alluded to Brazilian digital bank Nubank, which last year debuted on the stock exchange and has since lost almost 60% of an initial market value of US$52bn, according to Refinitiv data.

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Peru’s Talently, a startup dedicated to training and connecting Latin American technology talent with international companies, received US$750,000 in financing from the IDB.

According to the multilateral, proceeds will be used to enhance the platform, increase access and participation of women in the technological field, promote technology development in Central America, and launch a product to accelerate the hiring of Latin American technological talent in the US.

Talently focuses on computer programmers with at least two years of work experience and technology contractors. 

The startup is also looking to expand to Argentina, Costa Rica, Ecuador, El Salvador, Guatemala and Honduras, as well as to consolidate in Colombia, Mexico and Peru. 

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Algar Telecom launched a call for its open innovation program, Brain Open, for co-development of solutions with startups.

The goal of this call is to select startups developing solutions based on 5G technology on three main fronts: industry 4.0, operational efficiency and B2B solutions. 

Startups that are at least in the traction phase, with active clients and solutions, are eligible to participate. 

Registration is open until December 7 via https://innovationlatam.com/ch/algar.