This is the third fund launched by the firm investing in Latin American startups that seek to solve the region’s main problems. Its first investments are in the fintech and foodtech sectors, with origins in Argentina, the United States and Peru.
Alaya Capital is a Venture Capital fund manager that invests in Latin American entrepreneurial talent that seeks to transform the world through technology. In its ten-year track record, it has launched three funds and invested in 35 startups, including LATAM’s first social unicorn, Betterfly, a platform that delivers benefits and a Life Insurance that grows at no cost for Latino workers. Alaya Capital was their first investor.
This year they have launched their new fund, Alaya III, focused on startups that support the construction of a new economy. “The pandemic brought new challenges that added to the structural problems that the region already had, so in this new fund we are focusing on startups that seek to solve them through technology. We will invest tickets between five hundred thousand and two million dollars in startups that help the digital transformation of companies and the demands of the new digital consumer, which has accelerated its technological adoption in recent years,” said Luis Bermejo, Managing Partner of the firm.
In July they have reached a major milestone that will allow them to begin the investment process, betting on the first startups that fulfill this mission. They have closed the first stage of capital raising, meeting their expectations of reaching 40% of the target capital for this fund III. Among the investors that have joined this first milestone are major corporations such as Grupo Murchinson and Grupo Supervielle from Argentina and Grupo Kawen from Chile. Important Family Offices from the region and strategic individual investors such as Roberto Souviron, founder of Despegar.com and Hernán Crespo, former player of Argentina’s national soccer team, have also joined the fund.
With this first closing, the first investments were made that present innovations in sectors that need to be disrupted in the coming years. According to Lorena Suarez, Managing Partner of the firm and expert investor in fintech, the insertion of people, companies and financial institutions in decentralized finance is urgent to move towards a new economic model.
In this regard, one of Alaya Capital’s bets is Lemon, one of the fastest growing crypto startups in the fintech sector in the region. Its main product is a virtual wallet that integrates operations of the traditional financial system with cryptocurrencies and allows weekly crypto earnings to be obtained automatically with Lemon Earn. It also has its VISA Lemon Card, an international prepaid card that can be used at any merchant in the world and rewards users with cashbacks in Bitcoin for each purchase.
Its founders understood that the crypto world will be based on rewards and from there comes its great success in the market, allowing both merchants and users to dive into cryptocurrencies and web3 easily, in just three clicks and in a 100% secure way. From there they became the most downloaded application in the top chart of the App Store in Argentina, above WhatsApp or Instagram.
The second fintech is SixClovers, founded by former PayPal technology and business leaders Jim Nguyen and Nas Kavian, which developed a decentralized cross-border payments network that connects traditional and digital currencies. With their technology, they equip financial institutions, payment providers and merchants with a full-stack native blockchain payment infrastructure to move and transact in digital currencies securely and seamlessly around the world.
SixClovers is bridging the gap between traditional and decentralized finance, expanding access to the next generation of digital products and services. The payment network is based on Algorand, an advanced, carbon-neutral blockchain.
In the foodtech world Alaya Capital made its third investment with Megabite, a Peruvian startup that developed a multi-brand digital restaurant that operates 100% through digital channels. It is a new generation of data-driven restaurants, with premium food at affordable prices. They seek to solve a problem for the consumer and the industry itself. Today, restaurants do not use data to create their menus, optimize their operations and cook without taking into account customer tastes. Through Megabite, consumers can access high quality, customized (data-driven) offerings at affordable prices. Alaya’s investment also coincides with the launch of the Android App (available on Google Store) through which users will be able to place multi-brand orders, at lower prices and in a personalized way. Megabite thus becomes the only restaurant with its own technology development in Latin America and takes a big step towards its vision of becoming the “Spotify of Food delivery”.
“This sector is undergoing a drastic change in consumer habits that the pandemic has accelerated, and it needs to incorporate technology and completely transform a business where no major innovations have been made in previous decades,” says Claudio Barahona, the firm’s third Managing Partner.
At the same time, this fund does not ignore the fact that the major problems of the region must be solved in order to achieve a sustainable economy. “It has been proven that if a company respects the environment and the people who live in it, it adapts better to changes in the environment and finds better opportunities in it. On the contrary, if they are detrimental, their long-term risks are high and their profitability will decrease,” says Juan Manuel Giner, the third Managing Parter with a strong focus on impact and sustainability. “That is why in our third fund we prioritize investment in startups that have an impact on the United Nations Sustainable Development Goals and that are willing to have an outstanding performance in ESG best practices during the investment period”.
Opening of Mexico Office
In order to deepen its regional presence, the fund is opening a new office in Mexico under the leadership of one of its partners, Claudio Barahona. He says that Mexico is the second largest market targeted by startups, after Brazil, to consolidate their business models in the region. “A key support that we offer to our invested startups is to help them in their regionalization process, that is, to open operations in other Latin American countries. Ninety percent of our companies are looking to grow in Mexico, so a large part of the work of this new office will be to welcome them and help them expand. This regionalization methodology is something we have already done successfully in countries such as Chile, Colombia, Peru and Argentina, so now we are going to replicate it in Mexico”