Category: Magma Portfolio

Magma Partners Q3 Update: 7 New Investments as Silicon Valley looks South

Q3 was headlined by 7 investments, including 2 follow ons into existing portfolio companies. We did our first investment in Brazil, deepened investments in Mexico and other regions in Latin America.

Latin American tech is on fire in 2019, headlined by Softbank’s continued disruption of the market, having invested in 16 deals in the past 16 weeks. This is pushing big funds like Goldman Sachs, Credit Suisse, Riverwood, Temasek, a16z, Sequoia and more to invest more quickly in order to get into deals.  You can read more about these headline deals in our new monthly series in TechCrunch, written by Magma’s Sophia Wood.

JT and Sophia celebrate Fiestas Patrias at our Santiago office.

New Investments

InEvent – Brazil/USA. CRM for Corporate Events. Our first investment in Brazil and is a SaaS with a Brazilian tech team targeting the US market.

MiPos – Ecuador/Mexico. Point of Sale system for restaurants in Latin America. With the proliferation of Rappi, Uber Eats, Domicilios, and other online ordering systems, restaurants have a tablet for each service. MiPos integrates it all.

Treble.ai – Colombia/USA. Mobile first customer service for ecommerce.

Marqii – US/Chile. SaaS for US-based restaurants to automatically update their menus and pricing on all online ordering websites.

Magma Events 2019

Lendit – Dec 4-5, Miami. The premier fintech conference in the US gets a Latin American edition. 

WeXchange – Nov 14-16, Asunción. The IDB is leading a conference for women entrepreneurs.

Pedro Pablo travels to Israel to meet entrepreneurs and investors 

Eugenio and Pedro share tacos in Mexico City.

Our Partner, Pedro Pablo, recently traveled to Tel Aviv to meet local stakeholders and get to know the thriving local ecosystem.

Nathan Lustig attends YCombinator Demo Day

Our Managing Partner, Nate, traveled to San Francisco last month to participate in YCombinator’s Summer 2019 Demo Day, where he met Latin American companies. Every year more Latin American startups participate in this prestigious program (16 this batch!). We have previously invested 10 YC companies, including in Ubits and BrainHi who also participated in previous batches. 

JT and Sophia were mentors at Village Capital’s Finance Forward program in Santiago

Sophia and JT represent Magma at Banco Bci’s Centro Nace.

Our Principals, JT and Sophia, were invited to act as mentors for fintech startups from across Latin America in a workshop on Investment Readiness for Village Capital’s first Finance Forward program. The program offers workshops in four Latin American cities, as well as opportunities for financing at the end of the program for the top startups. Sophia and JT met with several startups from Mexico, Brazil, Chile, and Colombia during the event to help them prepare to meet with investors.

OmniBnk opens office in Mexico

OmniBnk continues to be one of our top-performing companies, expanding into the Mexican market with our Venture Partner, Eugenio Perea, as Country Manager. They announced their expansion into the Colombian market in May 2019 and continued to grow in Q3 this year.

Magma Google Case Study + Ciara Middleton’s Lessons Learned

We published our case study on how we use Google Cloud to facilitate remote work at Magma Partners and how we collaborate with our startups across borders. We depend on GSuite for everything from investment documents to pitch decks and we cover all this work in the case study.

We also published an article written by our intern, Ciara Middleton, who joined us in June/July 2019 to help out the content team. She listened to over 20 podcast episodes and turned the lessons she learned into a blog post to help entrepreneurs learn from the experiences of others. Read more about Ciara’s tips here

Crossing Borders Podcast Highlights 

We had a very busy few months on the podcast – thanks to Angel and Josefina for working so hard on making this program possible. Here were a few of the guests we had this quarter:

New Articles on Nathan Lustig’s Blog

We published a few more deep dives on Latin American industries and trends this quarter. 

If you want to get in touch with Magma Partners, you can reach us here. Thanks for reading!

Magma Values and Mental Models: How We Think About Successful Startups

When we invest in a startup, we’re in it for the long haul. It’s seven years on average, but we’re hoping to create lifelong relationships with the people we support, even if the startup that we’re supporting you on does not work out.

One of the biggest predictors of success that we’ve seen so far is working with founders that share our values. When evaluating an investment, we spend time sharing our values and listening to the values that the founders and their team bring to the table.

We’ve decided to share our core values, along with some of the mental models that we and the best entrepreneurs in our portfolio have used to be successful. We didn’t come up with most of these, but these are the ones that have worked for us.

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Magma Manifesto: Latin America’s Inflection Point

Talent is evenly distributed, but opportunity isn’t. It’s a powerful idea that most Latin Americans innately know to be true.

From Patagonia to Mexico, Colombia to Brazil, we see talented, hardworking, people who haven’t been able to make the most of their talents because of poorly run education systems, under investment and low social mobility.

We can blame governments, corruption, elites, colonization, foreign interference. All deserve some blame.

But smartphones and access to the internet changed everything.

Today, almost everyone can access all the world’s knowledge right from their pocket. We can learn whatever we want without asking gatekeepers for permission. We can change the course of our lives.

That’s not to say it’s easy. There are still massive structural problems that deny millions access to opportunity, but technology – and those who build it – are helping millions more access opportunities to better their lives. And that of their children.

Technology’s created Latin American inflection point. As we’re more connected than ever, Latin Americans is taking a huge step forward and start to make up for lost time.

That huge step starts with you. Whether you’re an entrepreneur, working at a startup or using the internet to make you and your community better, we’re excited to join you in helping make Latin America a better place.

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Q&A with Daniel Bilbao: The Truora Story

Latin America is a hotbed for identity fraud with around one-quarter of all digital accounts rejected due to fraudulent identities. Daniel Bilbao created Truora to combat this problem by providing businesses with immediate background check software; traditional background checks in Latin America take up to three weeks. While this status quo is suitable for large businesses, startups and SMEs are suffering a bottleneck in hiring due to fear of fraud when it comes to recruiting.

Truora is working to solve the real problems faced by small businesses and startups of fraud and identity authentication in Latin America. Daniel explains what he has learned from starting and growing a company in the Latin American ecosystem and tips that have helped Truora to become the company it is today.

What is Truora?

Truora is an instant background check company that helps businesses with their recruitment and compliance processes. In less than 20 seconds, the Truora platform can access the criminal, legal, and vehicular records, as well as national and international governmental lists of any ID number.

Truora is the answer to the long and complicated background check process that is currently the norm in Latin America, which does not adequately serve the needs of small businesses and startups. Truora is modeled on the US startup, Checkr, as Daniel saw an opportunity in the Latin American market for a similar system that could reinvent the way businesses currently conduct requisite background checks.

How did Truora become the company it is now?

One of the most important aspects of building Truora was the ability to scale and grow rapidly. Daniel approached a few potential customers, such as Uber and Rappi, with the idea for Truora before even building the technology. He wanted to test if this technology could be the answer to a clear problem for these businesses. In this way, Truora was able to secure customers early, which gave them the resources necessary to start to build the product.

The Truora team steadily developed its background check API into an efficient platform that they then offered to businesses in Latin America. From Colombia, Truora has expanded operations into Chile, Mexico, Brazil, Peru, and Puerto Rico. Truora has four co-founders: Daniel Bilbao, Cesar Pino, Maite Muniz Telleria, and Bruno Cecatto.

What has been your experience working with Magma Partners?

The Truora team has worked closely with Magma Partners on various aspects of the company’s development. Daniel explains that the Magma team helped them with their content strategy and supported them as they worked around early issues with their technology and the Truora platform. He also mentions that the relationship with Magma Partners helped Truora to build connections in the Latin American startup ecosystem and has brought press opportunities for the company.

For Daniel, the personal relationship with Nathan Lustig has been particularly gratifying as both share a desire to see the Latin American ecosystem grow and thrive. They look beyond their individual businesses to the bigger picture of Latin America, always considering how to strengthen and build the ecosystem through their work.

Magma Partners invested in Truora’s Seed round in December of 2018 along with MAYA Capital, shortly before the startup was accepted into YCombinator.

What advice would you give to entrepreneurs looking to start a company in Latin America?

Daniel comments that it is hard to build a unicorn startup out of Colombia alone. Whether or not the company is aiming to grow to this size, Latin American entrepreneurs should always look to the whole region for scaling to bring in more investment and build a stronger company.

He also notes his impression that young entrepreneurs are increasingly unwilling to ask for help. Daniel has a personal network of successful founders and entrepreneurs who have acted as an important support system as he has learned to navigate the startup ecosystem. This network is an invaluable resource as the group has been able to mutually feed off one other in learning from their successes and failures in the market. His advice to other entrepreneurs is to surround themselves with other smarter and potentially more successful entrepreneurs from whom to learn and take encouragement.

What is the most important lesson you have learned through your experience with Truora?

As a company with four co-founders, Daniel explains that the team had to learn how to work around conflicts with the other founders when it came to decision-making. Even in a smaller team of two founders, there are likely to be differences in opinion on sensitive aspects of the business, such as choosing investors, hiring employees, and equity splits. Daniel believes that in taking the time to establish strong working relationships Troura is able to manage these disagreements in a professional and healthy way. By purposefully building good relationships based on trust and respect, Truora has created a strong executive team.

Truora was born as a solution to an urgent issue causing bottlenecks in hiring in Latin American businesses. Daniel states that as a developing market, Latin America has not yet developed smart solutions for the new problems posed by the increasing use of technology in the region. For this reason, the Latin American market has many great opportunities for startups that are looking to solve these problems. He has learned that focusing on local issues is a sure way to find a business idea that could be truly successful.

What is next for Truora?

In the coming year, Truora is looking to continue to develop and consolidate the platform’s technology and product quality. They also have plans to launch a new product as they expand Truora throughout Latin America.

Q&A with Marta Forero: The UBits Story

Described as the ‘Netflix for corporate training’, the e-learning platform UBits has enabled more than 80,000 individuals at 70 companies across the region to develop their business skills through online courses in management, marketing, customer services, and much more.

Marta Forero, the co-founder of UBits, was the only Latina woman in her YCombinator cohort. Her success in the Latin American startup ecosystem and the YCombinator accelerator program shows how she continues to break barriers for women in the Latin American tech industry. She explains some of the lessons she has learned from her experience starting a company and what it is like being a female founder in Latin America.

What is UBits?

Ubits is a Colombian corporate learning platform that provides online business courses, called ‘Bits’, for large corporations in Latin America, including classes on marketing strategies, sales, and customer service. UBits currently has over 10,000 enrolled students and more than 200 e-courses available online. 

The courses are taught in Spanish across Colombia, Peru, and Mexico, and UBits is now the largest online business learning platform in Latin America.

How did UBits become the company it is now?

Marta and her co-founder Julián Melo share a passion for education and have experience in business management and corporate strategy. They saw an opportunity in the market for a corporate training platform which would help large companies to train their employees in basic aspects of business. 

The company was founded in 2013 when the founders started building the platform and attracting businesses. They worked closely with a corporate bank to assess how to best develop the platform in regards to employee training needs. In 2018, UBits was accepted in  YCombinator and the platform has since grown significantly as more businesses adopt the e-courses.

What has been your experience working with Magma Partners?

Magma Partners invested in UBits in 2019 following a $2M Seed round led by Spectrum 28 and GE32 Capital. Together with this investment, the Magma funding helped UBits to further develop its technology and broaden the range of e-learning courses available.

Marta states that the quality of the UBits courses is one of the most important aspects of the company, and the Magma investment enabled Marta and Julián to build a highly-skilled tech team to help them achieve this goal. This team has improved and developed the technology to ensure the highest quality of e-learning for their customer businesses. 

Marta also mentions that Nathan Lustig, Managing Partner at Magma, helped them with advice and mentoring in certain aspects of early development. She says that he was always ready to help them out with any doubts or questions to ensure that they built the best version of UBits possible.

What is the most important lesson you have learned through your experience with UBits and as a female entrepreneur in Latin America?

Although perhaps a cliché, Marta expresses the need for women in business to believe in themselves and to break free of the barriers set before them in the startup ecosystem. She says that if you believe in yourself, you will be surprised by what you can achieve. 

Marta also expresses the importance of creating a community of like-minded people who will support and build each other up. She mentions how her own connections in the business world, especially the relationships with other female founders, have helped her overcome problems and have made her more successful through mutual learning and support.

What advice would you give to entrepreneurs looking to start their own company?

For Marta, the most important piece of advice is to work hard and believe in the process. Although it may take time, with hard work and dedication the results will soon start to show. She also says that one does not have to have a lot of experience to become a successful entrepreneur, merely a willingness to work for a dream and a belief in oneself. If there is drive and passion, Marta believes that anyone can create a successful business.

What is next for UBits?

UBits is constantly seeking to expand its reach across Latin America to more countries and businesses. As they consolidate their presence in Colombia, Mexico, and Peru, UBits is now looking for a way into the Chilean market. Ubits is also looking to raise another funding round towards the end of the year.

Magma Invests in Colombia Startup Vozy

Vozy is a voice communication platform that helps businesses provide more efficient customer service through their AI voice services. Vozy’s virtual assistant, Lili, is capable of understanding and communicating in 8 different regional accents.

The Colombian startup is on a mission to give businesses the ability to automate communication by creating personalized customer experiences at scale with a human touch. Businesses can communicate with their customers the way they want, when they want, and on any device.

Vozy was founded in 2016 in Medellín, Colombia by Humberto Pertuz, and currently has its headquarters in Miami. It operates in more than 15 countries, including Mexico, Chile, Peru, Panama, Argentina, Colombia, and the US.

The Colombian startup has raised a total of $460K over three investment rounds including investors Parallel18, Troopa, and most recently, Magma Partners. 

Vozy is the first company to bring neuronal text-to-speech services in Spanish to Latin America. It has over 200 customers including companies like MAPFRE, Adecco, and Scotiabank. 

Magma Partners’ Q1 2019 Update

The Magma Team together in the office in February 2018.

After an active 2018, we’ve continued to push forward in 2019. Since our last update, we’ve invested in 4 new companies from four different countries, including Base Operations. We’ve also continued to expand our team and the services that we’re helping to provide in the Latin American ecosystem.

We now support 51 companies in our portfolio, which now sell $29M+ each year, have raised $46M in follow-on funding, and employ more than 600 people worldwide. Our growing team provides diverse experiences and networks to our portfolio, including support in marketing, PR, DevOps, sales, and international expansion strategies and covers geographies like Chile, USA, Mexico, Colombia and China. We’re excited to further support the startups in our portfolio as they continue grow!

Check out the following overview of news from our fund and our portfolio for Q1 2019.

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Magma Partners: Our 2018

2018 was an expansion year for Magma Partners. We started on a high note, closing our Fund II with backing from LPs in Chile, Colombia, Argentina, China and the US in January. We’re part of the movement that made 2018 the year people started to take Latin American tech seriously.

We added amazing people to our team across Latin America, China and the US, bringing us to seven full time and 10 part time team members. We have people on the ground in San Francisco, NYC, Austin, Beijing, Mexico, Chile, Colombia and Peru. Francisco supports Magma teams with Latin American connections, providing a link to top Latin American businesses that can make companies.

JT, Pedro, Sophia, Alejandra, Angel have been amazing additions to the full time team and are helping us build the support system for the entrepreneurs we’ve been lucky enough to be able to support. Pedro, Paolo, Eugenio, Codie, Neil and Pierre make up the amazing support team that allows us to have the reach we need. Our LPs in Latin America, China and the US are also a crucial support system, both in connections and advice, but also in follow on funding. Our LPs have invested and additional $5.5M into Magma portfolio companies this year, giving us the ability to help companies as they scale.

Angel Andraca, Sophia Wood, Pedro Pablo del Campo, Alejandra Dugarte, JT Li, Magma Team, Santiago, Chile

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Jooycar raises US$3M from HCS Capital

Jooycar is bringing the Usage-Based Insurance model to Latin America. Through a small device that plugs into your car, Jooycar has access to each vehicle’s usage metrics, which individuals and insurance companies can view through an app or on their online platform. Jooycar was founded by Maria Paz Gillet, Emilio Figueroa, and Mario Ungemach, a Chilean-Mexican team with years of startup and innovation experience under their belts.

Jooycar recently received US$3M in follow-on investment from HCS Capital, an investment fund based in Miami. Alex Horvitz and Luis Felipe San Martin, CEO and Managing Partner of HCS Capital, respectively, led the investment. We have invested in Jooycar twice as Magma since 2016 and are excited to add HCS as a coinvestor. Jooycar will use the investment from HCS to improve their platform and reach one million connected cars across Chile, Colombia, Peru, Brazil, and Mexico by 2021.

Jooycar is a perfect example of our investment thesis in action, as a startup that was founded in Chile that is now headed to the US. As a part of the investment, Jooycar will move its headquarters to the US to enter that market more smoothly. They have also added Rodrigo Labbe, ex Head of Marketing at DirecTV Chile, as new CEO, while Maria Paz will act as Chief Innovation Officer.

Maria Paz is a serial entrepreneur who started her career by building Chile’s first e-commerce platform. She went on to innovate within Cencosud, one of Chile’s largest retail brands, before leaving the company to found Jooycar. We have loved working with Maria Paz and watching her build Jooycar alongside her team. You can learn more about her story on Nathan Lustig’s podcast or in this article for Forbes about Jooycar.

Magma Partners invests in Chilean sports-streaming startup, Fanatiz

Fanatiz lets you keep up with Latin American football leagues from anywhere in the world. The service currently offers coverage of the Libertadores and Sudamericana Cups, and soccer leagues from Argentina, Brazil, Chile, Mexico, and Peru.

Founded in Chile in 2017, Fanatiz has its headquarters in Miami, while maintaining most of its operations in Chile. The startup also has offices in Spain and Argentina. We recently invested an undisclosed sum in Fanatiz to help the startup grow globally.

“We’re really excited to partner with Magma Partners as we continue our path of rapid growth and market expansion. With clients in over 100 countries, we place special value in Magma Partners’ vision and support for Latin American companies growing on the global stage,” said Fanatiz co-founder and CEO, Matias Rivera.

“Fanatiz embodies our commitment to helping Latin American startups tackle the US and international market,” said Managing Partner, Nathan Lustig.

The Fanatiz team was also selected by 500 Startups to participate in their Miami Growth program, alongside nine other startups from the US and Latin America.

After a little over one year in business, Fanatiz already has customers across the globe, including Pope Francis. The startup made the news last year when it provided the Pope with access to their app so he could follow his team, San Lorenzo, from the Vatican.

Expect to hear more about this dynamic startup in our quarterly updates!

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