Latin American Startups have Become Top-Shelf Targets for Global Companies
Latin American Startups have Become Top-Shelf Targets for Global Companies
Exit momentum has finally taken off in Latin America. Global companies are making valuable acquisitions in the region, and you don’t have to look hard to see why. Latin America has always possessed the right mixture of talent and drive to foster entrepreneurship, and in recent years it has become a key region for global companies to keep their eyes on — especially in the areas of mobile, social, and advertising technologies.
Over the past few years, we’ve seen a sharp rise in the number of international companies acquiring Latin American startups — such as StudentUniverse acquiring Colombian WeHostels, Eventbrite acquiring Argentine Eventioz, and DeliveryHeroacquiring Uruguayan PedidosYa. And whether these global companies are more interested in acquiring the technologies behind these products or using the acquisitions as a strategic entrance into the region, these deals are evidence of the talent and skills that Latin American entrepreneurs possess.
All in all, we’ve seen over a dozen companies acquired by companies abroad since 2013 — a major testimony to how the Latin American startup scene is advancing. Here’s a deeper look at just a few of the standout deals.
Aventones acquired by BlaBlaCar
City-to-city ridesharing has become increasingly popular across the globe and BlaBlaCar, the world’s largest ridesharing community, is Europe’s latest unicorn after raising another $200M to place the company’s value above $1 billion for the first time.
With a presence in 22 countries and now serving over 25 million verified members, BlaBlaCar has spent the last few years scooping up rival European startups in pursuit of dominating the European ridesharing marketplace. And it now has its sights set on Latin America with its first acquisition of the Mexican ridesharing startup, Aventones.
In just four years, Aventones was able to position itself as the most successful ridesharing platform in Mexico after discovering its key potential with its spin-off, Rides, a peer-to-peer long-distance ridesharing platform. The startup then introduced the service to other Latin American countries, including Argentina, Chile, and Colombia, and quickly positioned itself as the leading ridesharing platform in the region.
BlaBlaCar’s acquisition of Aventones permits the company to dive rapidly into Latin America with a team that has already established impressive growth traction in the region. The agile, scalable approach of both companies makes BlaBlaCar’s foray into Latin America that much easier, as the two complement each other so well. BlaBlaCar has not revealed the amount they paid for Aventones or any of the other six startups they’ve acquired. However, Aventones raised nearly half a million dollars before the deal.
Scup Acquired by Sprinklr
Founded in 2009 in Sao Paulo by Brazilian entrepreneur Daniel S. Heise, Scup, pronounced “scoop”, quickly became the most used social network monitoring tool in Brazil. Not only was Scup the first Brazilian social media platform certified by Twitter, but it also snagged hundreds of the largest brands in the country as clients. An estimated 35,000+ professionals use the platform to monitor, analyze, and publish social media content, making it the perfect target to be “scooped up” by New-York based marketing startup, Sprinklr.
This acquisition wasn’t the first time Sprinklr seized the opportunity to expand globally by acquiring its peers. At one point in 2015, the social media platform had seven acquisitions in less than 18 months under its belt. Following a funding round of $46 million in March 2015, the company’s valuation cruised past $1 billion, facilitating its expansion goals. This deal with Scup allowed the company to broaden its presence in South America, specifically in Brazil, a region with one of the most active social media populations in the world.
Reports show that 92% of Brazilian Internet users are connected to social networks, and daily social media usage is an astounding 3.8 hours per day. These Internet users are also always connected — with 89% continually logged on to Facebook, 87% on WhatsApp, and 63% on Instagram. Still, local competition in this space is relatively low, creating exciting opportunities for foreign companies like Sprinklr to build a partnership with a startup that has knowledge of the local market and can contribute to the bigger picture.
Comenta TV acquired by Wayin
Starting in 2011, Argentine startup, Comenta TV, found success by offering television producers across the region (in Argentina, Brazil, Colombia, Mexico, Venezuela, and Peru) access to detailed Twitter data relating to their shows, and how to integrate tweets into their shows. Adding this social layer to live television broadcasts and events helped the startup raise close to half a million dollars and eventually get the attention of Denver-based social media intelligence platform, Wayin.
Wayin was launched by Sun Microsystems founder Scott McNeal, who was part of the wave of successful startups in early-to-mid 80s Silicon Valley, along with companies such as Apple and Oracle. So what attracted Wayin to this Buenos Aires-based micro startup team? Acquiring Comenta TV meant the company could now add television to its lineup of visual mediums. Connecting social media to the massive marketing reach of television is the goal of many media firms, making Comenta TV an incredibly valuable addition.
Terms of the deal were not disclosed, but there’s no doubt the acquisition of Comenta TV has helped Wayin leverage consumer-driven experiences and real-time social data to propel its understanding of how viewers engage with TV shows.
Sparkflow acquired by Undertone
Programmatic advertising is here to stay. According to a recent eMarketer report, programmatic buying is expected to climb to $20.41 billion, or 63% of U.S. digital display ad spend, by 2016. Advertisers and agencies are scrambling to get their hands on immersive, engaging ad formats provided by companies like Undertone.
The US-based programmatic ad network recently acquired Buenos Aires-based Sparkflow in June 2015, in a move to integrate data-driven creative capabilities into their overall tech stack. Sparkflow, operating for about a year before the acquisition, raised only a $50K seed round with a client base mostly in Latin America and Spain. However, the startup was able to quickly land global brands like Mercedes-Benz, Fiat, DirecTV, Samsung, and Nike as clients with its ability to run multi-country interactive, expandable, and social rich ads designed to work across devices.
Argentinean Sparkflow was just shy of a dozen employees at the time of the acquisition. Unlike the companies previously mentioned, this deal was more of a strategic one for Undertone, rather than a gateway into Latin America. The company saw Sparkflow as a natural fit and adding its assets would eventually lead to its own acquisition just a few months later.
In December 2015, Undertone was scooped up by Israeli performance marketing company, Perion, for a whopping $180 million cash. Perion has a track record of purchasing ad tech platforms, and while Undertone will continue to run as its own unit, both acquisitions mark an acceleration of consolidation in the ad tech space that is sure to carry on as the need for standout creative experiences continues to rise.