Newtopia Argentina VC — From left to right: Pablo Lafosse, Patricio Jutard, Mariano Mayer, Sacha Spitz, and Jorge Aguado: Newtopia VC founders. Photo: Courtesy

Go big or go home: the Argentinian lesson that Newtopia VC wants to teach Latin American startups

The new venture recently announced a $ 50 million fund; co-founder Sacha Spitz tells LABS how entrepreneurs can overcome the economic and social obstacles that arise in the region

Tiago Alcantara

12.Oct.2021 15:55 BRT
UPDATED 18.Oct.2021 12:03 BRT

Ler em português Leer en español

Building a successful startup in Argentina is tricky. With a $ 383.1 billion gross domestic product (GDP), the country is Latin America‘s third-largest economy. However, Argentine entrepreneurs don’t have a substantial domestic market where startups can scale before expanding, as Mexican and Brazilian startups do.

In Argentina, entrepreneurs have to conceive their projects with at least a regional goal in mind to seek scale. Founded by some key players in the Argentinian ecosystem, Newtopia VC aims to help startups in the initial stages grow globally.

In August, the VC announced its first fund of $50 million to support innovative tech-based startups in LatAm. Through capital investment and a hands-on mentorship approach, Newtopia VC plans to “grow the community of entrepreneurs, and to share knowledge and experiences on how to overcome the economic and social obstacles that arise in the region, on the way to scaling up regionally and globally,” the co-founder of Newtopia, Sacha Spitz, tells LABS.

Former director at the Universidad de San Andrés incubation program and partner at Yavu Ventures, Spitz explain Newtopia looks for startups at very early stages (pre-seed and seed) with tickets ranging from $100,000 to $500,000, and the possibility to make a follow-on on the Serie A up to $1 million.

“All the startups have to be tech-based and have a very innovative business model that can scale regionally and/or globally. In the last few years, [we see that] the region’s new tech companies are no longer only successful business models from Silicon Valley replicated in Latin America. Now we can find startups and ideas with innovative business models that are created and exported from Colombia, Brasil, Mexico, Argentina, Uruguay, and Chile to the world,” says Spitz.

Alongside Spitz, Newtopia VC is also led by Patricio Jutard (co-founder of Argentinean unicorn Mural), Mariano Mayer (former National Secretary for Entrepreneurs and SMEs in Argentina and founder of Marea Venture Partners), Jorge Aguado (former National SciTech & Innovation Secretary in Argentina) and Juan Pablo Lafosse (founder and former CEO of Almondo).

Furthermore, Newtopia VC has a community of over 70 top-tier founders as investors, advisors, and venture partners, who will mentor the portfolio companies to achieve their business goals. Marcos Galperin (founder of Mercado Libre) is one of them.

LABS — What are the main challenges for finding promising startups in Argentina and Latin America?

Sacha Spitz — There is a revolution of amazing talent in the whole region, and talent is capable of transcending the situation and challenges of each country. In this sense, the purpose we have at Newtopia VC is to grow the community of entrepreneurs, share knowledge and experiences on how to overcome the economic and social obstacles that arise in the region, and scale up regionally and globally.

Brazil and Mexico are slightly different from the rest of Latin America because of their huge domestic markets, where startups can scale before expanding to other countries. This is not the case in Argentina, where entrepreneurs conceive their projects with a regional goal in mind in order to seek scale. This situation is similar to what is happening in Israel, the clearest case in the world of how talent is making its way globally, by leveraging more on innovation and transformation potential than on the specific possibilities of its own market.

LABS — Latin American startups tend to innovate around inefficiencies and social issues. From a VC point of view, how important is it for startups to have a social impact?

Sacha Spitz — This is a fundamental aspect of our search; the first question that we always ask ourselves when we look at a startup is how it is making the world better? We focus on startups that are born with a purpose and with a sense of triple impact, projects with the ability to generate scale in a short time and promote better working conditions, education, health, security, among others. We help entrepreneurs to build admired companies with a long-term vision that can change the paradigms of their industries. We promote companies with a social and/or environmental commitment and purpose. That is the great power of the knowledge economy: it is not only a vertical in itself, but it positively impacts the rest of the sectors by helping them in their digital transformation. According to the report Tecnolatinas 2021, prepared by the IDB, startups in the region have created $ 221 billion in value, have raised more than $ 28 billion in capital, and have 245,000 employees.

LABS — Recently, ESG has become a significant thesis for investors. Do you have any ESG policies? Or look for it before investing in startups?

Sacha Spitz — We believe that investors, startups, and customers are aligned in the quest to create companies with strong purposes. We care about what type of companies we are investing in. There is still a lot to work on in the ESG field both in the region and around the world; from our side, we want to help by providing startups with the necessary tools and methods to establish KPI’s and the respective impact measurement.

LABS — Mercado Libre and Despegar are probably the most famous Argentinian companies in Brazil. Any guess in other startups expanding to this market that we should keep an eye out for?

Sacha Spitz — Sure, there are many startups in that direction; Nuvemshop (Tiendanube) is another Argentinian startup with very successful implementation in Brazil. Newtopia has already invested in Choiz (Health) and Wibson (ePrivacy), startups from Argentina, that have raised a round and launched their business in Brazil.

On the other hand, clearly, the fintech sector is going through a spectacular moment, integrating technological expertise with an increasingly broad look towards financial services, microlending, crypto assets, and decentralized finance. Likewise, agtech and health are other sectors undergoing a revolution, with very important projects impacting wellness, food, and care for the planet.