Photo: Courtesy/NotCo

NotCo: Chile's first or second unicorn?

NotCo itself claims to be the first genuinely Chilean company to reach unicorn status through private funding rounds

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Jeff Bezos-backed food-tech firm NotCo raised $235 million on its Series D round, it announced on Monday. The fundraising valued the Chilean plant-based startup at $1.5 billion, making it the newest Latin America‘s unicorn, and possibly first one in Chile, considering that NotCo is the first startup in the country to meet the criteria for boasting such status.

“It is a privately-held, tech-focused, startup, with a valuation above $1 billion,” KASZEK‘s co-founder Hernan Kazah stressed to LABS. The LatAm-based investment firm has NotCo on its portfolio. 

READ ALSO: Chile’s Bezos-backed NotCo raises $235 million round and is the new Latin America’s unicorn

NotCo itself claims to be the first Chilean company to raise such an amount through financing rounds. Even though Orca Bio, a scientific startup, has hit that unicorn valuation range too, it is not Chile-based. Instead, it was founded by a Chilean entrepreneur in the U.S. – a similar story to that of Brex, a Brazilian-founded fintech in the United States. 

“So I wouldn’t consider Orca Bio a Chilean unicorn,” said Eduardo Fuentes, from the Brazilian innovation platform Distrito, which continuously collects information about startups.

However, Fuentes considers the on-demand grocery delivery startup Cornershop as Chile‘s first unicorn, taking into account the valuation achieved in its acquisition by Uber ($1.4 billion). The deal was announced in 2019, but took some time to be concluded since it relied on the approval of the authorities in all countries where the platform operates. 

READ ALSO: Design-driven e-commerce, Brazil’s Zee.Dog wants to expand globally and go far beyond the pet market

“Due to Uber‘s acquisition, Cornershop is a unicorn. It’s a similar case to that of Brazil‘s ride-hailing company 99, acquired by China’s Didi Chuxing. So NotCo would be the second Chilean unicorn,” he said.

Nevertheless, other investors argue that Cornershop is probably at the unicorn level by now, but its acquisition, held in three attempts, was conducted at lower valuations and that the company is not independent, so it’s not a unicorn – and therefore not Chile‘s first unicorn. 

READ ALSO: On the edge of becoming Latin America’s new unicorn, NotCo takes baby steps in the U.S. plant-based market

More than 20 unicorns in Latin America and counting

Between last year and 2021, the volume of investments skyrocketed in the region, reaching an all-time high. 

Reports from LAVCA (Association for Private Capital Investment in Latin America) and CB Insights show that companies in Latin America raised at least $6 billion in venture capital investments in the first half of 2021. 

READ ALSO: Foodtech NotCo presents plant-based ground beef in Chile

In between, Brazil added new unicorns in 2021’s first half: Madeira Madeira, the first of the year, Hotmart, which is now preparing for IPO, and Mercado Bitcoin, valued at $2.1 billion, the first crypto unicorn in Brazil and the eighth-most valuable unicorn in Latin America

“If we have one more unicorn in Brazil this year, we will already equal the number of unicorns created in 2019, the largest to date,” recalled Tiago Avila, from Distrito.

Mexico recently gained its first three unicorns (Clip, Kavak, and Bitso), and Uruguay’s dLocal achieved the same status in late 2020, and then did an IPO that gave the payments firm a market capitalization of $9 billion. Argentina‘s MURAL joined the $1 billion club last week. So far, Latin America has more than 20 unicorns.

READ ALSO: Bezos-backed NotCo receives funding from Shake Shack founder Danny Meyer’s fund

Paulo Passoni, SoftBank‘s growth equity investor in Latin America, posted on LinkedIn that through his rough estimates, the venture capital and growth equity sector will be responsible for more than $10 billion of foreign direct investment in Brazil in 2021. That is approximately 20% of the total FDI in Latin America‘s largest economy, according to him. 

“I bet that in two years we could reach almost 50% of FDI into Brazil,” he said, adding that he didn’t even count primary capital raised in IPOs of Latin America‘s tech companies.