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Waterfund, an investment and trading firm that specializes in acquiring and managing water-related infrastructure assets, today announced a deal with Israel-based crowdfunding platform OurCrowd that will see the Waterfund team commit $50 million to build a water- and agtech-focused portfolio of 15 companies. The first of these investments is in Plenty, a well-funded vertical farming startup.

In addition to these direct investments, the two companies are also working together on a new water-focused platform called Aquantos, which aims to issue so-called Blue Bonds and other financial products related to the water industry. Comparable to Green Bonds that focus on projects with environmental benefits — and which have been around for more than a decade now — Blue Bonds are still a new idea and focus on projects that could benefit the oceans.

“We are working to issue Blue Bonds that can be both climate bonds-certified and backed by sovereign or sub-sovereign borrowers,” said Waterfund CEO Scott Rickards. “This new financial tool and others are being designed to enable water projects in the Middle East to acquire leading technologies to address water scarcity in a fundamentally new way.”

Rickards argues that a lack of private capital has held back innovation in the water sector and that this new partnership — and the equity and debt financing opportunities it brings with it — will help change this.

OurCrowd, meanwhile, currently has about $1.5 billion in committed funding and has made investments in about 250 companies across its 25 funds. Among the companies the platform has invested in are the likes of Lemonade, Jump Bikes and Beyond Meat. Its portfolio also includes a number of existing agtech startups and last November, OurCrowd partnered with Sprout Agritech (a company in its portfolio) to run a new agtech accelerator in New Zealand.

“The Abraham Accords present a huge opportunity to bring new water and agricultural technology to the water scarcity challenges of the entire Middle East,” said OurCrowd founder and CEO Jon Medved. “Alongside Waterfund, it is our mission to invest in and help build game-changing technology companies. We are excited to be working together with Waterfund to drive more private capital to address the critical challenges of water.”

The COVID-19 pandemic has led to people everywhere shopping more online and Latin America is no exception.

São Paulo-based Nuvemshop has developed an e-commerce platform that aims to allow SMBs and merchants to connect more directly with their consumers. With more people in Latin America getting used to making purchases digitally, the company has experienced a major surge in business over the past year.

Demand for Nuvemshop’s offering was already heating up prior to the pandemic. But over the past 12 months, that demand has skyrocketed as more merchants have been seeking greater control over their brands.

Rather than selling their goods on existing marketplaces (such as Mercado Libre, the Brazilian equivalent of Amazon), many merchants and entrepreneurs are opting to start and grow their own online businesses, according to Nuvemshop co-founder and CEO Santiago Sosa.

“Most merchants have entered the internet by selling on marketplaces but we are hearing from newer generations of merchants and SMBs that they don’t want to be intermediated anymore,” he said. “They want to connect more directly with consumers and convey their own brand, image and voice.”

The proof is in the numbers.

Nuvemshop has seen the number of merchants on its platform surge to nearly 80,000 across Brazil, Argentina and Mexico compared to 20,000 at the start of 2020. These businesses range from direct-to-consumer (DTC) upstarts to larger brands such as PlayMobil, Billabong and Luigi Bosca. Virtually every KPI tripled in the company in 2020 as the world saw a massive transition to online, and Nuvemshop’s platform was home to 14 million transactions last year, according to Sosa.

“With us, businesses can find a more comprehensive ecosystem around payments, logistics, shipping and catalogue/inventory management,” he said.

Nuvemshop’s rapid growth caught the attention of Silicon Valley-based Accel. Having just raised $30 million in a Series C round in October and achieving profitability in 2020, the Nuvemshop team was not looking for more capital.

But Ethan Choi, a partner at Accel, said his firm saw in Nuvemshop the potential to be the market leader, or the “de facto” e-commerce platform, in Latin America.

“Accel has been investing in e-commerce for a very long time. It’s a very important area for us,” Choi said. “We saw what they were building and all their potential. So we pre-emptively asked them to let us invest.”

Today, Nuvemshop is announcing that it has closed on a $90 million Series D funding led by Accel. ThornTree Capital and returning backers Kaszek, Qualcomm Ventures and others also put money in the round, which brings Nuvemshop’s total funding raised since its 2011 inception to nearly $130 million. The company declined to reveal at what valuation this latest round was raised but it is notable that its Series D is triple the size of its Series C, raised just over six months prior. Sosa said only that there was a “substantial increase” in valuation since its Series C.

Nuvemshop is banking on the fact that the density of SMBs in Latin America is higher in most Latin American countries compared to the U.S. On top of that, the $85 billion e-commerce market in Latin America is growing rapidly with projections of it reaching $116.2 billion in 2023.

“In Brazil, it grew 40% last year but is still underpenetrated, representing less than 10% of retail sales. In Latin America as a whole, penetration is somewhere between 5 and 10%,” Sosa said.

Nuvemshop co-founder and CEO Santiago Sosa;
Image courtesy of Nuvemshop

Last year, the company transitioned from a closed product to a platform that is open to everyone from third parties, developers, agencies and other SaaS vendors. Through Nuvemshop’s APIs, all those third parties can connect their apps into Nuvemshop’s platform.

“Our platform becomes much more powerful, vendors are generating more revenue and merchants have more options,” Sosa told TechCrunch. “So everyone wins.” Currently, Nuvemshop has about 150 applications publishing on its ecosystem, which he projects will more than triple over the next 12 to 18 months.

As for comparisons to Shopify, Sosa said the company doesn’t necessarily make them but believes they are “fair.”

To Choi, there are many similarities.

“We saw Amazon get to really big scale in the U.S.. Merchants also found tools to build their own presence. This birthed Shopify, which today is worth $160 billion. Both companies saw their market caps quadruple during the pandemic,” he said. “Now we’re seeing the same dynamics in LatAm…Our bet here is that this company and business has all the same dynamics and the same really powerful tailwinds.”

For Accel partner Andrew Braccia, Nuvemshop has a clear first mover advantage.

“Over the past decade, direct-to-consumer has become one of the most important drivers of entrepreneurship globally,” he said. “Latin America is no exception to this trend, and we believe that Nuvemshop has the level of sophistication and ability to understand all that change and fuel the continued transformation of commerce from offline to online.”

Looking ahead, Sosa expects Nuvemshop will use its new capital to significantly invest in: continuing to open its APIs; payments processing and financial services; “everything related to logistics and logistics management” and attracting smaller merchants. It also plans to expand into other markets such as Colombia, Chile and Peru over the next 18-24 months. Nuvemshop currently operates in Mexico, Brazil and Argentina.

“While the countries share the same secular trends and product experience, they have very different market dynamics,” Sosa said. “This requires an on the ground local knowledge to make it all work. Separate markets require distinct knowledge. That makes this a more complicated opportunity, but one that enables a long-term competitive advantage.”

Caesar Sengupta, the long-time head of Google’s Next Billion Users initiative, is leaving the company next month, he said Monday. Sengupta, who additionally also led the company’s payments business in the past three years, is leaving the firm after nearly 15 years.

A regular fixture at Google’s events in India, Brazil, and Indonesia, Sengupta (pictured above) is best known outside the company for leading the company’s Next Billion Users unit, an initiative to make internet and services more accessible to users in developing markets.

As part of Next Billion Users initiative, Google brought internet connectivity to hundreds of railway stations and other public places in India and other markets (then shut down Station), launched Google Pay in India (which unlike Google Pay in the U.S., wasn’t developed atop credit cards) and built several products such as Android Go, Datally, Kormo Jobs and the Files apps.

Prior to Next Billion Users unit, Sengupta served as VP and Product Lead at ChromeOS, the company’s desktop operating system that powers Chromebooks.

“After 15 years with Google, Caesar Sengupta has made a personal decision to leave the company and start something entrepreneurial outside of Google. Through his time at Google, Caesar has played a key role in starting, building and leading initiatives such as ChromeOS, Next Billion Users and Google Pay. We are excited to see what he builds next and wish him the best in his new journey,” said a Google spokesperson in a statement. Sengupta’s current position at the firm is VP and GM of Next Billion Users and Payments.

“To the many, many Googlers working in Africa, APAC, LATAM and MENA, it has been inspiring to hear your voices take more weight in the products Google builds. I know there is so much more work to do,” Sengupta wrote in an email to his colleagues, which he also shared publicly.

“But we are light years ahead of where we were just a short time ago. You’ve helped digitize your economies, made Google feel local and driven Google’s investment into your countries to unprecedented levels,” wrote the Asia-based executive. Sengupta didn’t share what he plans to do next.

Under Sengupta’s watch, Google also made several investments in startups in Asia. Some of these investments include Bangalore-based delivery startup Dunzo, Android lockscreen developer Glance, and popular news and entertainment app Dailyhunt.

M Capital Management founding partners Joachim Ackermann (left) and Mayank Parekh (right)

M Capital Management, a Singapore-based venture capital firm, announced today it has closed its debut fund, M Venture Partners (MVP), totaling $30.85 million USD. It plans to invest in 40 early-stage startups, primarily seed and pre-Series A, with an average initial check size of about $500,000.

M Capital Management was founded by Mayank Parekh, whose investment experience includes launching Grange Partners and leadership positions at Southern Capital Group and McKinsey & Company, and Joachim Ackermann, former managing director of Google Asia Pacific. Other senior team members include Dr. Tanuja Rajah, previously Entrepreneur First’s launch manager, and Chethana Ellepola, former research director at Acquity Stockbrokers.

MVP, a sector-agnostic fund, has already invested in 11 companies, including one, 3D Metal Forge, that recently went public on the Australian Securities Exchange.

Other portfolio companies include behavioral health coaching startup Naluri; AI-enabled lending and credit-as-a-service company Impact Credit Solutions; alternative investment fund aggregator XEN Capital; and Cipher Cancer Clinics, which is focused on making oncological care more affordable and accessible in India.

Parekh told TechCrunch that M Capital Management was launched because “we believe that the early-stage investing space in our region has substantial room for growth. A decade ago there were very few unicorns. This has changed substantially more recently, not only because of obvious advancements bringing online previously underserved or untapped populations, but also because they venture system has developed nicely in Singapore and, for that matter, across the region with support from institutional VCs at various stages of funding need, government agency support, the advent of local accelerators and rapidly growing network of angel investing bodies.”

Parekh added that he expects to see more unicorns and “soonicorns” (or companies expected to hit unicorn valuation in the near future) emerge.

As early-stage, sector-agnostic investors, Parekh said MVP’s focus is on founders, specifically those who have “pedigree professional experience and strong academic backgrounds.” For example, Naluri chief executive officer Azran Osman-Rani was previously founder of AirAsiaX, guiding it from launch to its 2013 initial public offering in six years.

MVP will focus mostly on Singapore-based startups because it invests primarily in B2B or B2B2C companies. “We need a fertile ground for our chosen startups to launch their business models with leading corporate or business partners,” said Parekh. “Singapore provides just that. It’s the hub for market leading institutions and it’s not uncommon to see them creating opportunities for new technology or disruptive ideas.”

Most of MVP’s portfolio companies have “regional or global aspirations, leveraging Singapore as the core launch platform,” he added. MVP has also already made investments in Malaysia and India, and is actively looking at companies in Thailand, the Philippines and Indonesia.

Kate Hiscox is having a moment. Her company, Sivo, founded eight months ago, has already raised $5 million from investors at a post-money valuation of $100 million, and she is in active talks with others who would like her to consider accepting Series A funding from them.

Partly, the attention owes to the fact that Hiscox is part of the newest graduating class of the popular accelerator Y Combinator, along with roughly 350 other companies, and if there’s anything venture capitalists like, it’s freshly minted YC grads.

They also like what Sivo aims to do, which is to strike deals with debt providers for gigantic credit lines that it will then, through its API, work with many companies, big and small, to disburse via their own lending products. Yes, Sivo is making interest off money that it is simply divvying up into smaller amounts. But the real magic, says Hiscox, is in the risk management that Sivo provides. It doesn’t just parcel out debt; it helps its customers that don’t have their own risk management practices figure out who is worthy of a loan and how much.

Hiscox — who has founded a number over the years, one of which she took public on the Toronto Stock Exchange in 2018 — calls it a Stripe for debt. But one question is how Stripe itself might feel about Sivo. Stripe was also once a YC company, it also lends debt to its customers, and it seemingly doesn’t like when its investors fund potential rivals. Another question is how a company like Sivo fares when interest rates rise and the debt it borrows is no longer cheap.

Hiscox suggests she’s not worried about either scenario right now. We talked with her on Friday about the company in a conversation that follows, edited lightly for length and clarity.

TC: You’re building what you describe as Stripe for debt. But isn’t Stripe’s loan business competitive with yours?

KH: No. Sivo is the first YC company that’s building debt as a service.

The reason why [we are] is that it’s very difficult for fintechs and neobanks and gig platforms to be able to raise that capital to be able to lend money to their users at scale; that generally takes a couple of years. What we’re building out is essentially Stripe for debt, which gets these companies access to debt capital on day one. Our team has decades of experience with risk and raising debt and building enterprise tech at companies like Goldman Sachs and NASA and Revolut and Citigroup.

TC: Give me a use case.

KH: So we have more than 100 companies now in our customer pipeline, including Uber. In the case of Uber, they want to be able to offer financial products to their drivers. Maybe it’s to fund a vehicle or provide a payday advance. But Uber really can’t do that because it doesn’t want to look like an employer, and it also doesn’t want to necessarily deal with risk modeling, meaning who in their big driver base has the right risk profile [to rationalize a loan]. You plug in Sivo, and we will cycle through the Uber driver base to figure out to whom it makes sense to make a loan offer, and we do it all this through API.

TC: But Uber is not yet a paying customer?

KH: No, we go live next month; that’s an example of how Uber would use us. There are also a lot of neobanks that are three to five years old and want to start lending and really don’t know have that risk experience they need to get access to debt capital in order to have the money to be able to lend to their customers. So with something like Sivo, they’re able to integrate our service through our API, and we’re able to pretty much tell them who they should be lending to, how much they should lend, and then we offer the debt funding.

TC: Do have any debt deals in place?

KH: We signed a debt deal last week for $100 million and we’re working on another debt deal for close to $1 billion that will be announced next month.

TC: Who is your debt partner and how have you convinced them to lend so much to such a young outfit?

KH: I’m not sure I can say publicly yet who we’re working with, but we source our capital through all the usual suspects — mutual funds, pension funds, banks — and we’re able to do because as soon as we announced that we were going to start doing this as a product, we had tons of customers come and say, ‘I want this. [Trying to do this ourselves] is long and complex and painful, and we want just want to be able to do it in a simple way, like we would use Stripe for payments.’

I also have a lot of experience because I’d taken a company public and have lots of connections in the capital markets, and so does our CFO.

And there are actually a lot of banks that would love more exposure to fintechs and to a basket of YC-backed fintechs in particular because they can get yield, but the check sizes are too small for a bank. There’s also concern that the fintechs don’t really have a lot of risk experience. Meanwhile, our team has a lot of gray hair as far as risk is concerned.

TC: What kind of economic agreement do you have with that debt lender and what percentage of each loan will you charge your customers?

KH: I really can’t tell you, including because it’s going to vary from fintech to fintech; some have more complicated user models, some have bigger user bases, some operate in different regions around the world. What I can say is that it’s an incredible time for us to access debt capital from institutions because interest rates are so low and even negative in some parts of Europe. You just have to have the right team to know where to go and get it.

TC You’re also raised $5 million in seed equity funding already at a post-money valuation of $100 million, including from Andre Charoo of Maple VC, who says he’s written you his biggest check yet. Are you done raising equity funding for now? That’s already a very high valuation.

KH: We’re trying to decide now if we’re going direct to a Series A. This is our first raise, but everybody ‘gets’ our business model, so we’ve had an avalanche of investors, and some very big VCs now have reached out.

TC: Obviously, interest rates will go up. What then?

KH: When interest rates go up, all lending gets more expensive. I mean, there’s a pandemic right now and a lot of cash in the system, and there’s some talk about inflation, but we don’t really see interest rates going up for a few years.

Of course they will eventually rise, but when that happens, everybody’s rates will go up, whether you borrow on a credit card or from a traditional bank or a fintech.