Analysis: Financing Latin Ventures: 6 Companies to watch
Tuesday’s announcement that NuvoTV, a cable network that airs English-language shows targeting Hispanic got a $40 million dollar investment from several major institutions, highlights the interest Hispanic and Latin American companies get in the venture capital and private equity community.
It is also interesting to note that Palladium Equity Partners recently got a US $100 million commitment from five New York City pension funds for its fourth fund for which it has a US $800 million funding goal. Palladium Equity Partners is an investor in Hispanic Parenting Media company Todo Bebe and in DolEx (Dolar Express), a provider of electronic funds transfer services through over 700 branch locations and over 1,000 agent locations in the U.S., Puerto Rico.
Lets review 6 companies that recently were funded in the U.S. Hispanic and Latin American media and digital sector.
- NuvoTV: Investors discover the English – Language Hispanic Opportunity
Hispanic Broadcast Network NuvoTV got US $40 million from investors Columbia Capital and Rho Capital Partners Inc., and new investors Veronis Suhler Stevenson and Tennenbaum Capital Partners. The proceeds are going to be used to produce more programming and pay for marketing. The Nuvo TV transaction highlights an increased interest of the investment community in the media sector targeting English-dominant Hispanics. NuvoTV CEO Michael Schwimmer said in an interview that U.S. Hispanic viewers, the majority of whom watch English-language TV, are seeking shows with Latino actors and scenarios that better reflect their lives. “There’s an enormous amount of English-language consumption by Latinos. It’s the fastest growing segment by far, there’s none even close.”
- Vostu: A bet on social Latin Social Games and Virtual Goods
Latin America social gaming giant Vostu just raised a new round of financing involving Tiger Global, Intel Capital and General Catalyst, The Next Web reports. All three funds had already participated in the company’s previous US $30 million round. Vostu is the developer behind social games such as “MiniFazenda” and “MiniCity,” which are very similar to “Farmille” and the like. Its business model is freemium, as it makes money from selling virtual goods – not to mention its marketing deals with brands. Unlike its global competitor Zynga, Vostu decided to focus on a specific region, Latin America, with a particular emphasis on Brazil.
- Ideame-Movere: Panregional Crowd funding play
Last week, the Buenos Aires Argentina based crowd funding site Ideame acquired the Brazilian company Movere in a deal that may prompt more consolidation in this sector in Latin America. Ideame said it had acquired 100 percent of Movere’s shares in exchange for 15% of Ideame’s stock, valued at about $ 2.5 million. Movere, based in Rio de Janeiro, is Brazil’s second-largest crowd funding site. Ideame is trying to become a top player for the entire region. It started at the same time in Argentina, Chile and Mexico.
- Media Response Corp: Betting on the expansion of Direct Response in Spanish and Portuguese-speaking markets
In 2008, New York and London based media investment firm VSS (Veronis, Suhler & Stevensohn) invested US $15 million in Media Response Corp., a group of direct response online marketing firms active in Spain and Latin America. Founded in Spain by entrepreneur Juan Imaz, Media Response bets on the expansion of mostly performance oriented digital advertising in the Latin world.
- Batanga: Digital Advertising Intermediation and Content Play
Also last week, Batanga acquired Uruguay based Digital Content company Crovat. Miami headquartered Online Ad Network and Content Company Batanga is another private equity backed company (H.I.G Ventures was Lead Investor in the last funding round of US$ 30 million). Last year, Batanga bought Latin American online ad-networks Adfunky and I-Network. The U.S. Hispanic and Latin American digital media and advertising market place has a lot of catch-up potential compared to the U.S. and European markets. This is an opportunity that companies like Batanga attempt to capitalize on. The share of the online advertising market that is intermediated by online ad-networks is below 50% in Latin America and the U.S. Hispanic market, but higher in the U.S. and Europe.
- Open English: Online English classes for Latin Americans
Online English language school Open English last month raised more than $40 million in its latest financing round, the company announced. New York-based Insight Venture Partners led the round. California-based Redpoint Ventures and existing investors including Flybridge and Kaszek also participated. The exact amount of the round came in at a reported $43 million. Funds are going to be used to expand in Latin America with particular emphasis on Brasil. “Latin America has always been our core region and we see Brazil as a key avenue for growth for the company,” said Andres Moreno, co-founder and CEO of Open English. The Open English investment is both a bet on the emerging Latin American middle class and on the digital platform as a viable education tool.
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