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Latin America is experiencing a resurgence of left-leaning politics, with several countries electing leftist presidents in recent years, including Gabriel Boric in Chile, Pedro Castillo in Peru, and Gustavo Petro in Colombia. However, the region also still has right-leaning and centrist governments. Poverty and inequality remain high issues in Latin America. While the middle class has grown, its growth has stagnated in recent years. The COVID-19 pandemic worsened poverty and inequality in most Latin American countries. Looking ahead, Brazil's upcoming election could further impact the region's political landscape.

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Latin America Digital Transformation Report 2022 September 20, 2022
2 Disclaimer This report, including the information contained herein, has been compiled for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any security. Any such offer or solicitation shall only be made pursuant to the final offering documents related to such security. This report also does not constitute legal, strategic, accounting, tax, or other similar professional advice normally provided by licensed or certified practitioners. The report relies on data from a wide range of sources, including public and private companies, market research firms and government agencies. We cite specific sources where data are public; the presentation is also informed by non-public information, interviews with experts (on- and off-the-record), proprietary data analysis, primary research conducted by Atlantico and by others. We disclaim any and all warranties, express or implied, with respect to the presentation. Atlantico makes no representations or warranties regarding the accuracy or completeness of the information contained in this report and expressly disclaims any and all liabilities based on it. Atlantico shall not be obliged to maintain, update or correct the report, nor shall it be liable, in any event, for any losses suffered as a consequence of the use of this report by any third parties.
3 Readme.txt Cautious optimism. Curiously, our mixed emotions about the current state of the market mirror how tech founders and workers are feeling this year. Our optimism is rooted in the conviction that digitalization is a secular force transforming Latin America for decades to come. Whether we are drunk at the peak (last year) or hungover in the trough (this year), when we zoom out from the cycle of the day, the trendline is clearly up and to the right. As our Digital Transformation Index shows, the region’s technology ecosystem stands to grow by an order-of-magnitude as it catches up to the likes of India, China, and even the US, all of which began their journeys long before us. Value creation from tech in LatAm will be measured in the trillions of dollars. The foundation for long-term growth is rock solid: LatAm is ahead of China in internet penetration and leads globally in digital adoption for most internet services and digital media. Capital, long a barrier to growth, is no longer scarce even after a halving of venture funding from 2021 peaks. Despite the market downturn, human capital still flocks to tech, with students at top schools reinforcing their preference to work in tech above all other fields. Perhaps most striking is how the pandemic-sparked digital boom has persisted in Latin America, representing a permanent leap forward while more developed markets like the US are now reverting to pre-pandemic trendlines. This great leap forward in digital adoption goes beyond e-commerce and food delivery and is seen across all areas of society – from digital banking usage to telemedicine. After experiencing the future, for Latin Americans there is no going back to waiting in line at the bank branch or at the doctor’s office. If there’s a reason why optimism runs through our veins as entrepreneurs, there is equally good reason for the caution with which such optimism should be tempered. As Tom Jobim warned us, “Brazil is not for beginners,” and, in this year’s market downturn, neither is the rest of the world. After years of pumping steroids into the veins of the world economy, Central Banks pressed the brakes as inflation finally reared its head. Asset prices worldwide adjusted abruptly, and tech companies were no exception – with cash flows further into the future, they felt the pain especially severely as investors questioned the unwinding of this economic adjustment. Venture funding eased up and founders that the market encouraged to grow at all costs only six months ago are now told to focus on margins. Our research shows that founders are tightening their belts, but most likely not enough given the uncertain global and regional backdrop. Yet, encouragingly, historic data shows that a pot of gold (or bitcoin) may await us at the end of the rainbow if we exercise enough caution to make it there. The data shows that businesses that survive and get funded in bear markets like these are significantly more likely to become large, independent public companies. But ensuring survival is far from an easy feat and finding balance is key this year. Amidst all the dynamism, this year we found ourselves drawn to explore three different areas of opportunity: for Fintech, Latin America’s world-class performance continues. A rising tide for B2B innovation accelerated by infrastructure buildout and record-breaking adoption of Brazil’s instant payment system Pix define this continued success. Moreover, a new wave of entrepreneurs is breaking barriers for SMB digitalization in Latin America, bridging the gap between the abnormally high number of SMBs in the region and the equally shy value they create for the economy. Finally, for Crypto and web3, while it’s still early days, Latin America is perhaps the most fertile ground for the application of successful use cases. We are excited to have you join us in this third edition of the Report. Enjoy the ride!
4 Research Team Let us give credit where credit is due Ana Martins Partner, Atlantico Carlos Pinto Wharton School, University of Pennsylvania Ana Luisa Guimarães University of Southern California Maika Pereira Wharton School, University of Pennsylvania Aurora Feng Stanford University Victor Ramos Associate, Atlantico Julio Vasconcellos Partner, Atlantico Nathan Wong Project Lead, Harvard Business School Special Contributors Hugo Barra Florian Hagenbuch Mate Pencz Guilherme Telles Atlantico Venture Board Partners Guilherme Grupenmacher
5 Cases with 25+ Leading Companies in the Region Our Partners We are thankful for the help of these organizations and contributors who partnered with us on primary research and data collection and analysis Extensive Primary Research Initiatives ... and countless other experts and friends who we interviewed and helped us with on- and off-the-record data, information, and insights. Thank you! The Future of Work in Latin America 2022: Runa and Atlantico surveyed HR leaders and employees from 500 companies across the region National Opinions: AtlasIntel and Atlantico surveyed +6.4k people across 5 Latin America countries plus the US (95% confidence level w/ 2-3% margin) Tech Industry Outlook: Vertico and Atlantico surveyed over 200 tech employees, from C-levels to individual contributors, in Latin America Atlantico Student Survey: Conducted with over 250 undergraduate students representing 60 top schools in Brazil and abroad Research with founders: Atlantico brings original insights on founders, from the Good View Summit Unicorn survey, Atlantico founder survey, Canary founder survey and more And other initiatives…
6 About Atlantico Led by modern founder-CEOs with a long record of investing success Atlantico was started by entrepreneurs who founded and scaled some of the largest tech companies in Latin America (and the world) and have been investing in the region for over a decade. Unique boutique approach enabled by a highly-selective investment style We concentrate capital on fewer, higher-conviction investments in order to focus our time and support for our portfolio companies. Extended team comprised of world-class specialists with domain expertise Atlantico has an exclusive team of Operating Partners with deep expertise in Product, Engineering, Talent, and Growth to help founders win. Deep analytical and primary research capabilities that support all activities We believe judgment in venture comes from combining qualitative pattern- matching (the “art” from hands-on experience) and rigorous data analysis (the “science”), and tirelessly apply this approach to our work. Atlantico is a leading early-stage venture capital fund investing in Latin America
7 Latin America Digital Transformation Report 2022 2. A Changing Landscape 2.1 State of Venture Capital and Tech 2.2 The Latin American Opportunity 3. Opportunities Ahead 3.1 Fintech 3.2 SMB Digitalization 3.3 Web3 & Crypto 1. The Foundations 1.1 Socioeconomic Foundations 1.2 Digitalization 1.3 Remote Work
8 Latin America Digital Transformation Report 2022 1. The Foundations 1.1 SOCIECONOMIC FOUNDATIONS Latin America has a population of 665 million people and a GDP of over US$ 5T, with Brazil, Mexico, Argentina, Chile, and Colombia making up 80% of it. With key elections across the region this year, Latin America has been experiencing a recent resurgence in left-of-center politics 1.2 DIGITALIZATION Latin Americans continue to come online at a rapid pace, with internet penetration reaching 78%, surpassing China. 5G adoption shows promise and e-commerce penetration, accelerated by COVID-19, continues even post-pandemic 1.3 REMOTE WORK While COVID-19 brought about the rapid adoption of remote work, the ability to do so was highly dependent on wage levels. Employees working remotely have shown higher levels of satisfaction and productivity, especially when given flexibility to choose where and when to work from the office
9 - Auguste Comte 1.1 Socioeconomic Foundations “Demography is destiny” ”
10 Population of Latin America, 20211 MM of people Brazil Argentina Mexico Colombia 132 52 46 19 Chile 215 40% 24% 24% 23% 18% 16% 26% 54% 63% 63% 60% 59% 58% 60% 13% 14% 17% 23% 26% 14% 0-14 60+ Oceania 15-59 Europe North America Latin America & the Caribbean World Africa 6% Asia Population age breakdown, 20212 Population distribution by age cohort 2021 Median Age Change in Median Age vs. 2016 (years) 19 +0.3 30 +1.8 31 +1.8 32 +0.9 38 +0.9 42 +1.1 30 +1.3 Life Expectancy at Birth 62 72 73 79 78 77 71 Latin America’s demographic bonus* is slowly coming to an end due its aging population Latin America is home to 665 million people and stands to benefit from a comparatively young population Life Expectancy at Birth Note: (*) Demographic bonus is a condition in which the country’s productive age population is more than the non-productive population. Source: (1) The Economic Commission for Latin America and the Caribbean; (2) United Nations Department of Economic and Social Affairs
11 23.0 17.5 5.0 4.2 3.2 1.6 1.3 China Latin America Mexico Brazil India Germany United States GDP by country/region, 20221 Current prices, US$ T Latin America GDP by country, 20222 % of total Latin American GDP, US$ T Argentina 6% 26% 10% Colombia 32% Brazil 20% Rest of Latin America Mexico Chile 6% If Latin America were a single country, it would have the third largest GDP in the world $1.6 $1.3 $0.5 $0.3 $0.3 $1.0 Latin America’s GDP is greater than US$ 5T, with Brazil, Mexico, Argentina, Chile, and Colombia making up 80% of it Source: (1) International Monetary Fund; (2) World Bank
12 Unemployment has remained above pre-pandemic levels, hindered by high levels of informality 2016 2017 2018 2019 2020 2021 Chile 6.0% Argentina Mexico 5.5% 9.1% 14.3% 10.9% 4.4% 5.4% 3.9% 4.9% 14.4% 8.1% India 8.7% US 6.7% 11.6% Brazil 27% Argentina 14% 39% 43% 54% Mexico Chile Advanced Economies ** Unemployment rate by country, 20221 % Labor informality rate by country, 2021*,1,2 % of total employment Brazil Colombia Note: (*) Informality refers to legal economic activities that are not taxed nor monitored by the government; (**) Advanced Economies as defined by the World Bank Source: (1) World Bank; (2) International Labour Organization “Employment and informality in Latin America and the Caribbean: an insufficient and unequal recovery” (2021)
13 Share of net personal wealth by percentile, 20212 % of national wealth 1.0% 4.3% Brazil Chile Argentina 1.4% Colombia India Mexico US*** 1.7% 9.8% 5.8% 19.9% China** 44.4% Poverty rate by country, 20201* % of total population 90-99th 35% 61% 78% 26% India 71% 31% 65% 33% 99th+ Europe 46% Latin America 3% 35% 32% 37% China US 68% 32% Poverty and inequality remain high in Latin America: The top 1% of the population holds 46% of the wealth Note: (*) Poverty headcount ratio (%) at US$5.50 a day (2011 purchasing power parity); (**) Latest data is from 2011; (***) Latest available data is from 2019 Source: (1) World Bank; (2) World Inequality Database
14 Middle class share of the population, 20211,2* % of population 26% 48% 28% 61% Colombia 56% Argentina Chile Mexico Brazil 45% OECD Average** 44% 32% 22% 2000 2005 2010 2015 2020 37% Middle Class US$ 13-70 22% Poor US$ 0-5.5 39% Vulnerable US$ 5.5-13 Latin America share of population by income class*** % of population Growth of the middle class in Latin America has been stagnant since 2015 Note: (*) Middle class is defined as earning US$ 13-70 per day for LatAm countries and 75-200% the median national income for the OECD average, with the latest data available being from 2016; (**) OECD is a group of 38 countries, mostly advanced economies; (***) The source’s methodology changed in 2015 Source: (1) OECD “Society at a Glance 2019” (2019); (2) World Bank “The Gradual Rise and Rapid Decline of the Middle Class in LatAm and the Caribbean” (2021)
15 The pandemic aggravated poverty and inequality in most Latin American countries Impact of COVID-19 on extreme poverty1 Increase in poverty rates during COVID-19 (difference in percentage points) 0.02 0.04 0.06 -0.04 0.00 -0.02 0.08 -0.06 Mexico Brazil Paraguay Peru Argentina Colombia Chile Costa Rica An increase in the Gini Coefficient represents an increase in inequality Gini Coefficient Change2 Circa 2019* and 2020 0.2 0.6 0.4 1.2 0.8 0.0 1.0 Mexico Colombia Bolivia Argentina Chile Peru Note: (*) For Chile, the data is from 2017, and for Mexico, the data is from 2018. For the remaining countries, the data prior to the pandemic is from 2019. Source: (1) World Bank, “COVID-19 and Economic Inequality” (2022); (2) IDB, “The Pandemic Is Increasing Inequality in Latin America”, (2022)
16 Chile’s Election Signals a Hard Left Turn Peru’s Polarized Election Reflects Democratic Malaise A New Group of Left-Wing Presidents Takes Over in Latin America June 2022 Gustavo Petro, a former guerrilla fighter of the left-wing M-19, is elected President of Colombia March 2022 Former student union leader Gabriel Boric is sworn in as President of Chile July 2021 Pedro Castillo, one of the key leaders of the 2017 teachers’ strike, takes office as President of Peru 2019 2022*** Right Leaning Left Leaning Center Gustavo Petro Wins the Election, Becoming Colombia’s First Leftist Leader Recent transitions of power in Latin America Latin America’s Political Heat Map1 Latin America is experiencing a recent resurgence of the political left, with many pointing to a new “pink tide”* October 2022 Brazil’s upcoming election will be a tight race** between the current president (Bosonaro) and a left- of-center former president (Lula), who if elected will further strengthen the tide ? Note: (*) The pink tide, or the turn to the left, was a political wave and perception of a turn towards left-wing governments in Latin American democracies moving away from the neoliberal economic model at the start of the 21st century; (**) According to polls; (***) Colombia’s value in the 2022 was updated after the 2022 election Source: (1) Agence France-Presse
17 Brazilian population’s feelings towards the institution of a military dictatorship in the country, 20221 % of population 12% 9% Not sure / no response In favor Against 79% Brazilian population’s perceptions on fraud risks in the upcoming election1 % of population Don’t trust Trust Not sure 11% Electronic voting 39% 50% 11% Not sure Low risk 39% 29% No risk High risk 21% Risk of electoral fraud This number reaches 69% among those who say they will vote for the incumbent President Jair Bolsonaro, one of the most outspoken critics of the electronic voting system in Brazil The Brazilian Federal Court of Account audited Brazil’s electronic voting system and concluded that it has adequate measures in place to mitigate risk of fraudulent incidents2 Brazilians remain overwhelmingly in favor of democracy, though doubts about the system persist + Source: (1) Atlantico and AtlasIntel Brazil survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=2,262, 2p.p margin of error at 95% confidence level); (2) Exame “Auditoria conclui que TSE tem mecanismos adequados para evitar riscos nas eleições” (2022)
18 1.2 Digitalization - Heraclitus “The only constant in life is change.” ”
19 54% 58% 62% 65% 69% 74% 78% 2016 2019 2017 2021 2015 2020 2018 95% 92% 92% 86% 81% 74% 70% 69% 62% 47% Colombia Mexico Brazil World Avg Argentina Chile China India Germany US Internet penetration in LatAm has surpassed that of China and India and is approaching that of developed economies Internet penetration rate by year and region Latin America, 2015-2021; Worldwide, 2021 Source: (1) World Bank; (2) We Are Social
20 55% 61% 65% 69% 72% 77% 2021 2017 2020 2019 2018 2016 +7% 12% China Latin America 24% 76% US 54% 88% 46% Android iOS CAGR Smartphone adoption rate has increased 40% over the last five years, with most devices running on Android Smartphone adoption rate in Latin America1 % of total population Smartphone operating system market share by region2 % of total Android and iOS devices Source: (1) GSMA; (2) Statcounter
21 108% 85% 68% 57% 55% 29% 21% 14% 10% Chile Germany Argentina US UK China Colombia Mexico Brazil Mobile data continues to be expensive in some parts of Latin America, with data in Mexico and Colombia costing significantly more than in mature economies Brazil and Chile are exceptions: mobile data costs are lower than in the US and UK, and more in-line with China Mobile data cost in Mexico and Colombia is higher than in developed countries, while Brazil and Chile are cheaper Local Cost of 1 GB Mobile Data (2022) vs 1 Big Mac (per Big Mac Index, 2021)1,2* Percentage of 1 GB of mobile data per 1 Big Mac in Local Currency Note: (*) The Big Mac Index is compiled by the Economist to determine if currencies are at their correct level based on purchasing power parity Source: (1) We are Social; (2) The Economist
22 30% 46% 69% 28% 62% 75% 36% 75% 56% Purchase Products Online Use Social Media 23% Play Mobile Games Access Online Banking Watch Videos Online 2022 2018 Using Internet 10.3 9.9 7.0 5.3 Watching TV Online 4.1 3.6 4.8 3.0 Using Social Media 3.7 3.3 2.2 2.0 Brazil China Mexico US Digital adoption has transformed everyday life for broad swaths of the Latin American population Percentage of Brazilians who… % of survey respondents Time spent daily by activity by country Number of hours Source: We Are Social
23 16 30 26 14 14 14 29 23 16 20 Instagram WhatsApp YouTube TikTok Facebook 2022 2021 2021 2022 WhatsApp Facebook Instagram Facebook Messenger Netflix TikTok Spotify Uber MercadoLibre iFood WhatsApp Facebook Instagram TikTok Netflix MercadoLibre Spotify Uber iFood Facebook Messenger In the social media category, WhatsApp remains the dominant platform and TikTok continues to gain traction Ranking of mobile apps in Brazil By monthly active users Brazilians’ usage of social media by year Hours spent per month by social media app Source: We Are Social
24 33 84 120 140 155 168 178 2022(e) 2021 2020 2023(e) 2024(e) 2025(e) 2019 Brazil alone had ~62 million active TikTok users in August 2022, the highest among Latin American countries 14 17 32 28 62 TikTok* 2022* 2020 2021 2019 While TikTok targets more affluent audiences, another Chinese rival, Kwai, targets blue-collar workers and lower-income populations, a strategy that has allowed it to go viral in more recent years Chinese social network giants TikTok and Kwai are increasingly popular in Latin America, particularly in Brazil Number of TikTok active users in Latin America Millions Growth of Kwai active users in Brazil Millions Note: (*) Numbers from August 2022 Source: Insider Intelligence, Data.ai, Google Trends, Rest of World, Atlantico Analysis
25 4% 7% Jan-18 Jan-20 3% 5% Jan-21 Jan-19 6% 11% 12% 13% 15% 14% Jan-21 Jan-20 Jan-19 16% Jan-18 17% 18% Back to the Future: US e-commerce penetration reverted to pre- pandemic levels while Brazil stayed nearly 3 years ahead of trend Online share of total retail, United States % of total retail Online share of total retail, Brazil % of total retail Pre-Pandemic Trend Pre-Pandemic Trend Brazil saw e-commerce penetration reach and sustain levels 2.5 years ahead of the historic trend ~2.5x Note: Study analyzes all Mastercard anonymized transaction-level data for the researched economics Source: International Monetary Fund and MasterCard Economics Institute “E-commerce During Covid: Stylized Facts from 47 Economies” (2022) Sept-21 Sept-21
26 Food and grocery delivery continued growing well past the pandemic boom, as seen through category leader iFood iFood food delivery gross merchandise volume Indexed to December 2019 (=100) iFood groceries delivery gross merchandise volume Indexed to December 2019 (=100) Jul -21 Jul -21 Beginning of the COVID- 19 pandemic in Brazil iFood is Brazil’s leading food and grocery delivery platform, processing ~25% of total food delivery orders in the country, and nearly 80% when considering online aggregators only Beginning of the COVID-19 pandemic in Brazil Source: iFood internal data 100 5,518 11,094 14,102 13,554 14,163 Nov -20 Nov -21 2,089 Jun -22 Apr -20 Mar -21 9,920 Aug -20 1,130 Dec -19 Mar -22 100 204 234 287 288 315 338 378 Nov -21 Mar -22 Mar -21 Nov -20 Jun -22 Apr -20 157 Dec -19 Aug -20
27 Beginning of the COVID- 19 pandemic in Brazil 12.2 9.5 8.2 6.3 1Q19 0.2 2Q22 1Q21 4Q21 3.6 5.4 0.2 3Q21 0.6 2Q19 2Q21 1Q20 4Q20 3Q20 4.5 0.3 2Q20 4Q19 1Q22 3Q19 0.2 10.0 11.5 1,594 1,180 1,270 905 3Q19 789 3Q21 692 6 2Q22 4Q21 1Q20 1Q21 4Q20 1,732 1,272 58 3Q20 646 4Q19 2Q19 9 2Q20 14 1Q19 13 2Q21 1Q22 Telemedicine sustained strong growth since the pandemic as we see from Conexa, a leading health platform Conexa Saúde registered user base Millions of users Conexa Saúde number of appointments Thousands of appointments Conexa Saúde is the biggest independent telemedicine and digital health platform in Brazil, managing 20M+ lives Beginning of the COVID-19 pandemic in Brazil 4Q19 34% 1Q22 11% 1Q20 30% 3Q21 34% 1Q21 26% 1Q19 2Q20 26% 2Q21 19% 35% 3Q20 29% 4Q20 2Q19 2Q22 4Q21 3Q19 Share of mental health appointments Number of appointments Note: Prior to the pandemic, there wasn’t regulatory backing and framework for telemedicine in Brazil, but the pandemic cleared the way for regulatory acceptance Source: Conexa Saúde internal data
28 1.3 Remote Work
29 Not Going Back: Following the shift to remote work, software developers are no longer open to working in-office 24% 68% Q4 23% Q1 66% Q2 17% 68% Q1 66% Q4 19% 60% 61% Q3 60% 23% Q2 Q1 55% 65% 20% 58% 54% 60% Remote Positions 58% Q1 Q4 58% 70% 48% 63% Q2 21% Q3 Q3 62% 58% 19% 59% In-person Positions Q2 2019 2020 2021 2022 Software developer job interview acceptance rate by remote vs. in-person job position, Brazil % Revelo is an American platform for selecting and hiring tech talent from Latin America Source: Revelo internal data (n = 124,000 software developers)
30 Distribution of remote work models by sector % of respondents 30% 49% 18% Health & Pharmacy 27% 21% 16% Financial Services 36% 18% 25% 34% 8% 9% 19% Consulting 23% 22% 30% Education 38% 19% 48% 32% 7% 46% 31% Logistics & Manufacturing Commerce 4% 52% 11% 11% 58% 14% 5% 11% 27% Technology Marketing & Entertainment <25% remote 51%-99% remote 25-50% remote 100% remote 14% 36% 12% 28% 12% 17% 62% 19% Current policy (2022) Before COVID-19 (2020) 51%-99% remote 25-50% remote 100% remote <25% remote Most industries have increased levels of remote work, with tech and consulting showing the highest adoption rates Remote work distribution before and after COVID-19 % of respondents Atlantico and Runa surveyed over 500 executives and employees in Latin America. The full survey can be found here. + Source: Runa and Atlantico survey “The Future of Work in Latin America” 2022, collected from July 4th to August 23rd (n = 515 employees and executives in Latin America)
31 26% 24% 7% 9% 52% 44% 41% 28% 22% 32% 52% 63% 100% Remote 51%-99% Remote 25-50% Remote <25% Remote 3.4 3.9 < 25% of team remote 25-50% of team remote Lower Productivity Same Productivity Higher Productivity 4.5 51-99% of team remote 4.6 100% of team remote Employees working remotely are estimated as having higher levels of both satisfaction and productivity Employee satisfaction by work model Average for each model, rating from 1 to 5 Employee productivity by work model % of respondents + Source: Runa and Atlantico survey “The Future of Work in Latin America 2022” (n = 515 employees and executives in Latin America)
32 92% 59% 8% 41% Employees not given flexibility to choose when to go to the office Employees given flexibility to choose when to go to the office High satisfaction (ranking 4 or 5) Low satisfaction (ranking 1, 2 or 3) 54% 30% 34% 51% 12% 19% Employees not given flexibility to choose when to go to the office Employees given flexibility to choose when to go to the office Higher productivity Same productivity Lower productivity This trend is seen to further improve when employees are given the flexibility to choose when to work from the office Employee satisfaction levels according to workplace flexibility % of respondents Employee productivity levels according to workplace flexibility % of respondents + Source: Runa and Atlantico survey “The Future of Work in Latin America 2022” (n = 515 employees and executives in Latin America)
33 Latin America Digital Transformation Report 2022 1. The Foundations 2. A Changing Landscape 3. Opportunities Ahead
34 Latin America Digital Transformation Report 2022 2.1 STATE OF VENTURE CAPITAL AND TECH While 2021 was a banner year for venture capital both globally and in Latin America, 2022 has seen sharp reductions in both public and private markets • While local funds have largely stayed the course, foreign investors are slowing investments in the region • Although ~30% of companies saw layoffs and postponed fundraising plans, layoffs were relatively small, and most companies plan to resume fundraising in the next 12 months 2. A Changing Landscape 2.2 THE LATIN AMERICAN OPPORTUNITY Despite the devaluation in the tech sector globally, the case for tech in Latin America remains unchanged • The region shows massive potential when it comes to increasing tech penetration and solving regional problems, attracting top local talent • History shows that companies funded during market downturns tend to IPO at a higher rate than those funded in bull markets
35 2.1 State of Venture Capital and Tech - Jamie Dimon “My daughter asked me when she came home from school, ‘What's the financial crisis?’ and I said it's something that happens every five to seven years.” ”
36 0.0% 0.2% 2.4% 1.2% 0.8% 1.4% 1.6% 2.0% 2.2% 1.8% 0.4% 0.6% 1.0% 2017 2018 2016 2015 3.5 2014 8.1 6.3 2011 2019 2020 2.9 3.9 4.5 2021 2.1 4.3 2.3 2.7 4.3 4.5 4.5 2010 2009 2013 2012 Federal Reserve Balance Sheet (US$ T) Interest Rate (%) 0 3,500 2,500 500 2,000 1,500 4,500 4,000 1,000 3,000 2013 2009 2017 2021 +78% The S&P recorded 70 all-time highs in 2021 Federal Reserve Interest Rates and Balance Sheet Fed balance sheet and Fed Funds rates*, 2009-2021 S&P 500 Adjusted Closing Value**, 2009-2021 Index value After the 2008 downturn, a growing money supply coupled with low interest rates fueled a decade-long bull market Note: (*) Average Fed Funds rates per year and average yearly Federal Reserve balance sheet; (**) Adjusted close price adjusted for splits and dividend and/or capital gains distributions. Source: Trading Economics
37 171 158 214 290 259 294 621 2019 2018 2015 2017 2021 2020 2016 +111% NASDAQ index value (Dec. 12, 2021): 15,645 Global Venture Funding1 and Public Market Performance2 Investment in US$ B and NASDAQ Composite Index 2021 marked the peak of an age of capital abundance for tech companies when global venture funding doubled from 2020 Global venture funding (US$ B) NASDAQ Composite Index Source: (1) CB Insights “2021 State of Venture” Report; (2) NASDAQ
38 4 9 18 26 $19 2019 2021 $35 2020 2018 $46 $65 182 197 249 463 439 508 851 0 5 10 15 20 25 $15.7 $4.2 $0.5 $2.0 $1.1 $0.6 2019 2021 2020 $4.9 2018 2017 2015 2016 Growth in Funding (2020-2021) 274% Unicorn Value Growth (2020-2021) 41% Latin American Unicorns1* Private market capitalization in US$ B and number of unicorns Venture Funding in Latin American startups2 Investment amount in US$ B and number of deals The 2021 apex was similar in Latin America: Funding tripled, and both the number and value of unicorns rose meaningfully Market capitalization Number of unicorns Investment amount Number of deals Note: (*) A unicorn is a private technology company valued over $1B; only unicorns that were active at the time are counted, meaning unicorns that had exited (i.e., acquired or went public) – such as Stone, VTEX, Nubank, dLocal, etc. - have not been included. The calculation is based on latest estimated private market valuations Source: (1) Atlantico Analysis; (2) LAVCA “Industry Data and Analysis, Q2” (2022)
39 MEXICO Capital Invested: 22% BRAZIL Capital Invested: 48% COLOMBIA Capital Invested: 10% CHILE Capital Invested: 6% ARGENTINA Capital Invested: 8% Capital Invested: 6% Investment by Tech Vertical in Latin America, 2021 % of capital invested** 39% 20% 6% 9% 3% 4% 3% 3% 13% Edtech Proptech Other E-Commerce Solutions Super Apps E-Commerce Platforms & Marketplaces HRtech Logistics Tech Fintech 2021 venture investment activity was led by Brazil and by verticals like fintech, e-commerce, and marketplaces Note: (*) Percentage of capital invested is rounded to the nearest whole number; breakdown by total number of deals very closely follows percentage of capital invested: Argentina:7%, Brazil: 49%, Colombia: 9%, Chile: 10%, Mexico: 19%, Regional investments & other: ~7%; (**) Where “other” includes Healthtech (2%), Foodtech (2%), Agtech (~1%), Digital Security (~1%), Transportation & Mobility (~1%) and other tech categories. Source: LAVCA “Industry Data and Analysis” (2021) REGIONAL INVESTMENTS & OTHER VC Investments Geographical Breakdown, 2021 % of capital invested*
40 0 50 100 150 200 250 300 350 Energy 2022 2021 2020 Food 9.1% 0 1 2 3 4 5 6 7 8 9 10 2020 2022 2021 2019 1.6% 1.8% 0.3% 2.5% 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2020 2022 2021 0.3% 1.0% 0.5% 1.8% Inflation in the US2** % Interest Rates in the US2 % Commodity Prices1* US$ A global rise in commodity prices, supply chain disruptions and excess money led to hikes in inflation and rates in 2022 Note: (*) 2016=100, data until June 30th 2022; in terms of U.S. dollars, weights based on 2014-2016 average world export earnings, where energy includes petroleum, natural gas, coal and propane and where food includes cereals, vegetable oils, meat, seafood, sugar, and other (vegetables, non-citrus fruit, oranges, groundnuts/peanuts, bananas, dairy products, legumes and fishmeal); (**) Inflation data until June 30, 2022; (***) available Fed fund rates date from January 1, 2021 until July 27, 2022. The next Fed announcement is scheduled for September 21 (the day after this report goes to press) and market expectations are for a hike of 75bps to the ~3% level Source: (1) IMF; (2) Trading Economics
41 177.8 108.5 Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q4 2021 Q1 2020 Q4 2019 Q1 2022 Q3 2021 Q1 2018 Q2 2019 Q4 2018 Q2 2018 Q3 2019 Q2 2022 Q3 2018 Q2 2020 Q1 2019 NASDAQ: - 30% Global VC Funding: - 39% Comparison Q4’21 to Q2’22 NASDAQ* Global VC Funding2 11,265 Global Venture Funding1 and Public Market Performance1 Investment in US$ B and NASDAQ Composite Index 15,645 2022 has seen a sharp stock market downturn, coupled with reductions in both public and private investments Note: (*) NASDAQ values as of June 30, 2022 Source: (1) NASDAQ; (2) CBInsights “State of Venture Report, Q2” (2022)
42 Recent Trends** Non-profitable tech companies experienced a sharp drop in stock prices in 2022, nearly reverting to pre-pandemic levels Goldman Sachs Non-Profitable Technology Index* Indexed basket of US-listed profitless tech companies 0 50 100 150 200 250 300 350 400 450 H2 2019 H1 2021 H1 2020 H2 2021 H1 2019 H2 2020 H2 2022 -68% Since peaking in 2021, tech companies' valuations dropped steeply, with the index losing around two-thirds of its value at its trough thus far H1 2022 Note: (*) Created in 2021, the GS Non-Profitable Tech basket consists of non-profitable US listed companies in innovative industries, as defined by Goldman Sachs to be broad and include new economy companies across industry groups; it is optimized for liquidity. The index is an absolute measure of the value of this basket. Data until August 31st 2022. Source: Bloomberg
43 69 66 66 57 60 60 85 92 133 152 163 178 142 109 Q2 Q2 Q4 Q1 Q2 Q4 Q4 Q3 Q1 Q1 Q3 Q1 Q2 Q3 -20% -39% 2.0 0.6 0.8 2.4 1.7 0.9 5.0 Q4 Q2 Q2 1.4 Q4 1.3 Q3 1.7 2.8 Q2 5.3 0.5 Q3 Q3 3.9 Q1 Q1 Q2 Q1 Q4 Q1 -27% -39% 2019 2020 2021 2022 2019 2020 2021 2022 Unlike the global trend, Latin America peaked in Q3 2021, and faced a steeper drop as it moved into Q4 Global venture funding decreased by ~40% in the first two quarters of 2022, with the same trend present in LatAm Global Venture Funding1 Investment amount in US$ B Latin America Venture Funding2 Investment amount in US$ B Source: (1) CB “Insights State of Venture Q2” (2022); (2) LAVCA “Industry Data and Analysis, Q2” (2022)
44 -58% decrease in investments by foreign investors from 2021 to mid-2022 -34% decrease in investments by local investors from 2021 to mid-2022 Recent Trends Among Top 20 Investors Foreign investors are slowing down in the region (but not leaving) while local funds have taken some share of activity Total investments by the 20 most active investors in Latin America Total investment count attributed to top 20 investors in trailing twelve months and % of those deals accounted for by foreign investors 70% 70% 53% 64% 70% 68% 52% 54% 51% 41% 39% 36% 49% 53% 30% 30% 47% 36% 30% 32% 48% 46% 49% 59% 61% 64% 51% 47% Q4 Q2 Q1 Q1 Q4 Q3 Q3 Q3 Q2 Q2 Q2 Q4 Q1 Q1 Local investments Foreign investments 2019 2020 2021 2022 Note: (*) In cases there was a tie in the 20th investor, all investors with same deal count were included. Only investments in Brazil, Mexico, Argentina, Colombia and Chile were analyzed. “Investment” is defined as a check by an investor in a financing round (multiple “investments” by different investors can exist in a round). Additionally, the total number of deals had continuously increased between 2019 and 2020 Source: Crunchbase funding rounds (top 20 investors in number of deals); Atlantico analysis
45 -66% decrease in late-stage funding between Q4 2021 and Q2 2022 -35% decrease in early-stage funding between Q4 2021 and Q2 2022 -67% decrease in seed-stage funding between Q4 2021 and Q2 2022 Early Stage* Angel-Seed Q2 2022 $1.0 $0.2 Q4 2021 $1.5 $2.9 Q3 2021 Late Stage* $0.3 $3.5 $1.6 $1.1 $1.7 $1.7 $0.6 $1.3 $0.4 $5.0 Q2 2021 Q1 2022 $0.2 Recent Trends Venture funding slowdown was first felt in the later stages but has started to trickle down to early stage and seed Latin American investment volume by stage Investment amount in US$ B Note: (*) Early Stage considers Series A and B private deals, while Late Stage considers Series C+ private deals Source: Crunchbase News “LatAm Venture Investment Shrank Q2 2022 Monthly Recap” (2022)
46 57% 40% 11% 5% 40 20 10 25 0 30 35 5 15 Scared Cautious Concerned about job security Optimistic or excited Looking ahead to 2023, the mood among tech workers in Latin America can be said to be “cautiously optimistic” Feelings about the upcoming year in the tech market % of survey respondents by sentiment + Atlantico and Vertico conducted primary research with 200+ tech workers in Latin America of varying seniority Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
47 Unicorn founders' sentiment and plans Average of respondents, % respondents 50% 33% 37% 36% 26% Shrink and emerge weaker Be agressive and emerge stronger against competition Reduce burn and emerge stronger 5% End up as write-offs or firesales Need to do down rounds or raise at lower valuations 4% 9% Own Company Most Unicorns When asked how they feel about the next 2 years, on a scale of 1 to 10, unicorn founders presented an average sentiment of: 7.3 Excited about market and business prospects Afraid about market and business prospects Atlantico’s annual gathering for all Brazilian Unicorn founders and CEOs Goal: Promote industry discussion and strengthen community among the most valuable private tech companies of Brazil Off-the-record discussions of critical industry and leadership topics; during the event Atlantico surveyed unicorn founders on various key themes Source: Atlantico Survey with founders of 17 Brazilian unicorns (out of the 18 in the country), collected in August 2022 View from the Top: Brazilian Unicorn founders shared a measured optimism at Atlantico’s Good View Summit 0% 0%
48 Early-stage company founders' sentiment Average of respondents’ selection Founders’ expectations for their companies (next 1-2 years) % of respondents When asked on a scale of 1 to 10 their feeling towards the financing market in the next 1-2 years, early-stage companies displayed an average sentiment of: 42% 9% Believe to be in a position of strength and will win against competitors In survival mode, cutting costs and preparing for the worst Not changing previous plans Believe that after some adjustments will be in a great position to raise more money 47% 2% Source: Atlantico Survey, collected in June 2022 (n = 45 early-stage companies) Not Just Unicorns: Founders at every stage recognize the market downturn but feel they won't be hit as hard as peers 5.4 10 - Very optimistic 1- Not optimistic
49 Size of tech company layoffs1 % of employees estimated to have been affected by layoffs 80% 15% 3% 1% 26-50% of employees > 50% of employees 10-25% of employees <10% of employees 5% 20% 10% % 0 30% 25% 40% 35% Between 6-12 months Between 18-24 months Between 24-30 months Between 30-36 months Between 36-42 months Less than 6 months Between 12-18 months Expected runway before and after change in market2 After change in market Before change in market Companies with less than 1 year of cash adapted plans to have at least 1.5 years Companies with more than 1.5 years of cash are aiming to have at least 2 years Source: (1) Runa and Atlantico survey, “The Future of Work in Latin America 2022”, collected from July 4th to Aug 28th (n = 515 HR leaders and employees in 500 companies in Latin America); (2) Canary Cash Burn Study (n = 27 early-stage companies, Seed to Series Bs; Conducted on July 1st, 2022) Companies have responded to market drops by modestly adjusting headcount and only slightly extending runway
50 Main actions taken to preserve cash % respondents 0% 10% 20% 30% 40% 50% 60% 70% Tech stack & 3rd party services optimization Renegotiations / Change of Suppliers Founders’ salary reduction Focus on Unit Economics Refinanced debts Reduction of Marketing Expenses Decreased office space or went fully remote Layoffs / Change in Team Structure Hiring freeze / Slowed down hiring Main departments with layoffs % companies 0% 5% 10% 15% 20% 25% Customer Service People Operations Finance Tech Product Marketing Sales Source: Canary Cash Burn Study (n = 27 early-stage companies, Seed to Series Bs; Conducted on July 1st, 2022) Headcount reductions were one of many strategies used to preserve cash and were focused on operations and sales
51 2.2 The Latin American Opportunity ” - Tom Jobim “Living abroad is good but sucks; living in Brazil sucks but is good.”
52 100% 10% 2005 0.1% 2020 1% 2015 2010 India LatAm Brazil USA China 5% 2% 1% 3% 4% 2015 2020 2005 0% 2010 Brazil LatAm Tech penetration grew massively around the world over the past two decades, with Latin America starting much later Atlantico Digital Transformation Index Tech company market cap as % of GDP, log scale Atlantico Digital Transformation Index, Brazil Tech company market cap as % of GDP Brazil is ~10 years behind China (at 2012 levels) Note: HQ location was used to define company region; for all countries we used the average of the respective year’s quarters to calculate GDP and market cap Source: (1) Capital IQ; (2) GDP projections from OECD, log scale; (3) Atlantico analysis China is ~8 years behind the US (at 2014 levels)
53 52% 20% 15% USA 3% 1.5% China India Brazil Latin America Latin America will have massive value creation in the decade to come as it catches up in tech penetration Atlantico Digital Transformation Index Tech company market cap as % of GDP, Q2 2022 Latin America Tech Value Creation Catch-up Potential US$ B Catchup to India Latin America Catchup to China Catchup to USA Latin America +$791 B Latin America +$974 B Latin America +$3.15 T Note: HQ location was used to define company region; for all countries we used the average of the respective year’s quarters to calculate GDP and market cap Source: (1) Capital IQ; (2) GDP projections from OECD; (3) Atlantico analysis
54 Dot.com Bubble Global Financial Crisis 702 459 636 793 1,064 1,217 1,653 1,682 1,266 1,593 1,973 2,270 2.5% 3.0% 1.5% 0.0% 1.0% 2.0% 0.5% 2001 2006 2000 2012 2004 2010 2003 2009 2002 597 2008 2005 2011 2007 Number of Companies that raised a Series A %IPO IPOs based on year of Series A funding Number of companies that raised Series A in the corresponding year and % that went public to date Companies that raised capital in recent market downturns IPO’d at higher rates than those funded in bull markets Source: Pitchbook, Filters: series A, last funding type: IPO, publicly held
55 2021 2022 2021 2022 2021 2022 Latin America United States China 2490 2458 1967 1710 1119 900 650 638 502 448 2253 1946 1475 1108 710 604 484 466 458 416 76 67 65 60 41 39 33 32 32 23 77 64 62 58 58 50 39 34 31 31 422 378 310 240 190 169 159 157 156 138 588 447 354 243 235 225 205 171 156 138 Largest companies in Latin America Market capitalization in US$ B The largest companies in Latin America are still “real economy” companies rather than tech companies Source: Capital IQ, data extracted August 4th, 2022, 2021 market capitalization corresponds to 9 months prior to that date (November 4th, 2021) and 2022 market capitalization set to 1 month prior to that date (July 4th, 2022)
56 MEXICO BRAZIL COLOMBIA CHILE ARGENTINA ECUADOR 2018 2022 2022 2021 2022 2020 2021 2022 2018 2019 2020 2021 2022 2021 32.1 17.4 7.7 3.7 3.3 2.7 2.3 0.9 0.8 0.6 Inflecting: The growing number of large tech companies in LatAm shows continued value creation from digitalization Largest public tech companies1* Market capitalization in US$ B as of June 30th, Latin America Active Unicorns in Latin America2** Valuation above US$1 B, 2022 Note: (*) A unicorn is a private technology company valued over US$ 1B; (**) Only unicorns that were active at the time are counted, meaning unicorns that had exited (i.e., acquired or went public) – such as Stone, VTEX, Nubank, dLocal, etc. - have not been included Source: (1) Capital IQ, data from June 30th, 2021, (2) Atlantico Analysis
57 $2.9 $4.5 $5.3 $2.6 $8.7 $0.3 $3.0 $6.7 $2.3 $2.1 $0.3 $4.8 $5.1 $0.8 $2.8 Valuation $0.8 $3.7 $0.8 $0.6 $2.5 $1.9 $0.9 $3.0 $2.5 $3.1 $0.5 $4.3 $2.3 $2.0 Total Capital Raised $3.9 Valuation and total equity capital raised of the 10 highest valued Latin American unicorns* US$ B Top 10: The highest valued Latin American unicorns collectively raised $9B and are worth $42B in total Note: (*) Unicorns refer to private technology companies with a valuation of over US$ 1B, with valuations being based on the latest round prior to Aug. 19th, 2022 Source: Atlantico Analysis, PitchBook, Crunchbase, Companies Market Cap
58 21% 16% 16% 11% 8% 29% Other Big Tech Startup Industry & Corporate Consulting Finance Tech Talent Pool Entrepreneurial Ambition Students’ most desired areas to work in the short-term2 % of survey respondents Entrepreneurial aspirations among students % of respondents who have plans to found startups 20% 9% 12% 34% 25% Yes, in the next 4 years Not sure No Yes, 5-10 years from now Yes, 10+ years from now Atlantico conducted primary research with nearly 300 students from 60 universities to understand their career aspirations Flight to Tech: Top university talent continues to seek tech jobs above all others despite recent market turbulence Note: “Other” category’s main areas include Research and Academia (6%), Medicine (5%), Law (5%), Government (4%) and non-profits (3%) Source: Atlantico Study, June 2022 (n = 279); 111 students in 20 universities in Brazil, 168 Latin American students in 40 universities abroad
59 Latin America Digital Transformation Report 2022 1. The Foundations 2. A Changing Landscape 3. Opportunities Ahead
60 3.1 FINTECH While Financial Services is still the top category for LatAm venture investment, there is a shift underway from B2C to B2B fintechs. Initiatives like Open Banking, Pix, and Open Finance are increasingly gaining traction and are poised to bring lasting changes 3.2 SMB DIGITALIZATION SMBs constitute over 95% of businesses in LatAm, but growth and productivity are stymied by low digital maturity. To address this gap, startups tailored for SMBs emerged, tackling these pain points related to limited access to capital and inefficient backend management 3.3 WEB3 & CRYPTO Latin America’s unique socio-political challenges over the last few years have set the stage for innovative web3 solutions. This explosive growth is evidenced by the existence of over 100+ web3 startups in Latin America, across many verticals 3. Opportunities Ahead Latin America Digital Transformation Report 2022
61 3.1 Fintech ” - ABBA “All the things I could do if I had a little money”
62 49% did not borrow any money in 2020 >300MM people1* 26% are still unbanked >150MM people1** Is the ranking of the highest-ranked Latin American financial center (Mexico City, Mexico) in the latest GFCI2 #60 $1.1 Other $0.5 $1.4 42% $4.0 $0.7 $6.1 Super Apps $0.5 Edtech 3% HRtech 7% Fintech 3% Logistics 10% 5% Proptech 3% E- commerce $0.4 27% Financial Services remains the top category for venture investment in LatAm given the continued large opportunity Percentage of Latin Americans over age 15 who… VC Investment by category in Latin America, 20213 US$ B and % of total venture capital investment Note: (*) For reference, this percentage is equal to 24% in the US. (**) For reference, this percentage is equal to 5% in the US and, for this analysis, unbanked is considered not having an account in a financial institution Source: (1) The World Bank, “Global Findex Database 2021” (2022); (2) Z/Yen, “Global Financial Centers Index” (2022); (3) Latin American Private Equity & Venture Capital Association, “LAVCA Trends in Tech” (2022)
The fintech (r)evolution in Latin America is expanding its reach in full force Wave 1: B2C Fintech Innovation Wave 2: B2B Fintech Innovation Building blocks Central Banks around LatAm have been key to the evolution of fintech, with open banking and instant payments Infrastructure has evolved rapidly to match changing customer expectations and accelerate the digital revolution “The secret to success is to do the common things uncommonly well.” - John D. Rockefeller The first wave of fintech was defined by disruption of traditional B2C models and inclusivity “History never repeats itself, but it does often rhyme.” - Mark Twain Now the same high standards are being pursued in transforming B2B models
64 In March 2022, the Central Bank launched its Open Finance Project to transform FX, investments, insurance, and pension as Open Banking is doing to traditional banking services BRAZIL CHILE In August 2021, the Chilean Ministry of Finance published guidelines for a regulatory framework that promotes the development of Open Finance COLOMBIA Guidelines for Colombia’s Open Finance system are expected to be published soon after public consultation ARGENTINA Transfers 3.0, the country’s real-time payment scheme, was launched in November 2021 Successful Open Banking API calls in Brazil2 Millions Reduces the cost of financial services by democratizing access to customer data Paves the way for new businesses by enabling new models and reducing incumbents’ data access advantage 0.7 5.3 5.4 96.4 360.7 Jun-22 Feb-22 Oct-21 Jun-21 Feb-21 As Open Banking & Finance gains relevance in LatAm, it is expected to bring continued innovation and changes Open Banking’s effects on traditional finance Current state of Open Banking & Finance1 2022 Source: (1) Belvo “The state of open banking in Latin America in 2022” (2022), Ministerio de Hacienda y Crédito Público de Colombia, Ministerio de Hacienda de Chile, Banco Central do Brasil, Banco Central de la República Argentina, Atlantico Analysis; (2) Open Banking Brasil
65 Pix, a brief history of the future Pix is Brazil’s instant payment system. It is free to use, available 24/7, and can be used by individuals, businesses, and the government. Launched in November 2020, Pix has taken Brazil by storm. Pix was developed by the Brazilian Central Bank in partnership with private financial institutions. It is integrated into the apps of banks and digital wallets with high visibility to the user, as required by the Central Bank. From the users’ perspective, they only need to register a unique key to use Pix. This key can be one’s phone number, e-mail address, tax ID number (CPF), or a randomly-generated code. Each key is tied not only to one unique individual or business, but also to a single financial institution and account. This allows users to have different keys for different banks and accounts. To pay with Pix (or ‘make a Pix’ in the new colloquialism), a user taps the Pix button or link in their financial institution’s app, fills in the receiver’s unique key, the amount to be paid, an optional note, and securely confirms the transfer. The whole process can also be completed by scanning a QR code, now as ubiquitous in Brazil as the street vendors that happily use them. Pix. It’s that simple.
66 Number of transactions by digital payments in Brazil Billions 30 274 475 624 785 889 934 986 Mar-22 Aug-22 Mar-21 Jul-22 Nov-20 Jun-22 Jul-21 Nov-21 33x TED Other Boleto + Convênio Pix Q1 Q4 3.9 Q3 2.9 1.9 4.3 Q1 Q2 3.0 3.5 0.9 Q4 Credit Card 0.0 Q2 0.2 Debit Card Q1 2.8 3.0 Q4 Q3 2.8 Q3 Q1 Q2 2.5 2019 2020 2021 2022 Pix is eating digital payments in Brazil Pix total payment volume R$ B Note: (*) The US Dollar to Brazilian Real exchange rate on August 12, 2022 was 5.08 and averaged 5.12 in 2022 Source: Banco Central do Brasil
67 Pix is eating digital all payments in Brazil Pix is tied with cash for daily frequency of use in Brazil % of population 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 35% 34% Pix Cash + Source: Atlantico and AtlasIntel Brazil survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=2,262, 2p.p margin of error at 95% confidence level)
68 1.0 75 2.0 5.9 11 20 0.0 Months Post-Launch Pix took just 11 months to reach 1B transactions per month, which is ~1/4 as long as it took UPI to reach the same number UPI (India) Pix (Brazil) Pix’s adoption has significantly outpaced the early traction of India’s UPI, which was launched 4 years earlier Monthly transaction volume by number of months post-launch1,2 Billions Source: (1) Banco Central do Brasil; (2) National Payments Corporation of India
69 4.2 9.0 9.5 5.0 2.0 0.5 9.0 8.5 8.0 4.0 2.5 6.0 5.5 7.5 0.0 4.5 3.5 7.0 3.0 6.5 1.5 UPI Pix 2x Pix is already used by most of the Brazilian population and at a much higher frequency than UPI in India Per capita monthly transaction volume, June 20221,2,3 # of transactions Number of Pix users1* Millions 39 76 96 108 116 122 Aug-22 Jul-21 Mar-21 Nov-21 Mar-22 Nov-20 50% of Brazilians Note: (*) Excluding registered businesses Source: (1) Banco Central do Brasil; (2) National Payments Corporation of India; (3) World Bank
70 Post-launch features released Pix integrates with phones’ contact list Select types of Pix transfers are capped at R$1000 between 8:00pm and 6:00am, citing safety concerns QR codes enable Pix users to make transfers at a faster rate Two new Pix modalities, Withdrawals (Saque) and Change (Troco), enable consumers to exchange Pix transfers for cash at stores Features to come Collection (cobrança) will enable businesses to generate dynamic QR codes for Pix payments that include information such as value and due date, potentially replacing boletos** Guaranteed (garantido) will enable consumers to use Pix for installment payments, as they would with a credit card, by having their financial institution guaranteeing the payment New forms of payment initiation, including NFC, Bluetooth, RFID and facial recognition International (internacional) will enable Pix to be used for international transfers Reinforced by its prompt adoption, Pix has an extensive roadmap of features that will unlock new opportunities Note: (*) Up until June 31st, 2022; (**) Boletos are a popular cash-based post-pay method in Brazil Source: Banco Central do Brasil, Atlantico Analysis
71 45% 41% 41% 38% 55% 59% 59% 62% Business Aug-22 Feb-21 Aug-21 Personal Feb-21 115 105 89 123 63 131 Personal Aug-22 126 11 Nov-20 10 Feb-22 Aug-21 98 137 15 114 83 9 May-21 121 107 7 Feb-21 58 Nov-21 8 May-22 1 Business 4 6 14 Pix had its early adoption driven by individuals and is now increasingly being used in business transactions Total registered accounts by type of user* Millions Payment value volume by transaction nature % Note: (*) In this case, “accounts” means keys, which are payment addresses that can each be linked to one sole bank account at a time by a Pix user Source: Banco Central do Brasil
72 Fintech Infrastructure companies have accelerated the flywheel of innovation in the sector By reducing the cost (money and time) to launch a fintech, infrastructure companies have enabled both new B2C entrants but also the current B2B wave “The most radical and transformative of inventions are often those that empower others to unleash their creativity – to pursue their dreams.” - Jeff Bezos act as a bank make and receive payments If you want to… Fintech Infrastructure
73 Dock as a payment institution1* Total payment volume and active accounts 5.20M 2.60M 2.60M 2022** R$ 10B 2.07M 2021 2018 R$ 389k 2020 R$ 50.6B 2019 R$ 722M 29k 435k R$ 88.4B Dock, one of the most recent unicorns in Brazil, offers the infrastructure for companies to integrate card issuing and processing, digital banking, and risk & compliance A leading provider of fintech infrastructure in Latin America, Dock dematerializes finance to unlock business potential Active accounts H2 2022 forecast Total payment volume Dock as a card provider1,2 Card transaction volume in R$ B and % of total volume in Brazil R$ 51.1B R$ 28.9B 2022** 2021 4.7% 93.8M 5.9% 93.8M R$ 123.7B 2.6% R$ 187.6B 2020 2019 1.6% Absolute value (R$ B H2 2022 forecast Market share Note: (*) Active accounts are those with cashout in the last 30 days, 2022 data is reflective of June 30th of that year, and the US Dollar to Brazilian Real exchange rate on August 12, 2022 was 5.08 and averaged 5.12 in 2022; (**) Actual values for H1 2022 were doubled to estimate full year equivalent Source: (1) Dock internal data; (2) Associação Brasileira das Empresas de Cartões de Crédito e Serviços
74 100 429 371 279 217 Jun-22 121 322 Jul-22 Mar-22 Apr-22 May-22 Feb-22 Jan-22 15 18 31 43 49 57 67 Jun-22 Jul-22 Apr-22 Feb-22 May-22 Jan-22 Mar-22 Pomelo offers a regional cards and payments infrastructure for fintechs to launch and scale in Latin America Pomelo number of business customers Pomelo allows companies to offer prepaid, debit, credit, crypto and corporate cards to over 450M people in 5 markets. Pomelo contracted annual recurring revenue Indexed to January 2022 (=100) Source: Pomelo internal data
75 Neon Santander C6 Itaú Nubank Bradesco Banco de Brasil 57% of small business respondents1 bank at these four traditional banks Traditional Banks Challenger Banks 51% 59% 63% 70% 64% 74% 49% 41% 37% 30% 36% 26% 2020 2019 2016 2017 2015 2018 Average or Worse Very Good or Good -20 -38 9 -16 44 2 0 While B2C offerings improved, B2B customers remained dissatisfied with the incumbent financial service providers Net Promoter Score by bank in Brazil, 20211 Brazilian small business’ banking satisfaction2 % of total respondents Source: (1) Idwall “Melhor Experiência Digital” (2021); (2) Serviço Brasileiro de Apoio às Micro e Pequenas Empresas “Financiamento dos Pequenos Negócios no Brasil” (2020)
76 For example, Nubank is replicating its “unbundling & re- bundling” strategy for B2B with accounts for businesses 1.1 1.4 1.6 Q4 2021 Q1 2022 Q3 2021 46% of Nubank’s SME customers were first-time users of financial services Many other digital banks also offer accounts for businesses B2C innovation coupled with evolving fintech infrastructure have energized entrepreneurs to target B2B needs Nubank number of business accounts1 Millions cards & spend management Examples of B2B fintechs in Latin America payments banks B2B2C insurance Source: (1) Nubank SEC F-1 (2021) and Q1 2022 Earnings Presentation (2022); (2) Banco Central do Brasil “Relatório de Economia Bancária” (2020)`
77 Jul-22 53 118 181 268 367 523 672 6,343 3,485 2,873 2,232 5,682 4,300 5,133 1,290 803 1,800 1,014 100 179 295 327 416 540 674 4,188 Mar-22 Jul-21 Jan-22 May-22 Nov-21 Sep-21 1,541 2,018 2,622 3,337 1,129 844 Mar-21 Aug-21 Mar-22 Aug-22 Clara offers companies an end-to-end spend management platform and exemplifies the current B2B fintech movement Clara, active in Mexico, Brazil, and Colombia, is a leading corporate credit card, payment solution, and expense tracking platform for businesses Clara number of onboarded companies Clara total payment volume Indexed to July 2021 (=100) Source: Clara internal data
78 “Humans are tool builders. We build tools that can dramatically amplify our innate human abilities.” 3.2 SMB Digitalization ” - Steve Jobs
79 Peru Colombia 1% 93% 85% 90% 5% 2% 9% 1% 13% Brazil UK 14% 1% US 82% 6% Mexico 3% 79% 1% 17% 95% 3% Micro Medium Small Large 60% 50% United States3 Europe4 50% 56% 40% Latin America2 75% 25% China5 44% SMBs* Large companies LatAm has a higher proportion of SMBs, although they contribute significantly less to GDP than in other regions Distribution of businesses by size per country1 % of all businesses Contribution to GDP by business size % of GDP Note: SMB means Small and Medium Businesses Source: (1) OECD, Financing SMEs and Entrepreneurship (2022); (2) IDB, ”MSME Financing Instruments in Latin America and the Caribbean During COVID-19“ (2020); (3) U.S. Small Business Administration, “Small Businesses Generate 44 Percent Of U.S. Economic Activity” (2019); (4) European Commission. “Unleashing the full potential of European SMEs” (2020); (5) Pingan, “China’s SMEs Amid the Pandemic” (2020)
80 $81 United Kingdom $28 $62 Mexico $77 $27 $94 $61 $36 $90 $42 $50 $88 $87 $62 $103 Germany Spain Brazil +243% +77% +45% +68% +42% Large (250 or more workers) Small (10-49 workers) Medium (50-249 workers) One reason they contribute less to GDP is lower productivity levels for Latin American SMBs Labor productivity by firm size, business economy* Value added per person employed, US$ k Note: (*) The “business economy” covers mining and quarrying, manufacturing, electricity, gas, steam and air conditioning supply, water supply, sewerage, waste management and remediation activities, construction and business services (excluding finance and insurance activities) Source: OECD “OECD Compendium of Productivity Indicators” (2021)
81 STAGE 1 DIGITAL INDIFFERENT STAGE 2 DIGITAL OBSERVER STAGE 3 DIGITAL CHALLENGER STAGE 4 DIGITAL NATIVE SMB Digital Maturity Index (DMI) Singapore UK USA Germany Japan New Zealand Australia Thailand India Hong Kong Taiwan France Korea Mexico Brazil Chile Philippines Indonesia Vietnam Little to no digital efforts and skills Digital efforts in progress but tactical A digital strategy exists, but short-term Holistic strategy to digitally innovate Description 55% 1% 44% 0% Latin America 6% 55% 32% 7% United States 9% 53% 32% 6% Western Europe To be more productive, SMBs in Latin America must achieve greater digital maturity, leading to economic growth Small business digital maturity curve Countries categorized according to digital maturity index Canada China Note: The study examines eight countries throughout June 2020 (United States, Canada, Mexico, Brazil, Chile, United Kingdom, Germany and France) to better understand the opportunities and challenges small businesses currently face and the correlation between digital maturity and faster recovery Source: Cisco “2020 Small Business Digital Transformation” (2020)
82 When analyzing SMBs across Latin America, we find that 4 pain points have shaped the emerging tech ecosystem Limited access to capital and financial services Dependance on business management processes that are still largely manual Limited access and negotiating leverage vs. major suppliers Difficulty driving sales and building a loyal customer base
83 $483 $164 $39 $8 $8 $86 $6 $4 $21 Country Concentration Access to Debit Cards Access to Credit Cards Underbanked Brazil Top 5 banks: 80% 70% 33% 33% Mexico Top 5 banks: 69% 37% 30% 50% Colombia Top 5 banks 77% 52% 26% 32% 30% 35% 27% Caixa Banco do Brasil Itaú Bradesco 26% 29% Santander Success rate in obtaining credit with Brazil’s major banks4 % of small businesses that were able to obtain credit MSME* Finance Gap compares the estimated “potential demand”** for financing by MSMEs in emerging economics to the current supply of financing2 SMBs in Latin America face great difficulty in accessing capital, creating a substantial financing gap Micro, Small and Medium Enterprises Finance gap1 Finance gap in US$ B Current banking system organization3 % of population Note: (*) MSME is an acronym for Micro, Small and Medium Enterprises; (**) The notion of potential demand expresses the amount of financing that MSMEs would need, and financial institutions would be able to supply if they operated in an improved institutional, regulatory and macroeconomic environment. Source: (1) World Bank “MSME Finance Gap” (2) SME Finance Forum “MSME Finance Gap”; (3) a16z “Latin America’s Fintech Boom” (2021) (4) Sebrae “O impacto da pandemia do coronavírus nos pequenos negócios – 11ª edição” (2021)
84 Cora active customer base* Number of customers, thousands 4 14 39 71 136 206 February 2022 October 2021 October 2020 June 2021 June 2022 February 2021 52x Cora total monthly transaction volume R$ M 34 245 931 1,749 2,908 5,254 February 2022 June 2022 February 2021 October 2020 October 2021 June 2021 155x Cora is a Brazilian company focused on financial services for SMBs, a large and underserved market opportunity Business Model: Complete financial solution for businesses, providing freedom to charge and receive without bureaucracy and manage all expenses in a single place Digital business account (free account, with lower taxes and bureaucracy) Credit and debit cards for businesses (physical & digital, practical and with no annual fee) Integrated financial management (issue boletos** for free & integration with ERPs) Note: (*) Active customer base is defined as clients that completed at least 1 transaction in the last 30 days; (**) Boletos are a popular cash-based post-pay method Source: Cora internal data
85 106 B 1.5 T Total B2C Retail E-commerce B2C (7% share) 24 B 2.4 T Total B2B Retail B2B online (1% share) Online market penetration by country 7% 21% 25% 1% 14% 32% 20% 26% 32% 29% Middle East and Africa Latin America 37% Western Europe Asia Pacific North America 26% Central and Eastern Europe B2C B2B While e-commerce volumes have increased substantially in Latin America, B2B online sales still have room to grow Growth in E-commerce Sales by region, 20201 % change, YoY Brazilian E-commerce and Total Retail Market Size, 20212 Market size in R$ B2C B2B Source: (1) eMarketer “Latin America will be the fastest-growing retail ecommerce market this year” (2020); (2) InfraCommerce IPO Preliminary Prospectus (2021)
86 Vertical-focused B2B marketplaces have emerged to offer better prices and superior shopping experiences B2B marketplaces by OLX category and even more… Food & beverages Procurement Construction OLX is the largest classifieds website in Latin America, akin to Craigslist in the US
87 Olist is a Brazilian unicorn with a full-suite solution to help SMBs drive sales online Business Model: Providing SMBs with the necessary tools to create their online business as well as ideal solutions to take it even further, including offerings such as Web design features Sales channels integrations Product and sales management ERP & Invoicing Reports and KPIs CX to promote conversion Olist active seller base Indexed to 2018 (=100) Brazil eCommerce market and Olist net revenue Indexed to 2018 (=100) 100 151 320 395 2022* 2021 2018 2020 2019 213 100 179 1,752 100 206 281 335 2019 2022(e) 2021 2018 2020 341 123 1,076 Marketplace integrations eCommerce market Olist net revenue Since 2020, Olist’s SMB-driven revenue has outpaced the overall eCommerce market growth by ~6x Note: (*) Result is the sum of actual values up to July 2022 and forecasted for the remainder of 2022, estimated by company Source: Olist internal data
88 Excel or sheets ERP system Pen and paper Use of software for financial tasks2 % of respondents, Brazilian SMBs (Jun 2020) Automation of business processes3 % of respondents, Brazilian SMBs (May 2021) 61% 24% 15% 45% 22% ERP system 62% Business management system 63% 54% Payment system Financial management system Accounting system 27% 33% Digitize and integrate business processes 46% 2% Collect and store data for customer relationships 52% Technology to understand what value is to your customer Collect and store data regarding supply chain 49% 23% 28% 19% 55% 40% 26% Implemented Partially implemented Not implemented Business process management is still mostly manual, making tasks prone to error and extremely time consuming Primary tool used to control expenses1 % of respondents, Brazilian SMBs (Dec 2019) Source: (1) Capterra/Gartner; (2) Capterra “Pesquisa sobre adoção de fintechs a partir de open banking” (2020) (3) Agência Brasileira de Desenvolvimento Industrial “Maturidade Digital das MPEs Brasileiras” (2021)
89 100 119 154 188 207 258 319 357 422 481 Apr -22 Jan -22 Jul -21 Jul -22 Apr -21 Jan -21 Jul -20 Apr -20 Oct -21 Oct -20 Fudo monthly active restaurants Indexed to April 2020 (=100) Fudo average gross merchandise value per restaurant* Indexed to M0 (=100) 121 131 140 145 153 160 165 167 172 174 M5 M7 M4 M9 M8 M3 100 M2 M6 M10 M0 M1 Fudo, a vertical software platform, is a one-stop-shop for restaurants looking to increase both sales and efficiency Business Model: A single SaaS solution for the food industry across LatAm that allows clients to manage their business by using multiple functionalities including: Sales Expenses Products Suppliers Clients Reports & KPIs Delivery Note: (*) M0 corresponds to the first full month after onboarding Source: Fudo internal data
90 3.3 Web3 & Crypto - Satoshi Nakamoto “If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.” ”
91 Cryptocurrencies, DeFi protocols, and Non-Fungible Tokens (NFTs) are new technical solutions with use cases that could be applied to acute challenges in Latin America Store of value Fighting inflation and currency devaluation (and controls) by holding crypto Ownership Helping creators monetize and allowing consumers to own a piece of creations and experiences through NFTs Medium of Exchange Allowing people to receive cross-border payments and remittances faster and with fewer fees
92 Hyperinflation has historically plagued countries such as Argentina, Brazil, and Peru. Argentina is back to grappling with its ghost1 Remittances received in Mexico have achieved an all-time high volume with no signs of slowing down, yet are still expensive3 Currency devaluation (and controls) is also another visible historical challenge in the region Venezuela has faced this recently as a consequence of political instability2 Inflation in Argentina (%) Venezuelan Bolivar devaluation (%) – indexed to value in 2019 Remittances received in Mexico US$ MM 30 35 40 45 50 55 60 65 Q1 2022 Q2 2020 Q3 2020 Q2 2021 Q1 2020 Q2 2022 Q3 2021 Q4 2021 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2020 Q1 2021 0 10 20 30 40 50 60 70 80 90 100 110 Jan-21 Jul-20 Jan-22 Jan-20 Jul-22 Jan-19 Jul-19 Jul-21 -99.94% 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 2017 2018 2019 2020 2021 Latin America’s history of economic and political uncertainty creates fertile ground for web3 to thrive “Inflation: Argentina’s interminable nightmare” August 6, 2022 “Venezuela subtracts six zeros from currency, second overhaul in three years” October 1, 2021 “Remittances to Mexico again break record on back of strong U.S. labor market” September 1, 2022 Source: (1) Trading Economics; inflation Argentina; (2) Trading economics, indexed at Jan 2019 value, vs. US dollar – numbers don’t account for 6 digits government adjustment in 2021, to better compare trend; (3) Knomad/WorldBank “Inward Remittance Flows May 2022” (2022)
93 The crypto market in LatAm is significant when compared to the stock market, but still with a lot of room to grow 96% 4% No Yes Percentage of people who own cryptocurrencies, Brazil1 % of survey respondents Brazilians who invest in the Brazilian stock market, June 20222 % of population with open Brazilian brokerage accounts 98% Open Brokerage Accounts 2% Source: (1) Atlantico and Atlas Intel Brazil survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=2,262, 2% confidence interval) Question: Do you own cryptocurrency?; (2) B3 “Pessoas Fisicas Uma análise da evolução dos investidores na B3” (June 2022)
94 BRAZIL The Brazilian Central Bank announced that a pilot of the Digital Real will go live in the second half of 2022 MEXICO Banxico announced it will launch its digital currency in 2024 CHILE Central Bank of Chile is currently conducting research and will decide by the end of 2022 COLOMBIA BanRep is currently considering the integration of a digital currency and conducting research ARGENTINA Has deprioritized the issuance of a digital currency but continues to study the subject EL SALVADOR Although not a CBDC, Bitcoin became legal tender* in the country in 2021 CBDCs are “Central Bank Digital Currencies” digital currencies issued, centrally managed, and fully regulated by Central Banks through digital wallets in a fully virtual sphere There is no universal case for CBDCs because each economy is different. In some cases, a CBDC may be an important path to financial inclusion (...) in others, a CBDC could provide an essential backup in the event that other payment instruments fail. - IMF Press Center Governments in LatAm are also embracing crypto, starting with CBDCs, to fight some of their challenges Note: (*) Legal tender means that currency is recognized by law as a means to settle a public or private debt or meet a financial obligation, including tax payments, contracts, and legal fines or damages (Investopedia) Source: Atlantic Council, accessed on 07/04/2022
95 CloudWalk total payment volume Indexed to January 2019 (=100) In November 2021, CloudWalk issued the BRLC, the Brazilian Digital Real – a stablecoin pegged to the Brazilian Real. Their InfinitePay solution offers BRLC as cashback for every transaction 100 752 24,867 145,735 Jul-19 Jan-21 Jan-22 Jan-19 Jan-20 Jul-21 Jul-20 Jul-22 72,603 125,508 40,273 8,323 CloudWalk is disrupting payments through blockchain, offering clients a faster, more secure, and cheaper service 142k+ Token Holders 2.4MM Transfers CloudWalk is a Brazilian fintech that enables SMBs to avoid high transaction costs through InfinitePay, a blockchain-based financial platform with its own stablecoin Source: CloudWalk internal data
96 3.0 2.4 1.9 1.3 5.5 Q3 Q2 Q1 Q4 1.1 5.2 Q3 Q1 3.7 Q2 Q4 4.5 Q3 0.2 1.1 1.1 2.1 2022* 3.2 2020 2019 2021 Fast-growing crypto unicorn Bitso is increasingly serving remittance needs by offering a cheaper and faster alternative Number of users among all products1 Millions Total payment volume for international transfers1 US$ B Bitso is a Mexican cryptocurrency platform whose mission is to make crypto useful. They allow users to transfer, send and receive cryptocurrencies safely and easily, regardless of where they are in the world 2020 2021 2022 Between January and May 2022, remittances in Mexico reached an accumulated total of US$ 22.4B2, of which Bitso processed 4.5% Note: (*) Bitso processed US$2.1B in remittance volume up to September 10th, 2022. If we assume growth rate for June and July 2022 moving forward, Bitso is forecasted to process an accumulated total of US$ 3.2B by the end of the year Source: (1) Bitso internal data; (2) Banco de México Ingresos y Egresos por Remesas (May 2022)
97 20% Mexico 41% 29% Colombia Brazil Population who Purchased a Product Because a Creator Promoted it and Monetization amount, Brazil* % total respondents, % of total surveyed creators LatAm NFT marketplaces 23 25 19 18 14 No Income $1-$100 $100-$200 $200-$500 More than $500 Sticky allows creators to sell to collectors in a marketplace and earn up to 50% of net initial sales Tropix is a marketplace connecting artists and collectors Xave market is a music, art, and sports NFT marketplace Minteo is an NFT marketplace with artists and creators from Latin America Despite their influence, content creators in LatAm struggle to monetize, with blockchain companies offering a solution Note: (*) Original study conducted in R$ where US$1 = R$5.20, monthly amount Source: Statista Global Consumer Survey 2021, Question: “I have bought products because celebrities or influencers advertised them”; Atlantico Digital Influencer Survey (August 2021), Conducted with 5,182 Influencers
98 $10.7 $7.3 Q1 2022 Q4 2021 $6.7 $6.8 $0.4 Q3 2021 Q2 2022 Q2 2021 OpenSea monthly volume, Global1 US$ B Fingerprints number of members2 105 219 229 238 245 248 252 May-22 May-21 Jan-22 Jul-22 Jul-21 Sep-21 Nov-21 Mar-22 116 8 195 FingerprintsDAO is a global Decentralized Autonomous Organization (DAO) focused on championing blockchain art by collecting NFT artwork. The DAO is one of the largest holders of Autoglyphs*, the first fully on-chain, long form “generative art” OpenSea is the world’s largest NFT marketplace Note: (*) Autoglyphs are a completely self-contained mechanism for the creation and ownership of an artwork, being an experiment in generative art, each one unique and created by code running on the Ethereum blockchain. Source: (1) Dune “OpenSea” (2022); (2) Dune “FP Members” (2022) In the broader NFT space, Latin Americans are also at the forefront of global thriving projects such as FingerprintsDAO Founding group consists of 10 Brazilians and 1 American
99 Rising interest in web3 is evidenced by the existence of over 100 startups in LatAm across several verticals Mango Labs* is a Latin American hub focused on all things web3 in the region Source: Mango Labs, *https://www.mangolabs.xyz
100 Rio de Janeiro has embraced web3 and fostered a budding hub to rival regional leaders like Buenos Aires In an application of a prominent use case (membership) for NFTs, Hashtown members get access to The Club through NFTs based on AI-generated art works in the style of notable Brazilian artists Rio has hosted multiple relevant web3 conferences and gatherings along 2022 like Ethereum Rio and NFT.Rio Rio tech and web3 scene has been flourishing, catalyzed by community gatherings and government initiatives Hashtown is a members-only club in Rio fostering a community centered on innovation and culture Rio’s city government has been engaged in web3 with the mayor frequently present at events, and projects to evaluate accepting bitcoin for taxes and for reserves
101 + + Appendix Last, but not least + +
102 + + + + 1.1 Socioeconomic Foundations Appendix Slides
103 0 10 5 12 8 16 4 15 20 Chile Latin America & the Caribbean GDP per capita (in US$ k) GDP (in US$ T) Mexico Brazil Colombia India Argentina China 30 45 15 60 25 24 US and Canada 5 2 Sub-Saharan Africa 2021 2016 Latin America 5 2010 Middle East and Central Asia Euro Area Population Size Latin America & the Caribbean Emerging Economies Global economic activity, 2010-20211 GDP in current prices US$ T Comparison of global economy sizes, 20211,2 GDP, GDP per capita and population size Latin America’s GDP totals US$ 5T and represents 9% of the global economy Source: (1) International Monetary Fund; (2) World Bank
104 301 200 157 124 74 238 166 142 106 100 85 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 India Argentina Mexico 120 China Brazil 120 US Most of the largest economies in Latin America are expected to recover their GDP to pre- pandemic (2019) levels by the end of the year LatAm GDP growth has historically been slower and more volatile compared to that of other emerging economies Note: (*) This variability can be explained, in part, due to changes in foreign exchange rates. For example, although Brazil’s 2021 nominal GDP in current US$ was 73% of its 2020 value, it has gone from R$ 7.2T to R$ 7.4T while the US$-R$ exchange rate has roughly increased from 1.7 to 5.1 over the same time period Source: World Bank GDP by country (nominal, current US$)* Indexed by country to 2010 (=100)
105 48% 63% 15-24 years 25 years and over Labor informality rate in Latin America by age group, 20162 % of total employment The youth informality cycle is self-perpetuating1 Youth can only find informal employment Informal work’s high turnover leads to intermittent employment Informal work lacks learning opportunities Youth lacks stable, substantial work experience 7% 25 years and over 15-24 years 20% Unemployment rate in Latin America by age group, 20211 % High labor informality disproportionally impacts younger people, derailing their career progression over time Source: (1) International Labour Organization “2021 Labour Overview Latin America and the Caribbean” (2021); (2) International Labour Organization “Women and Men in the Informal Economy: a Statistical Picture” (2018)
106 Difference in life expectancy at birth to the European Union average by location1,2,3 Years 2.1 2.1 1.7 -3.3 -3.3 -3.0 2.0 -5.5 -7.2 -0.8 -5.2 US -2.2 -3.6 -1.1 -5.2 -2.8 -0.1 -0.8 Santiago France Buenos Aires Brasília -4.1 Mexico City Rio de Janeiro -4.2 -8.4 Bogotá Spain -3.6 -4.6 Lima Salvador -4.4 São Paulo Women Men As highlighted by a study published last year in Nature, the “chicken or the egg” dilemma for higher life expectancy and better social environment indicators (e.g., better education and greater access to sanitation) has yet to be answered, but both are strongly associated with each other Life expectancies in the region’s main cities are considerably below the average in Europe Source: (1) Nature Medicine “Life expectancy and mortality in 363 cities of Latin America” (2021); (2) Eurostat “Mortality and life expectancy statistics” (2021); (3) Centers for Disease Control and Prevention “Mortality in the United States, 2020” (2021)
107 In May 2020, Latin America was declared by the World Health Organization as the epicenter of the COVID-19 pandemic Latin America experienced high mortality rates throughout the pandemic, reaching over 1.6M deaths by June 2022 United States Latin America Brazil: 3.2k United States: 3.1k Argentina: 2.9k Colombia: 2.7k Mexico: 2.6k Jan-21 Jan-22 Jul-20 Jan-20 Jul-21 Jul-22 Jul-20 Jul-22 Jan-21 Jan-20 Jan-22 Jul-21 43% 26% 31% 53% Germany: 1.7k Deaths per million by COVID-19 by country Total deaths per million over time Proportion of deaths by COVID-19 by region % of total worldwide deaths Source: Our World in Data “Coronavirus (COVID-19) Deaths”
108 Chile: 90.2% Mexico: 63.1% United States: 67.0% Colombia: 70.2% Brazil: 78.8% Argentina: 83.0% Oct-21 Jul-21 Jan-22 Jan-21 Jul-22 Oct-20 Apr-22 Apr-21 Most Latin American countries began the vaccination process significantly later than the US Apr-22 Jul-22 Jan-21 Oct-21 Jul-21 Apr-21 Jan-22 Brazil Colombia Chile Argentina Mexico By October 2021, all 5 countries had reached around 50% of fully vaccinated people (with Chile having already surpassed 70%) Argentina: 0.2K Brazil: 4.7K Colombia: 0.6K Chile: 0.2K Mexico: 0.8K June 2022 Data Despite a late start, rapid vaccination adoption in Latin America quickly showed positive results in the region Vaccinated people against COVID-19 per country1 % of people fully vaccinated Deaths by COVID-19 per country2 New deaths per month Source: (1) Our World in Data “Coronavirus (COVID-19) Vaccinations” (2022); (2) Our World in Data “Coronavirus (COVID-19) Deaths” (2022)
109 Latin America Europe North America East Asia May-20 Jul-20 Sep-20 Nov-20 Jan-21 May-21 Jul-21 Mar-21 19% 26% 20% 24% 12% 23% 12% 18% 36% Oct-20 Feb-21 Oxford Stringency Index2* Brazil 77 67 70 61 United Kingdom 80 68 88 51 United States 73 63 72 59 Japan 47 35 50 53 The pandemic greatly affected businesses in the region, leading to the closure of over 35% of SMBs in May 2020 Closure rates of SMBs across region1 % of SMBs facing closure Note: (*) The index records the strictness of ‘lockdown style’ policies that primarily restrict people’s behavior. It is calculated using all ordinal containment and closure policy indicators, plus an indicator recording public information campaigns. Source: (1) Facebook “Global State of Small Business Report” (September 2021); (2) Financial Times “Lockdowns compared: tracking governments’ coronavirus responses” (2022)
110 Sub-Saharan Africa Latin America & Caribbean Global South Asia Middle East & North Africa Europe and Central Asia 87 86 89 63 63 70 58 53 51 52 79 13 10 14 2022 2019 2015 12.4 11.7 8.2 6.6 6.4 6.2 4.3 3.6 Middle East and North Africa North America Sub-Saharan Africa Global Latin America and Caribbean Europe and Central Asia South Asia East Asia and Pacific COVID-19 was highly detrimental for education in the region, with learning poverty* increasing by over 25 p.p. Learning poverty globally and by region1* 2015 and 2019 actual values and 2022 Simulation Estimates Learning delay by region given COVID-19 pandemic2 Average months of learning Children in Latin America and the Caribbean experienced some of the longest uninterrupted COVID-19 school closures in the world. There was an average estimated loss of 1.5 years of learning.3 Note: (*) The learning poverty rate measures the proportion of children who are unable to read a simple text with comprehension by age 10 Source: (1) World Bank, UNICEF, FCDO, USAID, the Bill & Melinda Gates Foundation “The State of Global Learning Poverty: 2022 Update” (2022); (2) McKinsey “How COVID-19 caused a global learning crisis” (2022); (3) World Bank, Unicef and Unesco “Two Years After: Saving a Generation” (2022)
111 278 363 Engaged Not engaged +31% The pandemic led to increased mental stress and the rise of platforms that help companies support their employees Average employee tenure by engagement on Zenklub3 Number of days Zenklub is a Brazilian company that offers companies lifelong learning modules, behavioral analytics platform and digital therapy with proven business outcomes such as improvement in employee retention and decrease in absenteeism 17.3% to < 19.2% 22.1% to < 25.4% 25.4% to < 29.2% 29.2% to < 35.0% 35.0% to < 38.7% > 38.7% Prevalence of depressive & anxiety disorders1 Percentage change in prevalence following COVID-19 pandemic In 2021, the average corporate well-being index2 assessed by Zenklub fell to 49.3, well below the ideal threshold, defined at 78 In 2022, the average corporate well-being index of companies evaluated was 61.7; for companies with mental health support initiatives, that number was 21% higher2 Source: (1) Pan American Life “Mental Health in Latin America and the Caribbean, The Silent Pandemic” (2022); (2) Zenklub and UFRJ “Índice de Bem-Estar Corporativo no Brasil” (2022); (3) Zenklub internal study, conducted with tech companies across a 24-month period (n = 3,510)
112 Population priorities in life changes due to the COVID-19 pandemic % of population that reported the COVID-19 pandemic affected the form in which they understand their priorities in life 81% 78% 74% 72% 68% 60% US Argentina Chile Brazil Mexico Colombia The COVID-19 pandemic changed people’s priorities across many countries in the region + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
113 Social and political polarization in Latin America is strong, but less so than what is observed in the United States Perception of conflict between opposing parties’ supporters** % of population Perception of social conflict between economic classes* % of population 36% 31% 29% 36% 31% 29% 34% 20% 33% 33% 17% 31% 25% 38% 32% 19% 34% 34% 5% 11% 6% 13% 18% 6% 100 100 100 Brazil No conflict 100 100 USA Colombia Yes, some Yes, very strong 100 Yes, strong Argentina Mexico Chile 66% 47% 42% 52% 31% 63% 14% 21% 29% 20% 34% 23% 19% 26% 26% 16% 30% 13% 7% 12% 6% 100 100 100 Yes, some Yes, strong USA Mexico Yes, very strong 100 100 Colombia No conflict Chile 100 1% 0% Argentina 3% Brazil + Note: (*) Responses to ‘Would you say there are social conflicts in your country between people in different economic classes?’; (**) Responses to ‘Would you say there are social conflicts in your country between people who support different political parties?’ Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
114 Inflation Crime & violence Poverty & social inequality Population concern with issue by country % of population 61% 29% 26% 60% 46% 61% 29% Brazil 26% 65% 33% 46% Chile 54% 35% Argentina 60% Mexico Chile Argentina World World Mexico Brazil 38% World Mexico Argentina Brazil Chile Inflation, crime & violence, and poverty & social inequality are of concern in many of the largest economies in LatAm Source: Ipsos ”What Worries the World? July” (2022)
115 Population feeling towards rising prices % of population that felt affected by rising prices over the last year 85% 59% 70% 96% 79% 64% 15% 35% 27% 18% 30% 6% 6% Mexico Brazil Colombia 2% 2% Not at all US 3% 3% Chile Very much Argentina Somewhat 0% Populations across Latin America report feeling very affected by recent rising prices + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
116 Brazilian population feeling towards rising prices % of population that felt affected by rising prices over the last year per income level 75% 47% 57% 47% 43% 20% 48% 34% 49% 44% 5% 5% 9% 13% Somewhat Not at all Above R$10k 4% R$3-5k R$2-3k Up to R$2k Very much R$5-10k In Brazil, inflation affected people from all income levels, with the lowest income segment being the most affected + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
117 Population perceived greatest risk to our planet % of population that think of each as the greatest risk to our planet 15% 9% 9% 5% 8% 14% 10% 16% 9% 26% 7% 10% 22% 22% 18% 17% 11% 18% 18% 11% 15% 44% 65% 50% 39% 38% 30% 24% 1% Other I don’t know 3% 4% New pandemics/ diseases Wars and terrorism US 3% Climate change Brazil 3% Argentina The collapse of democracy Mexico 1% 3% Chile Colombia 2% Climate change is thought of as the greatest risk to our planet in the largest Latin American countries + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
118 Population belief in human-caused climate change % of population that believe we are currently seeing climate change and global warming caused by humans 6% 15% 22% 29% 12% 36% 8% 4% 7% 13% 8% 94% 77% 74% 64% 75% 56% No I don’t know US Brazil Argentina Chile Colombia Yes Mexico Most Latin America citizens believe that climate change and global warming are caused by humans + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
119 9% 10% 5% 31% 92% 50% Other Religions Roman Catholic 2010 Unaffiliated 2000 Evangelicals 1991 2020 1980 1970 21 105 1994 2020 5X Religious denomination landscape in Brazil1 Number of Evangelicals in the Brazilian House of Representatives2 The Evangelical Church has gained ground as a driving force in Brazilian society Note: With “Evangelicals” we are referring to ”evangélicos”, who are part of a Protestant Christian movement started in the 17th century Source: (1) Datafolha, Brazilian Census; (2) UOL “Congresso em Foco” (2020)
120 + + + + 1.2 Digitalization Appendix Slides
121 20% 19% 6% 74% 75% 80% 66% 8% 6% 11% 25% Other 1% 5G 3G Western Europe 3% 4% 0% 2% Latin America 4G North America North East Asia 6% 12% 19% 26% 35% 66% 73% 73% 69% 63% 58% 50% 8% 8% 7% 6% 6% 5% 25% 18% 14% 13% 13% 11% 11% 4G 5G 3G 2022(e) 2027(e) 2024(e) 4% 2026(e) 2023(e) Other 2021 1% 2025(e) 2% 5G has increasing relevance today to allow for digital transformation. Up to 10 times faster than 4G, 5G provides greater network security to enable the adoption of novel applications, e.g., the internet of things (IoT), AR, and VR. It also has significant social value by enhancing health systems and infrastructure. 5G in Latin America is projected to make up 35% of mobile subscriptions, unlocking greater digital transformation Subscriptions by network type by region, 2021* % of total subscriptions Subscriptions by network type, Latin America % of total subscriptions Note: (*) Subscriptions refers to lines Source: Ericsson
122 46 57 2 94 2022* 2018 2016 2020* 2014 2012 Pay TV Streaming (OTT**) 8% 10% 19% 50% 21% Digital adoption is especially pronounced in the shift from pay TV to streaming services like Netflix and Disney+ Number of Subscribers by Viewing Format1 MM of people Most Popular Streaming Platforms in Brazil2 % market share, 2022 Note: (*) Projected figures by Ampere Analysis; (**) OTT (Over the Top) refers to any type of video or streaming media offered directly to viewers via the internet Source: (1) LABS; (2) Netscribes
123 97.4 Media Products E-commerce 30.5 Consumer Appliances E-commerce Apparel and Footwear Other E-commerce* Consumer Electronics 2021 2020 38.4 2016 2017 48.6 71.6 Food and Drink 41.0 2018 2019 +17% +42% Growth in “other” category led by sectors like home care and pet care, showing diversification from traditional categories E-commerce has seen higher growth rates in certain sub- sectors, while growth in traditional sectors stagnated Annual E-commerce sales in Latin America by category1 US$ B Note: (*) Categories within “other” include beauty and personal care, consumer health, home care, home improvement and gardening, homewares and home furnishings, personal accessories and eyewear, pet care, traditional toys and games, and video game hardware Source: Euromonitor
124 73% 84% Chile Peru Brazil Colombia Mexico 60% 72% 81% Coursera learners in Latin America1 Millions 17.9 14.5 2022 2021 Percentage of doctors offering telehealth by country, 20212 % The digital transformation in Latin America is rapidly gaining traction across traditional sectors Source: (1) Coursera ”Global Skills Report” (2021 and 2022); (2) McKinsey & Company “How Latin American physicians view the future of healthcare” (2021)
125 AI Consultations 54% 23% 20% 3% Health Mall (Marketplace) Health Management Consumer Healthcare Online Medical Services 423 MM Users since 2015 21K Partnered hospitals & pharmacies $10B Revenue in 20212 E-Prescriptions Women’s Health Telehealth / Mental Health Revenue distribution of Ping An Good Doctor, China’s largest online healthcare platform, 20201 % Brazilian healthcare startups by category Ping An Good Doctor While one-stop solution healthcare platforms emerged in China, platforms are category-specific in places like Brazil Source: (1) Huajin Securities (2) Ping An Good Doctor Annual Report
126 + + + + 1.3 Remote Work Appendix Slides
127 Not for everyone: The move towards remote work was correlated to wage levels and variated across countries Remote work adoption in Brazil based on wage percentile, 20211 Share of workers who worked from home by wage percentile 10% 15% 30% 0% 40% 35% 20% 45% 5% 25% 60th 100th 70th 0th 50th 10th 20th 30th 40th 80th 90th 14.7% 17.9% 14.7% 67.4% 5% 40.0% 8.7% 73.6% Mexico 13.9% 17.7% USA Chile 22.6% 62.7% 81.1% 30.5% Brazil 29.5% Argentina Yes, some of the time Yes, all of the time Never Remote work adoption in Latin America by country, 20222 Share of workers by frequency of remote work + Source: (1) Scielo “Who worked from home in Brazil? Inequalities highlighted by the pandemic” (2021); (2) Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
128 Developed markets Emerging markets 46% 39% 39% 26% 22% 16% 54% 61% 61% 74% 78% 84% China UK Mexico India US Japan Remote-enabled work No potential of remote work Country’s remote work potential1 Potential share of time that workers could spend working remotely* Remote workers inflexible about work from home2 Share of workers that would look for a new job if demanded to work on-site** Mexico 33% China 36% Great Britain India 31% Japan 21% 36% Brazil 27% US 48% Developed markets Emerging markets Emerging markets have lower potential for remote work penetration, yet remote workers tend to be less flexible Note: (*) Graph doesn’t show actual share of time, but a theoretical maximum calculated based on the countries’ sector, occupation, and activity mix. It considers all activities not requiring on-site presence. (**) Share of online employees that ‘strongly agree’ or ‘agree’ with the statement ‘If my employer expected me to work away from home full time, I would consider looking for another job given the same salary and responsibility’. Source: (1) McKinsey “What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and 9 countries” (2020); (2) Ipsos ”Return To The Workplace Global Survey” (2021)
129 Companies show a greater adoption rate of remote work the smaller they are Adoption of remote work by company size % of respondents 47% 34% 19% 26% 31% 31% 14% 16% 23% 13% 19% 27% >500 employees 101-500 employees 1-100 employees 100% remote 51%-99% remote 25-50% remote <25% remote + Source: Runa and Atlantico survey “The Future of Work in Latin America 2022” (n = HR leaders in 500 companies in Latin America)
130 Most companies allow for some form of remote work in all areas Allowance of remote work by company area % of respondents + Note: Respondents could select “All areas”, “None”, or one to multiple areas within their companies Source: Runa and Atlantico survey “The Future of Work in Latin America 2022” (n = HR leaders in 500 companies in Latin America) 69% 79% 88% Product and tech 80% Administrative Operations Marketing and sales
131 + + + + 2.1 State of Venture Capital and Tech Appendix Slides
132 Recent Trends** Non-profitable technology companies rapidly appreciated in value in 2021, driven by high future cash flow expectations Goldman Sachs Non-Profitable Technology Index* Indexed basket of US-listed profitless tech companies 0 50 100 150 200 250 300 350 400 450 H1 2021 H2 2020 H1 2019 H1 2020 H2 2021 H2 2019 5.3x Starting in 2020, tech companies' valuations boomed, with the index peaking during the beginning of 2021 at ~5.3x its value at the start of the pandemic, though still facing some volatility Beginning of the COVID- 19 pandemic Note: (*) Created in 2021, the GS Non-Profitable Tech basket consists of non-profitable US listed companies in innovative industries, as defined by Goldman Sachs to be broad and include new economy companies across industry groups; it is optimized for liquidity. The index is an absolute measure of the value of this basket. Data until Dec 31st 2021. Source: Bloomberg
133 190 202 82 40% 60% 131 Q1 2022 43% 57% 65% Q1 2021 56% Q4 2020 32% 24% Q2 2021 Q2 2020 196 Q3 2020 Q4 2021 Q3 2021 155 235 37% 267 68% 17% 61% 76% 44% 272 75% Q1 2020 Q2 2022 25% 100 35% 39% 63% 83% $236 $327 $534 $100 Brazil Ecuador Colombia Chile $1,183 Mexico Argentina, Chile, Colombia, Mexico Brazil Deal volume has dropped across Latin America, with Brazil still accounting for most of the largest deals in the region Volume of Investment across Latin America # of deals Top 10 Equity Deals in Latin America Q1 and Q2 2022* Sum of round amounts in US$ M Note: (*) Combined top 10 from Q1 (excluded Caribbean) and top 10 from Q2; no Ecuadorian company made it to the Top 10 in 2021; top 10 accounted for Latin America and Caribbean (excludes FTX). Source: CB Insights “State of Venture Report Q2” (2022) 2020 2021 2022
134 5.0 1.7 3.9 1.4 0.6 0.5 Q4 Q2 5.3 2.0 Q4 Q2 Q1 0.8 Q3 0.9 1.7 Q1 Q2 Q1 Q3 Q4 Q3 2.8 1.3 Q1 Q2 2.4 +21% 2019 2020 2021 2022 Despite 2022 drop in funding from 2021’s peak levels, current funding levels are still higher than historic levels Latin America Venture Funding Investment amount in US$ B Source: LAVCA Industry Data and Analysis, Q2 2022
135 Feelings about the upcoming year in the tech market % of survey respondents by industry 64% 26% 28% 6% 9% 40% 38% 33% 30% 10% 18% 50% 67% 3% 6% 59% 35% 33% 2% 11% 50% 0 30 20 45 50 40 10 25 15 5 35 Excited 45% Scared 27% Cautious or optimistic Optimistic Cautious Concerned about job security Other Software E-commerce or consumer goods Financial services Looking ahead to 2023, tech workers in Latin America across sectors feel more “cautiously optimistic” than scared + Atlantico and Vertico conducted primary research with 200+ tech workers in Latin America of varying seniority Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
136 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Between 18-24 months Between 12-18 months Between 6-12 months Less than 6 months Expected fundraising plans Months to start fundraising, % companies Impact of market condition on fundraising plans % companies 0% 5% 10% 15% 20% 25% 30% 35% 40% Renegotiated current terms Attempt to raise a round sooner than previously expected Plan to breakeven Plans have not changed Postpone original date to fundraise Source: Canary Cash Burn Study (n = 27 early-stage companies, Seed to Series Bs; Conducted on July 1st, 2022) Companies have postponed fundraising plans for now, although most plan to resume within the next 12 months
137 Average C-Levels and Executives think their companies should prioritize DEI and ESG more than they currently do 0 5 10 15 20 25 30 35 40 45 16.13% 35.48% 19.35% 3 4 30.11% 41.94% 2.15% 13.98% 4.30% 1.08% 5 35.48% 2 1 What level of priority does/should DEI have in your company? % of C-Levels and Executives survey respondents Desire (should) Reality (does) 54.8% of surveyed C-Levels and Executives think DEI should be of higher priority at their companies than they currently are 17% Series 2 Series 1 Average 4.15 31% Series 1 3.45 0 5 10 15 20 25 30 35 40 45 35.48% 27.96% 25.81% 31.18% 13.98% 18.28% 25.81% 5 4 3.23% 2 2.15% 1 16.13% 3 What level of priority does/should ESG have in your company? % of C-Levels and Executives survey respondents Desire (should) Reality (does) 22% Series 2 Series 1 3.9 40% Series 1 3.01 + Source: Atlantico and Vertico Survey 2022, collected during July (n = 93 C-Levels and Executives)
138 34% Series 1 27% Series 2 Series 1 Employees think large companies do and should prioritize diversity, equity and inclusion more than smaller ones 0 5 10 15 20 25 30 35 40 45 50 55 35.85% 32.56% 37.21% 1.89% 10.06% 4.65% 5 29.56% 4 22.64% 2 11.63% 13.95% 3 1 What level of priority does DEI have in your company? % of total survey respondents Large (> 100 employees) Small (<= 100 employees) 0 5 10 15 20 25 30 35 40 45 50 55 52.83% 44.19% 28.93% 34.88% 15.72% 3 16.28% 0.63% 2.33% 5 2 1 4 1.89% 2.33% What level of priority should DEI have in your company? % of total survey respondents Large (> 100 employees) Small (<= 100 employees) 3.33 + 3.67 Average Average 14% Series 2 Series 1 4.31 17% Series 1 4.16 Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
139 Employees also believe large companies do and should prioritize ESG* more than smaller ones 0 5 10 15 20 25 30 35 40 45 13.95% 25.79% 13.95% 5 10.06% 20.93% 25.58% 15.09% 16.98% 4 3 25.58% 32.08% 2 1 What level of priority does ESG have in your company? % of total survey respondents Large (> 100 employees) Small (<= 100 employees) 0 5 10 15 20 25 30 35 40 45 35.22% 34.88% 16.35% 32.56% 4.65% 2.33% 5 40.88% 25.58% 4 3 5.66% 2 1.89% 1 What level of priority should ESG have in your company? % of total survey respondents Large (> 100 employees) Small (<= 100 employees) + 40% Series 1 36% Series 1 2.98 3.19 Average Average 19% Series 2 Series 1 4.07 25% Series 1 3.74 Note: (*) ESG stands for environmental, social, and corporate governance Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
140 0 5 10 15 20 25 30 35 40 45 20% 46% 40% Negative 26% Positive 40% 28% Mixed or no change Considering the last 6 months in the tech market, how are you feeling about the upcoming year?* % of total survey respondents + 40 years or older Less than 40 years old 0 5 10 15 20 25 30 35 40 45 30% Negative Mixed or no change 32% 33% 37% Positive 21% 47% Large (more than 100 employees) Small (100 employees or less) Considering the last 6 months in the tech market, how are you feeling about the upcoming year?* % of total survey respondents The last 6 months in the tech market have affected workers’ sentiment in a variety of ways Note: (*) Positive feelings are “optimistic” and “excited” while negative feelings are “cautious”, “scared”, “concerned about job security” and “looking to move outside of tech” Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
141 0 5 10 15 20 25 30 35 40 45 50 48% 22% 34% Early stage 28% Enterprise 24% 12% Growth stage Unicorn 14% 18% Which stage / type of company is most interesting for you to work for? % of total survey respondents + 0 5 10 15 20 25 30 35 40 45 50 14% 21% 25% 37% 23% Unicorn 13% Growth stage Early stage 41% Enterprise 26% Which stage / type of company is most interesting for you to work for? % of total survey respondents 40 years or older Less than 40 years old Female Male Growth stage is the preferred type of company to work for while early stage is the least preferrable Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
142 Students’ interest in working in tech has persisted despite the market’s downturn Students’ most desired areas to work in the short term % of survey respondents 12% 11% 14% 15% 13% 16% 16% 21% 45% 37% Big Tech Startup Consulting 2020 Finance Other 2022 Source: (1) Atlantico Study, June 2020 (n = 1682); (2) Atlantico Study, June 2022 (n = 279)
143 Students’ interest in entrepreneurship has also proven to be resilient in the face of the downturn Students’ entrepreneurial ambitions % of survey respondents Source: (1) Atlantico Study, June 2020 (n = 1682); (2) Atlantico Study, June 2022 (n = 279) 39% 41% 61% 59% Interested 2022 Uninterested/ Unsure 2020
144 0 5 10 15 20 25 30 35 40 45 50 21.29% 36.63% 47.13% 39.60% 21.29% 41.04% 28.49% 12.54% 54.46% Flexibility to choose work location (remote, in-person, hybrid) 42.57% Work life balance 27.24% Alignment between personal purpose and company’s mission 23.30% Learning opportunities Compensation Culture Top 3 reasons for considering or wanting to work for a company1,2 % of total survey respondents Students Tech workers Tech workers prioritize culture while students prioritize learning opportunities when considering where to work Source: (1) Atlantico and Vertico Survey July 2022 (n = 202); (2) Atlantico Study June 2022 (n = 279)
145 GDP growth rate* has started to decline but remains positive, % Interest rates have started to increase but remain lower than pre-pandemic levels,% Inflation** is higher than pre-pandemic levels, % Unemployment is below pre-pandemic levels and continues to decline, % 30 35 40 45 50 55 60 65 Jan-21 Jul-21 Jan-22 Jul-20 Jan-20 Jul-22 Jan-19 Jul-19 36% 64% 6 7 8 9 10 11 12 13 14 Jul-21 Jan-21 Jan-22 Jul-20 Jul-19 Jul-22 Jan-19 Jan-20 7% 10% 30 40 50 60 70 80 90 Jan-22 Jan-21 Jan-20 Jul-21 Jul-19 Jul-20 Jan-19 Jul-22 86% 52% -15 -10 -5 0 5 10 15 Jan-21 Jul-21 Jul-19 Jan-22 Jan-20 Jul-20 Jul-22 1% Argentina: Macroeconomic Snapshot Note: (*) growth rate is GDP in comparison to previous quarter; (**) inflation is measured using the most important categories in the CPI basket in the Great Buenos Aires area and the CPI index has a base of 100 as of December 2016 Source: Trading Economics
146 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 Jan-20 Jan-21 Jan-22 Jan-23 Jan-19 Imports and Exports1 US$ B Estimated spend on energy imports2 US$ B Official1 and Unofficial3 Argentinian Peso Exchange rate US$ B $12.5 Adjusted estimate $5.8 Estimated spend on energy imports prior to the Russian invasion of Ukraine 4.0 Jan-19 8.0 8.5 3.5 3.0 2.5 4.5 5.5 Jan-23 6.0 Jan-22 Jan-21 Jan-20 7.0 5.0 6.5 9.0 7.5 Exports Imports Unofficial market rate ("Blue rate") Official rate Argentina: Global commodity price changes have benefited Argentina’s exports, but energy imports are costly Source: (1) Trading Economics ; (2) Agora Public Affairs, “Winter 2022 the Energy Situation in Argentina”, 04/2022 ; (3) Blue Dollar
147 GDP growth rate* has been slowly rising above pre-pandemic levels % Interest rates continue to climb % Inflation** has reached its highest value in 18 years, ~12% % Unemployment is below pre-pandemic levels and continues to decline % -10 -8 -6 -4 -2 0 2 4 6 8 Jan-20 Jul-20 Jan-21 Jul-19 Jul-21 Jan-22 Jul-22 1% 0 2 4 6 8 10 12 14 Jan-21 Jan-22 Jul-19 Jul-21 Jul-22 Jan-19 Jan-20 Jul-20 13% 0 2 4 6 8 10 12 14 Jan-21 Jul-20 Jul-21 Jan-19 Jan-20 Jul-19 Jan-22 Jul-22 12% 0 5 10 15 Jul-22 Jan-21 Jul-20 Jul-21 Jan-22 Jan-19 Jul-19 Jan-20 10% Brazil: Macroeconomic snapshot Note: (*) growth rate is GDP in comparison to previous quarter; (**) inflation rate measures a broad rise or fall in prices that consumers pay for a standard basket of goods Source: Trading Economics
148 8.0 8.5 9.5 7.0 6.0 5.5 5.0 12.0 10.5 Jul-22 11.0 May-22 11.5 13.5 13.0 12.5 7.5 Nov-21 6.5 Jan-22 9.0 Mar-22 14.0 10.0 85% 15% Local Imported Fertilizer usage in 20211 Food Inflation2 Jan-21 4.8 3.8 4.4 5.0 3.2 5.4 3.0 4.2 4.0 Jan-22 3.4 5.6 4.6 Jan-23 5.2 3.6 5.8 Jan-20 Jan-19 R$ US$ to R$ Exchange Rate2* As an attempt to control food inflation, the government eliminated import tax rate for some food and chemicals used in making fertilizers Brazil: Currency depreciation and high commodity prices have impacted Brazil, a big importer of fertilizers Note: (*) Monthly average exchange rate (US$-R$) Source: (1) CNN “Importação de fertilizantes pelo Brasil aumenta 440% de 1998 a 2021” (June 2022); (2) Trading Economics
149 Note: (*) Growth rate is GDP in comparison to previous quarter; (**) The region refers to Argentina, Brazil, Chile, Colombia, and Mexico The CPI reflects the prices and spending patterns registered in the regional capitals and suburban areas of the fifteen regions of Chile. Source: Trading Economics GDP growth rate* is not only decreasing but also in decline, making Chile the only country in the region** with a shrinking economy % Interest rates are climbing, having more than tripled since 2019 % Inflation is rising steeply compared to pre-pandemic levels % Chile is the only country in the region where unemployment increased in 2022 and remains above pre-pandemic levels % -15 -10 -5 0 5 10 Jan-20 Jul-22 Jul-21 Jul-19 Jan-21 Jan-22 Jul-20 -1% 0 2 4 6 8 10 Jul 2022 10% Jan 2019 Jan 2021 Jan 2020 Jan 2022 0 5 10 15 Jan-20 Jul-22 Jul-19 Jan-21 Jul-21 Jan-19 Jul-20 Jan-22 13% 0 2 4 6 8 10 12 14 Jul-22 Jan-20 Jul-21 Jan-21 Jul-20 Jul-19 Jan-22 Jan-19 8% Chile: Macroeconomic snapshot
150 Note: (*) Growth rate is GDP in comparison to previous quarter Source: Trading Economics GDP growth rate* has started to decrease but like in Argentina remains above pre-pandemic levels, % Interest rates have started to rise, and are currently above pre- pandemic level, as in Brazil and Chile, % Inflation is rising, % Unemployment continues to fall, % -20 -15 -10 -5 0 5 10 15 Jul-20 Jan-20 Jul-21 Jul-19 Jan-22 Jan-21 Jul-22 0 1 2 3 4 5 6 7 8 Jul-20 Jan-20 Jan-21 Jul-21 Jan-22 Jan-19 Jul-22 Jul-19 0 2 4 6 8 10 Jan-20 Jul-21 Jul-20 Jan-19 Jan-21 Jan-22 Jul-22 Jul-19 0 5 10 15 20 25 Jul-22 Jul-19 Jan-20 Jul-21 Jan-19 Jan-22 Jul-20 Jan-21 Colombia: Macroeconomic snapshot
151 Exports US$ B Jan-22 Apr-20 Apr-22 Jul-22 0.0 5.5 Oct-21 Oct-19 Jan-21 Jan-19 1.5 Jul-20 2.5 3.5 3.0 4.0 4.5 5.0 1.0 Apr-21 Jan-20 2.0 Jul-19 Jul-21 0.5 6.0 Apr-19 Oct-20 Colombia: As a major oil exporter, higher commodity prices have strengthened Colombia’s exports Source: Trading Economics
152 Note: (*) growth rate is GDP in comparison to previous quarter; (**) The CPI index has a base of 100 as of December of 2010. The national index tracks 46 large, medium and small cities. Source: Trading Economics GDP growth rate* has started to increase, % Interest rates have started to rise but like in Argentina remain below pre-pandemic levels, % Inflation** is on the rise and above pre-pandemic levels, % Unemployment has started to increase, % -20 -15 -10 -5 0 5 10 15 Jan-21 Jul-20 Jul-21 Jan-20 Jan-22 Jul-22 Jul-19 1% 0 2 4 6 8 10 Jul-20 Jul-19 Jul-22 Jan-21 Jan-20 Jul-21 Jan-22 Jan-19 8% 0 1 2 3 4 5 6 7 8 Jul-20 Jan-19 Jan-21 Jan-20 Jul-22 Jul-21 Jul-19 Jan-22 8% 0 1 2 3 4 5 6 Jan-19 Jan-20 Jul-21 Jul-22 Jan-21 Jan-22 Jul-20 Jul-19 3% Mexico: Macroeconomic snapshot
153 Source: Trading Economics Exports US$ B 35,000 45,000 20,000 15,000 10,000 50,000 0 Jul-22 55,000 Apr-19 Jan-21 Apr-21 Jan-20 Jan-22 Oct-19 Jan-19 Jul-21 Jul-20 Jul-19 Apr-20 30,000 Oct-20 Oct-21 5,000 Apr-22 25,000 40,000 Mexico: Mexican exports were impacted by the Russian invasion of Ukraine
154 Source: (1) Trading Economics (2) Goberno de Mexico, INEGI Tourism GDP Index 2013=100 114 59 77 86 86 94 96 102 106 Q2 2021 Q4 2020 Q2 2020 Q1 2020 Q4 2021 Q3 2020 Q3 2021 Q1 2022 Q1 2021 Mexico: Mexican tourism has started to recover
155 + + + + 2.2 The Latin American Opportunity Appendix Slides
156 0.1% 2020 10.0% 2005 100.0% 2015 2010 1.0% India China Brazil USA LatAm 2020 0.1% 2015 2010 1.0% 10.0% 2005 Atlantico Digital Transformation Index Tech company market cap as % of GDP, log scale Atlantico Digital Transformation Index, Brazil Tech company market cap as % of GDP, log scale Tech penetration has been growing massively across the world, with Brazil and LatAm heading on the same direction Note: HQ location was used to define company region; for all countries we used the average of the respective year’s quarters to calculate GDP and market cap Source: (1) Capital IQ; (2) GDP projections from OECD, log scale; (3) Atlantico analysis
157 Brazil could create several hundreds of billions in value as it catches up to tech penetration in more digitalized regions Brazil Tech Value Creation Catch-up Potential US$ B Catchup India Catchup China Catchup USA Brazil Brazil +$825 B Brazil +$187 B Brazil +$237 B Note: HQ location was used to define company region; for all countries we used the average of the respective year’s quarters to calculate GDP and market cap Source: (1) Capital IQ; (2) GDP projections from OECD, log scale; (3) Atlantico analysis
158 Uses technology, data analysis, and intelligence generation to increase security and reduce crime CRIME & SAFETY Global Peace Index Ranking** (out of 163)1 Safety and security rating*** (scale of 1-5)1 Perceived criminality in society*** (scale of 1- 5)1 130 129 34 3.3 2.4 2.0 3.6 2.0 1.7 3 89 1.3 2.1 Aims to reduce violence against women by creating an app exclusive for women and children ACCESS TO FINANCE Percentage of unbanked population2 Percentage of population (+15ys) with credit cards3 30% 7% 4% 27% 66% 65% 2 20% 21% Provide platforms to facilitate various steps of the supply chain, from procurement to fulfillment & last-mile delivery Logistics Performance Index* (scale of 1-5)4 2.9 4.1 4.0 LOGISTICS COMPLEXITY 1 3.8 LatAm still has many problems to solve, and entrepreneurs have been solving them in creative and localized ways Aims to promote citizen safety through data gathering to offer real-time notifications of risky events Focus on being the neobanks for the Gen Z population, offering cards and digital account Enables companies to offer financial services to employees through private label workplace bank Offer LatAm consumers credit alternatives through digitally-enabled lending models Note: (*) Logistics Performance Index is an assessment of the quality of trade and transport related infrastructure on a scale from 1 (worst) to 5 (best); (**) Global Peace Index Ranking ranks countries from the most peaceful to the most dangerous; (***) the Safety and Security rating and Perceived criminality in society is measured on a scale of 1 to 5, where 1 is the safest and with lowest levels of crime and 5 is the most dangerous with highest perceived criminality in society. Source: (1) Vision of Humanity “Global Peace Index” (2022); (2) Global Finance “World's Most Unbanked Countries" (2021); (3) Global Economy “Percent people with credit cards - Country rankings” (2017); (4) SDG Index “Sustainable Development Report” (2022)
159 + + + + 3.1 Fintech Appendix Slides
160 1,150 700 525 500 500 485 430 420 385 350 310 300 Series D Series D Series D Series E Series D Series F Series F Series E Series B Series D Series E Series G The prominence of fintechs among Latin American unicorns reinforces investors’ interest in the sector Fintech unicorns and public companies in Latin America* Largest VC rounds by funding amount, 2021-2022** US$ M Fintech Non-fintech Note: (*) Unicorns refer to private technology companies with a valuation of over US$ 1B, Nubank, dLocal, Stone, and PagSeguro are no longer unicorns given they are now public companies; (**) Up to August 15th, 2022 Source: Bloomberg, Crunchbase, PitchBook, Reuters
161 0.0 0.0 0.5 1.6 3.7 59.6 Q1 Q3 48.1 37.1 29.7 15.6 Q1 Q1 7.7 Q3 23.5 Q3 Q3 Q1 Q3 Q3 Q3 Q1 Q1 Q1 Q1 Q3 Q1 2014 2015 2016 2017 2018 2019 2020 2021 2022 5 9 10 13 14 14 5 6 2 2 3 5 10 13 13 14 6 7 8 9 15 21 23 24 16 11 7 6 52 2012 2017 2021 47 2020 9 2019 50 35 2018 2015 2014 23 2013 2016 +9X Argentina Mexico Brazil By September 2021, Nubank had provided the first credit card or bank account to ~5MM people2 The first wave of the fintech boom was consumer-centric and marked by an explosion of neobanks Number of neobanks in Latin America1 Number of Nubank customers2 MM Source: (1) BPC and Fincog, “Digital banking in Latin America” (2022); (2) Nubank SEC F-1 (2021) and Q1 2022 Earnings Presentation (2022)
162 9.4 18.5 14.5 16.0 12.1 13.8 4.3 7.2 2018 2019 2020 2021 Debit Cards Int’l Credit Cards Cash- Based 14 14 15 17 19 $2.9 $5.5 $3.3 4Q21 $3.5 2Q21 $7.1 1Q21 4Q20 3Q21 Digital Wallets Payments, including digital wallets, were central to the early consumer fintech boom and have continued to grow E-commerce means of payments in Brazil1* US$ B Mercado Pago wallet payers & digital account TPV2 Payers in MM and total payment volume in US$ B Note: (*) Excluding domestic credit cards, bank transfers, and other forms of payment Source: (1) EBANX, “Beyond Borders” (2022); (2) Mercado Libre Fourth Quarter 2021 Results Investor Presentation (2021)
163 2016 2018 The Brazilian Central Bank allows banks to register and onboard retail customers 100% digitally Cause Digital banks arise Incumbents shut down many of their physical branches Effect 19.3 20.7 21.6 23.4 2020 2019 2018 22.9 18.3 2017 21.8 2016 2021 2015 Number of physical bank branches in Brazil Thousands The Brazilian Central Bank creates new types of companies (SCD and SEP*) that allow fintechs to offer credit without the need for partnerships with traditional financial institutions Cause Over 50 companies emerge or start to offer credit products in-house as one of these new types of business structures Effect 51 Number of fintechs offering credit in-house in Brazil** Jan-19 Dec-20 Regulatory changes enabled much of the first wave of B2C innovation and will continue to be a driver for the B2B wave Note: (*) Direct Credit Society (Sociedade de Crédito Direto) and Society of Loans Between People (Sociedade de Empréstimo entre Pessoas), respectively; (**) as SCDs or SEPs Source: Brazilian Central Bank
164 2019 The Brazilian Central Bank creates the legal framework for receivables registrars to bring transparency to this market, allowing credit grantors to see the receivables of businesses that are not their customers yet and offer them credit alternatives with this information Cause Monthly financial volume registered in CERC* R$ B The creation of receivables registrars (registradoras de recebíveis) was a landmark in the Brazilian credit market Receivables registrars start to operate in June 2021, promising to enable businesses to have more credit options at cheaper prices In practice, though, credit options have not become significantly cheaper due to technical challenges in the implementation, which the Brazilian Central Bank is working to address Effect 2021 45 88 Card receivables Jun -22 Feb -22 3 Jan -22 Dec -21 Other financial assets Duplicatas** Oct -21 Sep -21 Jul -22 Jul -21 May -22 Aug -21 5 Nov -21 Mar -22 120 Apr -22 10.51% 19.21% 8.51% 7.46% Jan-21 Jul-21 Jan-22 Jul-22 Jul-20 Difference between average rate and base rate Average interest rate Receivables-based interest rate2 Note: (*) CERC is a receivable registrar; (**) Duplicatas are a form of credit widely used in Brazil Source: (1) CERC “Estatísticas de Ativos” (2022); (2) Federação Brasileira de Bancos “Panorama do Mercado de Crédito” (2022) and Banco Central do Brasil “Taxa Selic” (2022)
165 1.2 0.5 Dec-22 0.0 Jul-22 Jun-22 0.1 Dec-22 2.1 Jun-22 Jun-22 2.8 Jan-22 0.2 2+ million Users since 2020 launch 10+ million Transfers made COL$ 120k* Average transfer amount Minka built TransfiYa, Colombia’s instant P2P payment system, after winning a public concession Minka monthly number of transactions Millions TransfiYa numbers Minka is building a seamless and open network that enables money to be moved in real time, starting in Colombia Note: (*) The US Dollar to Colombian Peso exchange rate on Aug. 12th, 2022 was 4167.34 and averaged 4001.01 in 2022 Source: Minka internal data
166 Frequency of use by payment method % of respondents 9% 14% 15% 5% 18% 10% 53% 51% 16% 37% 31% 36% 21% 30% 8% 7% 6% 17% 22% 9% 20% 6% 27% 23% 28% 24% 27% 30% 31% 33% 48% 47% 26% 20% 18% 30% 14% 18% 40% 22% 17% 13% 39% 62% 34% 30% 6% 15% 9% 15% Brazil Argentina Colombia 1% Mexico 3% 3% US Brazil 3% 3% Chile Argentina 1% Colombia 2% Mexico US 2% Chile Never Weekly Monthly Yearly Daily Cash Bank transfers Use of different payment methods varies considerably across countries in the Americas (pt. 1) + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
167 Frequency of use by payment method % of respondents 38% 59% 11% 37% 23% 19% 59% 65% 44% 63% 29% 19% 28% 19% 5% 5% 8% 10% 9% 5% 6% 24% 13% 11% 18% 16% 10% 23% 17% 17% 12% 23% 27% 9% 8% 24% 17% 21% 25% 12% 8% 16% 10% 20% 22% 50% 23% 36% 42% 6% 1% 14% 6% 23% 26% Argentina Colombia 1% 4% 4% Mexico US Brazil Mexico Brazil Chile Colombia Chile US Argentina Monthly Never Weekly Yearly Daily Debit cards Credit cards Use of different payment methods varies considerably across countries in the Americas (pt. 2) + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
168 Frequency of use by payment method % of respondents 74% 72% 51% 79% 50% 38% 94% 96% 94% 95% 94% 93% 5% 9% 8% 8% 8% 1% 5% 12% 15% 26% 6% 19% 31% 1% 2% 1% 2% 2% 2% 7% 6% 12% 3% 11% 17% 1% 2% 1% 2% 1% 6% 13% 6% 1% 1% 2% Chile Brazil Argentina 2% Brazil Mexico Colombia Chile Mexico 1% 3% US 4% Colombia 4% US 2% 2% Argentina Payment apps Cryptocurrencies Never Weekly Monthly Yearly Daily Use of different payment methods varies considerably across countries in the Americas (pt. 3) + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
169 136 313 554 1,288 2,065 6,049 2019 2017 2021 2020 2016 2018 +114% CAGR 4 5 6 7 2021 2020 2019 2018 dLocal enables companies to make and accept local payments in Latin America and other emerging markets dLocal, from Uruguay, offers an all-in-one payment platform focused on allowing businesses to process payments in countries ranging from Argentina to Uganda dLocal total payment volume US$ MM Average number of countries served per dLocal customer Source: dLocal SEC F-1 (2021) and 2Q 2021 Earnings Presentation
170 Access Open to only 58 financial institutions in 20201 Open to over 700 financial institutions since inception2 Standalone app that connects to accounts in the institutions Institutions must embed Pix in their apps into the login flow Integration In 2018, only ~8 million people had access to mobile banking, 8% of Mexico’s adult population3 In 2019, there were >88MM active mobile banking accounts for individuals4 Prior Mobile Banking Adoption Transaction Types Only P2B P2P, P2B, B2P, B2B, P2G, and B2G 1,930.5 June 2022 0.23 8,400X CoDi Pix Transaction volume in June 20221,2 Monthly transaction in millions The instant success of Brazil’s Pix starkly contrasts the disappointing traction of Mexico’s CoDi Source: (1) Banco de México; (2) Banco Central do Brasil; (3) World Bank, INECGI; (4) Febraban
171 + + + + 3.2 SMB Digitalization Appendix Slides
172 Latin American SMBs show lower productivity levels, at 33% of the OECD average1 Labor Productivity by firm size, manufacturing Value added per person employed, large firm productivity = 100 Labor Productivity by firm size, business service2 Value added per person employed, large firm productivity = 100 36 35 50 56 50 48 58 62 72 United Kingdom Mexico 61 Spain 100 Germany Brazil Medium (50-249 workers) Small (10-49 workers) Micro (1-9 workers) 72 29 73 55 98 128 89 109 111 United Kingdom 100 104 Mexico Spain Germany Brazil Medium (50-249 workers) Small (10-49 workers) Micro (1-9 workers) Source: (1) OECD “SME and Entrepreneurship Policy in Brazil” (2020); (2) OECD “OECD Compendium of Productivity Indicators” (2021)
173 COVID-19 pandemic digital-related impacts on SMBs % of surveyed companies The COVID-19 pandemic accentuated the need for SMB digitalization, driving increased interest in tech solutions 68% 50% 46% 35% 25% More problems with delivery & logistics Need to switch to online sales Higher procurement costs High burden of IT infrastructure Need to change to remote work SMBs’ interest in digital solutions use cases % of surveyed companies Process optimization 16% 17% 9% 9% 13% Employee training 19% Quality management 6% 7% Inventory planning Data accessibility 10% 18% +171% +80% +89% +78% +117% After COVID-19 (2021) Before COVID-19 (2019) Only 11% of large companies reported need to switch to online sales Source: World Economic Forum “COVID-19 and Technology Adoption in Small and Medium-Sized Enterprises: The Impact and the Way Forward” (2021)
174 Connecting SMBs to third party providers to reduce costs and allow for more flexibility when obtaining sporadic services Payment Solutions Financial Services Commercial / Sales Relations Helping SMBs manage all facets of their business with solutions focused on areas ranging from HR to financial management Streamlining relationships with suppliers, carriers, manufacturers, and other important players in the SMB’s supply chain Meeting the demand for facilitation and digitalization of payment and billing for products and services from customers Offering credit, financing and banking solutions (that are often challenging for SMBs to access) and digital management Outsourcing Services Business Management Sales and Customer Relationships Providing tools to digitalize marketing and sales of products as well as collect business analytics and intelligence Tech companies focused on SMB digitalization are on the rise, helping SMBs tackle multiple pain points Source: Distrito Dataminer Flash Report Startups para PMEs, Atlantico Analysis
175 Price variation from 15 suppliers for the same product on the same day3 São Paulo To buy inventory for their shops, 1 million SMBs’ owners take risky, exhausting and expensive trips to São Paulo every month 26% 36% 39% 43% 22% 64% Italy Russia France Canada 70% 98% Mexico United States Brazil China 26% Colombia 40% India 1.58x 1.31x 1.00x 0.89x Bottom Top Average No brand 1.00x 1.25x Top Bottom Average 1.47x 0.85x No brand Top No brand Average 1.00x 0.31x Bottom 2.23x 1.47x In a fragmented market like Latin America, SMBs often face a costly and inefficient procurement process Degree of fragmentation in grocery market1 %*, 2022 Impact of highly fragmented market Complex process to obtain inventory for shops across Brazil2 Rice Brand: Camil Refined sugar Brand: União Meat broth Brand: Knorr Note: (*) Percentage is based on revenue pool that is driven by independent grocers rather than large chains. Source: (1) McKinsey “Digital disruption: The rise of eB2B in fragmented retail” (2022); (2) Zax, (3) Cayena
176 Zax gross merchandise volume Indexed to Q1 2020 (=100) Zax number of sellers Indexed to February 2020 (=100) 100 496 585 789 819 1,400 1,274 1,770 1,774 2,941 Q3 Q4 Q2 Q3 Q2 Q1 Q2 Q1 Q4 Q1 +259% 100 1,353 1,997 2,372 2,672 Jan-20 Jan-22 Jan-21 2,031 366 863 1,859 1,106 2,238 1,372 2,647 556 Business Model: B2B platform connecting retailers and wholesalers to digitize and streamline the purchase & sale of merchandise, with additional offerings such as: Zax is a B2B marketplace streamlining the complex procurement process for SMBs in a cost-efficient way Wholesale marketplace (product discovery and safe transactions) SaaS (Organizing and centralizing wholesale SMBs online sales) Fintech (credit offer, full payments and banking solutions) Logistics (Providing faire priced agile shipping for wholesale shoppers) 2020 2021 2022 Source: Zax internal data
177 Business Model: Growth in sales Monthly TPV in US$ M Sumer offers a one-stop solution for merchants to create, manage, and grow their online businesses, with in-house and integrated solutions, including: Online store creation Marketing tools Shipping Payments Store customization Bookkeeping 2.1 1.9 1.8 4.2 0.7 0.2 2.6 May-22 Jan-22 Feb-22 Dec-21 5.2 Nov-21 Mar-22 Oct-21 Apr-22 +40% CMGR* 88 117 97 136 135 169 201 240 Apr-22 Feb-22 may/22 Dec-21 Nov-21 Mar-22 Oct-21 Jan-22 2.7x Growth in monthly merchant sales Average merchant TPV in US$ Sumer: the rise of “Superapps” designed to generate limitless feature expansion through an app ecosystem Note: (*) CMGR stands for Compound Monthly Growth Rate Source: Sumer internal data
178 + + + + 3.3 Web3 & Crypto Appendix Slides
179 Global Funding for blockchain and crypto and across sectors US$ B 0 1 2 3 4 5 6 7 8 9 10 0 20 40 60 80 100 120 140 160 180 Q3 2021 Q4 2021 Q1 2022 Q2 2019 Q2 2020 Q2 2021 Q1 2021 Q3 2019 Q3 2020 Q2 2022 Q1 2020 Q4 2019 Q4 2020 Q1 2019 Global Blockchain funding (B) Global venture funding (B) 2021 CAGR: 18% 2021 CAGR: 68% Despite a decline in funding for Q2’22, blockchain funding increased more steeply in 2021 than funding across other categories combined and was hit later After increasing for eight consecutive quarters, global blockchain funding declined in Q2 2022 Source: CB Insights, State of Blockchain Q1 ’22, Q2 ‘22 ; State of Venture Q2’22
180 250 250 25 26 25 50 21 Money Raised (US$ M) Country Mexico Brazil Argentina Brazil Mexico Argentina Brazil 64 797 642 157 82 47 Q3 2021 Q2 2022 Q1 2022 Q2 2021 Q4 2021 Q1 2021 LatAm blockchain companies have attracted plenty of funding since 2021 and are well-capitalized Volume of funding for Latin America blockchain companies1* US$ M Largest deals in Latin America2,3** Q1 21 to Q2 22 Despite a decline in funding during Q2 2022, blockchain funding increased more steeply in 2021 than funding across other categories combined and started declining later Brazil Brazil 190 150 Note: (*) Excluding FTX; (**) Filtered by industry – “Crypto/Blockchain” for deals that occurred 01/01/21-06/30/22, rounded to the nearest whole number, Cloudwalk is a payments company that has a strong crypto element to its strategy Source: (1) CB Insights “State of Blockchain Q2” (2022) and “State of Blockchain” (2021); (2) Pitchbook (3) Crunchbase
181 0.41 0.88 1.45 1.93 0.19 0.41 Binance Coinbase 0.48 Bitcoin Trade Huobi Crypto.com KuCoin Trust: Crypto & Bitcoin Wallet Bitso MetaMask 0.58 Mercado Bitcoin 0.19 0.67 “Cryptocurrency Exchange Crypto.com arrives in Brazil” May 11, 2021 March 16, 2022 March 27, 2022 Global players lead the Brazilian market and have moved into the country, reinforcing belief in its long-term potential Top 10 most downloaded cryptocurrency apps by Brazilians1* Number of downloads in 2022, MM Most of the top 10 apps are crypto exchanges, illustrating the overall interest for cryptoassets in the country Note: (*) Downloads made on Android and iOS devices between Jan 1th and June 30th, 2022 Source: (1) Yahoo “2 dos 10 apps de cripto mais baixados são brasileiros; veja lista” (June 2022)
182 Mercado Bitcoin is a Brazilian unicorn offering a robust crypto exchange platform, currently with 3.6 million investors 38 108 136 138 1,434 775 267 7.5 4.2 8.6 7.4 7.2 57.2 $0k $5k $10k $15k $20k $25k $30k $35k $40k $45k $50k $55k $60k 0 500 1,000 1,500 1H22 31.5 29.4 2H20 1H18 1H20 9.2 1H19 211 2H18 100 1H21 2H21 2H19 Mercado Bitcoin total transaction volume Indexed to 1H 2018 (=100) Mercado Bitcoin total customer base Millions of customers Mercado Bitcoin is a cryptocurrency exchange platform that allows people to trade cryptocurrency, digital assets, and other tokens all in one place 1.0M 1.8M 1.9M 3.6M 1H22 2H21 3.3M 2.9M 2H20 2.1M 2H19 1H21 1H19 1.5M 1H20 2H18 1.2M 1H18 Despite contraction, 2022 volume is still way above historical, pre-bull market levels Bitcoin price (US$k) Volume (indexed) Source: Mercado Bitcoin internal data
183 Despite cryptocurrencies’ steep decrease in value, investors are not giving up on cryptoassets + 26% Increase in number of Investors since June 2021 - 47% decrease in Bitcoin value since June 2021 $30k $70k $0k $40k $60k $10k $20k $50k 200k 300k 232k Jul -22 Mar -22 Apr -22 Jan -22 247k 239k Jun -22 292k Dec -21 Nov -21 Feb -22 290k Jun -21 232k Oct -21 251k May -22 264k 272k Jul -21 286k 291k 288k 296k Sep -21 295k Aug -21 Number of investors Bitcoin price Trends Hashdex is a cryptocurrency investment firm that aims to unlock the blockchain’s potential in Brazil through indices, ETFs, funds, research, and other services Hashdex number of investors and Bitcoin’s price* Thousands and US$ k, respectively Note: (*) Number of investors refers to those who have at least 1 Brazilian Real in any of the Hashdex funds on the last day of each month Source: Hashdex internal data
184 Main countries in Latin America still lag a lot behind the US in crypto ownership, with Mexico being the exception Crypto ownership across countries % of respondents 0.7% US 5.4% 11.4% Colombia Mexico 4.8% 15% Argentina 3.6% Brazil Chile + Source: Atlantico and Atlas Intel Brazil survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2- 3% confidence interval) Question: “Do you own any form of cryptocurrency” (2022)
185 Crypto literacy results across countries* % of respondents Persistent knowledge gap remains a barrier to crypto adoption throughout Latin America 8% 5% 9% 9% 10% 16% 29% 48% 31% 22% 33% 33% 29% 8% 26% 14% 34% 43% 37% 35% 34% 61% 23% Very informed US I know nothing at all about cryptocurrency Argentina Not very informed Colombia Somewhat informed 3% Chile Brazil Mexico + Note: (*) Results per country may not sum up to 100% due to rounding Source: Atlantico and Atlas Intel Brazil survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2- 3% confidence interval) Question: “How informed are you in regard to cryptocurrencies, like Bitcoin and Ethereum” (2022)
186 LoopiPay is a Brazilian company tackling the crypto accessibility gap by helping onboard new users into web3 technology with less friction From traditional banks to crypto assets in a wallet 2,594 Jul-22 Apr-22 Jun-22 May-22 Mar-22 664 1,971 1,579 100 26X LoopiPay total payment volume Indexed to March 2022 (=100) LoopiPay allows users to buy cryptocurrencies and other tokens using PIX - the Brazilian Central Bank’s instant payment systems Source: LoopiPay internal data
187 Brazil Usage: Has proposed legislation that aims to regulate crypto-assets in payments, investments, and transfers1 Taxation: Cryptocurrencies are included under the Argentinian “check tax” collection, and earnings and holdings should be reported3 Usage: Currently working to develop a framework to regulate cryptocurrencies and potentially recognize them as a form of payment1 Taxation: Any transactions should be reported in the income tax filing2 Usage: Has a legal framework for financial institutions, which prohibits them from transacting with virtual assets unless prior authorization from the government 1 Taxation: There are no specific tax regulations addressing cryptocurrencies, but income derived from cryptocurrency transactions are taxable4 Usage: Currently drafting regulation for the use of crypto after conducting a pilot project within a regulatory sandbox7 Taxation: Cryptocurrencies are classified as intangible assets and should be reported in the income tax filing6 Usage: Has launched a regulatory sandbox and currently requires the identification of customers and all transactions to be reported and kept on record1 Taxation: Earnings and holdings should be reported but are only taxable if above a certain threshold 5 Usage: Allows consumers to use cryptocurrency in all transactions and presented the measure to promote economic development and jobs2 Taxation: Investors are exempt from paying capital gains and income taxes on Bitcoin5 Governments have also been active in regulating the crypto space to define rules of conduct and protect users Chile Argentina Mexico Colombia El Salvador Note: Information gathered on July 7th, 2022; Colombia information updated on August 23rd, 2022 Source: (1) Thomson Reuters “Cryptos on the rise 2022” (2022); (2) PWC; (3) Business Insider; (4) Coin Text; (5) Coin Telegraph; (6) BBC; (7) Bloomberg Línea
188 Credix’s Total Value Locked, 2022 US$ M Credix is a B2B credit marketplace, bringing complex, fixed-income market logic to DeFi using real world assets Credix is a decentralized B2B credit marketplace that enables borrowers in emerging countries to access global previously untapped capital 1.0 5.0 7.0 9.5 10.0 17.6 22.9 0 2 4 6 8 10 12 14 16 18 20 22 24 6-Feb 21-Aug 7-Aug 24-Jul 20-Feb 26-Jun 3-Apr 10-Jul 20-Mar 15-May 12-Jun 6-Mar 29-May 29-Aug 1-May 17-Apr 23-Jan 17.4 15.2 Source: Credix public data
189 WEB3 820k NFT sales transactions2 1MM NFT sales transactions3 WEB2 Local players are helping onboard games into web3 prioritizing asset ownership and launching a secondary market, or supporting web3 games with new solutions Falco offered web3 infrastructure to games Mouse Haunt and The Harvest - developing the marketplace and integrating tokens and NFTs in the game3 238 273 Payers Non-Payers 53% 47% 2020 258 2021 2019 54% 57% 46% 43% Games Number of Payers and Players in Latin America1 Total number of players in millions Gaming has mobilized millions in digital assets allowing gamers to take ownership of parts of the experience Source: (1) NewZoo; (2) Prota Games internal data; (3) Falco internal data; (4) Bayz Among other services, Bayz is helping web3 games monetize in alternative ways to NFTs, such as content creation, marketing, e-sport event organization, and more4
190 HNT Digital total hotspot networks and Helium token price # of hotspots; US$ HNT Digital is the first and main Brazilian company deploying the Helium network infrastructure in the country. Helium is a blockchain-based decentralized global wireless network. Token price volatility has been a challenge for Helium and a constraint on new Capex deployment 297 781 1,498 1,614 1,621 $12.7 $39.7 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Q1 $24.2 Q2 Q4 Q3 $9.4 $18.6 Q2 Active Hotspots (HNT Digital) Helium price (US$) Given crypto volatility, Helium token price has fluctuated, affecting the deployment rate of new hotspots and Capex investment pace Helium has become the largest IoT (Internet of Things) network in the world and long-term plan to provide infrastructure for 5G, WiFi, VPN and others Helium project seeks to roll out a global decentralized wireless network by leveraging token incentives to drive hotspot deployment HNT Digital is a Brazil-focused startup deploying and managing Helium hotspots across the whole country Source: HNT Digital internal data Local companies are also betting on global Web3 projects: HNT Digital is the largest Helium network builder in Brazil 2021 2022
191 + + + + Support Data Primary Survey Demographics Appendix Slides
192 Argentina survey panel distribution | Atlantico and AtlasIntel Argentina survey panel distribution % of respondents (n = 878) 48% 52% Female Gender Male 14% 23% 22% 25% 16% 60+ years 45-59 35-44 25-34 16-24 years Age 12% 32% 22% 21% 14% 15-30k 45-110k ARS 0-15k 30-45k ARS 110k+ Monthly household income 42% 45% 14% Bachelor High school Middle school Education 29% 6% 14% 51% Protestant 100 Agnostic or atheist Other religions Catholic Religion Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 878, 3% confidence interval)
193 Brazil survey panel distribution | Atlantico and AtlasIntel Brazil survey panel distribution % of respondents (n = 2,262) 46% 54% Male Female Gender 19% 26% 19% 21% 14% 60+ years 45-59 25-34 Age 35-44 16-24 years 9% 17% 18% 21% 36% > 10 min. wages 5-10 min. wages 3-5 min. wages < 2 min. wages 2-3 min. wages Monthly household income 42% 45% 14% Bachelor High school Education Middle school 51% 29% 14% 6% Agnostic or atheist Protestant Catholic Other religions Religion Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 2,262, 2% confidence interval)
194 Chile survey panel distribution | Atlantico and AtlasIntel Chile survey panel distribution % of respondents (n = 812) 48% 52% Male Female Gender 60+ years 35-44 45-59 25-34 18-24 years 19% 28% 18% Age 15% 21% 42% 51% 8% Bachelor Middle school High school Education 44% 27% 14% 16% Catholic Protestant Agnostic or atheist Other religions Religion 11% 20% 30% 20% 19% 1-2M CLP 2M+ Monthly household income 400-600k CLP 0-400k 0.6-1M Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 812, 3% confidence interval)
195 Colombia survey panel distribution | Atlantico and AtlasIntel Colombia survey panel distribution % of respondents (n = 848) 47% 53% Male Female Gender 27% 18% 20% 24% 12% 55+ years 45-54 Age 35-44 25-34 18-24 years 32% 68% Bachelor Middle/high school Education 63% 14% 22% Catholic Agnostic or atheist Protestant Other religions 1% Religion 12% 16% 34% 21% 17% COP 4M+ 2-4M COP 0-400k 0.9-2M 400-900k Monthly household income Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 848, 3% confidence interval)
196 Mexico survey panel distribution | Atlantico and AtlasIntel Mexico survey panel distribution % of respondents (n = 818) 47% 53% Male Female Gender 60+ years 35-44 15% Age 21% 16-24 years 28% 45-59 18% 25-34 19% 30% 28% 25% 17% Technical Bachelor Middle school Education High school 72% 6% 7% 14% Catholic Agnostic or atheist Protestant Other religions Religion 32% 27% 24% 18% 15k+ pesos 10-15k < 5k pesos 5-10k Monthly household income Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 818, 3% confidence interval)
197 USA survey panel distribution | Atlantico and AtlasIntel USA survey panel distribution % of respondents (n = 831) 49% 52% Gender Male Female 18-29 years 22% 30-44 39% 45-64 23% 16% Age 65+ 41% 59% College degree or higher All other Education 26% 39% 35% 50-100k < US$50k US$100k+ Monthly household income Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 831, 3% confidence interval)
198 Survey panel distribution | Atlantico and Runa Survey panel distribution % of respondents (n = 515) 46% 8% 26% 6% 14% Mexico Colombia Argentina Brazil Others Company Headquarters Services Commerce Health Manufacturing Education Logistics Others Financial Services 8% Company Industry 12% 5% Tech 4% 26% 16% 20% 6% 5% 27% 37% 35% Global Single LatAm country Across LatAm Company Geographic Reach 20% 18% 12% 29% 21% 10-50 > 500 Company # of Employees 51-100 101-500 < 10 Source: Atlantico and Runa survey 2022, collected from July 4th to August 23rd (n = 515)
199 72% 28% Prefer not to answer 0% Female Gender Male Survey panel distribution | Atlantico and Vertico Survey panel distribution % of respondents (n = 202) 5% 9% 18% 24% 33% 11% 40-44 Age 30-34 26-29 35-39 45-49 50+ 51% 28% 8% 5% 8% 101-500 employees 501+ employees 1-30 employees 51-100 employees Company size 31-50 employees 45% 5% 11% 20% 23% Consumer goods Software Other E-commerce Financial services Industry 46% 24% 22% 7% Manager of a team Head Manager of managers Regional vice president Individual contributor Position C-suite or executive 0% 0% Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
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Atlantico LatAm Digital Report 2022.pdf

  • 1.
  • 2.
    2 Disclaimer This report, includingthe information contained herein, has been compiled for informational purposes only and does not constitute an offer to sell or a solicitation of an offer to purchase any security. Any such offer or solicitation shall only be made pursuant to the final offering documents related to such security. This report also does not constitute legal, strategic, accounting, tax, or other similar professional advice normally provided by licensed or certified practitioners. The report relies on data from a wide range of sources, including public and private companies, market research firms and government agencies. We cite specific sources where data are public; the presentation is also informed by non-public information, interviews with experts (on- and off-the-record), proprietary data analysis, primary research conducted by Atlantico and by others. We disclaim any and all warranties, express or implied, with respect to the presentation. Atlantico makes no representations or warranties regarding the accuracy or completeness of the information contained in this report and expressly disclaims any and all liabilities based on it. Atlantico shall not be obliged to maintain, update or correct the report, nor shall it be liable, in any event, for any losses suffered as a consequence of the use of this report by any third parties.
  • 3.
    3 Readme.txt Cautious optimism. Curiously,our mixed emotions about the current state of the market mirror how tech founders and workers are feeling this year. Our optimism is rooted in the conviction that digitalization is a secular force transforming Latin America for decades to come. Whether we are drunk at the peak (last year) or hungover in the trough (this year), when we zoom out from the cycle of the day, the trendline is clearly up and to the right. As our Digital Transformation Index shows, the region’s technology ecosystem stands to grow by an order-of-magnitude as it catches up to the likes of India, China, and even the US, all of which began their journeys long before us. Value creation from tech in LatAm will be measured in the trillions of dollars. The foundation for long-term growth is rock solid: LatAm is ahead of China in internet penetration and leads globally in digital adoption for most internet services and digital media. Capital, long a barrier to growth, is no longer scarce even after a halving of venture funding from 2021 peaks. Despite the market downturn, human capital still flocks to tech, with students at top schools reinforcing their preference to work in tech above all other fields. Perhaps most striking is how the pandemic-sparked digital boom has persisted in Latin America, representing a permanent leap forward while more developed markets like the US are now reverting to pre-pandemic trendlines. This great leap forward in digital adoption goes beyond e-commerce and food delivery and is seen across all areas of society – from digital banking usage to telemedicine. After experiencing the future, for Latin Americans there is no going back to waiting in line at the bank branch or at the doctor’s office. If there’s a reason why optimism runs through our veins as entrepreneurs, there is equally good reason for the caution with which such optimism should be tempered. As Tom Jobim warned us, “Brazil is not for beginners,” and, in this year’s market downturn, neither is the rest of the world. After years of pumping steroids into the veins of the world economy, Central Banks pressed the brakes as inflation finally reared its head. Asset prices worldwide adjusted abruptly, and tech companies were no exception – with cash flows further into the future, they felt the pain especially severely as investors questioned the unwinding of this economic adjustment. Venture funding eased up and founders that the market encouraged to grow at all costs only six months ago are now told to focus on margins. Our research shows that founders are tightening their belts, but most likely not enough given the uncertain global and regional backdrop. Yet, encouragingly, historic data shows that a pot of gold (or bitcoin) may await us at the end of the rainbow if we exercise enough caution to make it there. The data shows that businesses that survive and get funded in bear markets like these are significantly more likely to become large, independent public companies. But ensuring survival is far from an easy feat and finding balance is key this year. Amidst all the dynamism, this year we found ourselves drawn to explore three different areas of opportunity: for Fintech, Latin America’s world-class performance continues. A rising tide for B2B innovation accelerated by infrastructure buildout and record-breaking adoption of Brazil’s instant payment system Pix define this continued success. Moreover, a new wave of entrepreneurs is breaking barriers for SMB digitalization in Latin America, bridging the gap between the abnormally high number of SMBs in the region and the equally shy value they create for the economy. Finally, for Crypto and web3, while it’s still early days, Latin America is perhaps the most fertile ground for the application of successful use cases. We are excited to have you join us in this third edition of the Report. Enjoy the ride!
  • 4.
    4 Research Team Let usgive credit where credit is due Ana Martins Partner, Atlantico Carlos Pinto Wharton School, University of Pennsylvania Ana Luisa Guimarães University of Southern California Maika Pereira Wharton School, University of Pennsylvania Aurora Feng Stanford University Victor Ramos Associate, Atlantico Julio Vasconcellos Partner, Atlantico Nathan Wong Project Lead, Harvard Business School Special Contributors Hugo Barra Florian Hagenbuch Mate Pencz Guilherme Telles Atlantico Venture Board Partners Guilherme Grupenmacher
  • 5.
    5 Cases with 25+Leading Companies in the Region Our Partners We are thankful for the help of these organizations and contributors who partnered with us on primary research and data collection and analysis Extensive Primary Research Initiatives ... and countless other experts and friends who we interviewed and helped us with on- and off-the-record data, information, and insights. Thank you! The Future of Work in Latin America 2022: Runa and Atlantico surveyed HR leaders and employees from 500 companies across the region National Opinions: AtlasIntel and Atlantico surveyed +6.4k people across 5 Latin America countries plus the US (95% confidence level w/ 2-3% margin) Tech Industry Outlook: Vertico and Atlantico surveyed over 200 tech employees, from C-levels to individual contributors, in Latin America Atlantico Student Survey: Conducted with over 250 undergraduate students representing 60 top schools in Brazil and abroad Research with founders: Atlantico brings original insights on founders, from the Good View Summit Unicorn survey, Atlantico founder survey, Canary founder survey and more And other initiatives…
  • 6.
    6 About Atlantico Led bymodern founder-CEOs with a long record of investing success Atlantico was started by entrepreneurs who founded and scaled some of the largest tech companies in Latin America (and the world) and have been investing in the region for over a decade. Unique boutique approach enabled by a highly-selective investment style We concentrate capital on fewer, higher-conviction investments in order to focus our time and support for our portfolio companies. Extended team comprised of world-class specialists with domain expertise Atlantico has an exclusive team of Operating Partners with deep expertise in Product, Engineering, Talent, and Growth to help founders win. Deep analytical and primary research capabilities that support all activities We believe judgment in venture comes from combining qualitative pattern- matching (the “art” from hands-on experience) and rigorous data analysis (the “science”), and tirelessly apply this approach to our work. Atlantico is a leading early-stage venture capital fund investing in Latin America
  • 7.
    7 Latin America DigitalTransformation Report 2022 2. A Changing Landscape 2.1 State of Venture Capital and Tech 2.2 The Latin American Opportunity 3. Opportunities Ahead 3.1 Fintech 3.2 SMB Digitalization 3.3 Web3 & Crypto 1. The Foundations 1.1 Socioeconomic Foundations 1.2 Digitalization 1.3 Remote Work
  • 8.
    8 Latin America DigitalTransformation Report 2022 1. The Foundations 1.1 SOCIECONOMIC FOUNDATIONS Latin America has a population of 665 million people and a GDP of over US$ 5T, with Brazil, Mexico, Argentina, Chile, and Colombia making up 80% of it. With key elections across the region this year, Latin America has been experiencing a recent resurgence in left-of-center politics 1.2 DIGITALIZATION Latin Americans continue to come online at a rapid pace, with internet penetration reaching 78%, surpassing China. 5G adoption shows promise and e-commerce penetration, accelerated by COVID-19, continues even post-pandemic 1.3 REMOTE WORK While COVID-19 brought about the rapid adoption of remote work, the ability to do so was highly dependent on wage levels. Employees working remotely have shown higher levels of satisfaction and productivity, especially when given flexibility to choose where and when to work from the office
  • 9.
    9 - Auguste Comte 1.1Socioeconomic Foundations “Demography is destiny” ”
  • 10.
    10 Population of LatinAmerica, 20211 MM of people Brazil Argentina Mexico Colombia 132 52 46 19 Chile 215 40% 24% 24% 23% 18% 16% 26% 54% 63% 63% 60% 59% 58% 60% 13% 14% 17% 23% 26% 14% 0-14 60+ Oceania 15-59 Europe North America Latin America & the Caribbean World Africa 6% Asia Population age breakdown, 20212 Population distribution by age cohort 2021 Median Age Change in Median Age vs. 2016 (years) 19 +0.3 30 +1.8 31 +1.8 32 +0.9 38 +0.9 42 +1.1 30 +1.3 Life Expectancy at Birth 62 72 73 79 78 77 71 Latin America’s demographic bonus* is slowly coming to an end due its aging population Latin America is home to 665 million people and stands to benefit from a comparatively young population Life Expectancy at Birth Note: (*) Demographic bonus is a condition in which the country’s productive age population is more than the non-productive population. Source: (1) The Economic Commission for Latin America and the Caribbean; (2) United Nations Department of Economic and Social Affairs
  • 11.
    11 23.0 17.5 5.0 4.2 3.2 1.6 1.3 China Latin America Mexico Brazil India Germany United States GDP by country/region,20221 Current prices, US$ T Latin America GDP by country, 20222 % of total Latin American GDP, US$ T Argentina 6% 26% 10% Colombia 32% Brazil 20% Rest of Latin America Mexico Chile 6% If Latin America were a single country, it would have the third largest GDP in the world $1.6 $1.3 $0.5 $0.3 $0.3 $1.0 Latin America’s GDP is greater than US$ 5T, with Brazil, Mexico, Argentina, Chile, and Colombia making up 80% of it Source: (1) International Monetary Fund; (2) World Bank
  • 12.
    12 Unemployment has remainedabove pre-pandemic levels, hindered by high levels of informality 2016 2017 2018 2019 2020 2021 Chile 6.0% Argentina Mexico 5.5% 9.1% 14.3% 10.9% 4.4% 5.4% 3.9% 4.9% 14.4% 8.1% India 8.7% US 6.7% 11.6% Brazil 27% Argentina 14% 39% 43% 54% Mexico Chile Advanced Economies ** Unemployment rate by country, 20221 % Labor informality rate by country, 2021*,1,2 % of total employment Brazil Colombia Note: (*) Informality refers to legal economic activities that are not taxed nor monitored by the government; (**) Advanced Economies as defined by the World Bank Source: (1) World Bank; (2) International Labour Organization “Employment and informality in Latin America and the Caribbean: an insufficient and unequal recovery” (2021)
  • 13.
    13 Share of netpersonal wealth by percentile, 20212 % of national wealth 1.0% 4.3% Brazil Chile Argentina 1.4% Colombia India Mexico US*** 1.7% 9.8% 5.8% 19.9% China** 44.4% Poverty rate by country, 20201* % of total population 90-99th 35% 61% 78% 26% India 71% 31% 65% 33% 99th+ Europe 46% Latin America 3% 35% 32% 37% China US 68% 32% Poverty and inequality remain high in Latin America: The top 1% of the population holds 46% of the wealth Note: (*) Poverty headcount ratio (%) at US$5.50 a day (2011 purchasing power parity); (**) Latest data is from 2011; (***) Latest available data is from 2019 Source: (1) World Bank; (2) World Inequality Database
  • 14.
    14 Middle class shareof the population, 20211,2* % of population 26% 48% 28% 61% Colombia 56% Argentina Chile Mexico Brazil 45% OECD Average** 44% 32% 22% 2000 2005 2010 2015 2020 37% Middle Class US$ 13-70 22% Poor US$ 0-5.5 39% Vulnerable US$ 5.5-13 Latin America share of population by income class*** % of population Growth of the middle class in Latin America has been stagnant since 2015 Note: (*) Middle class is defined as earning US$ 13-70 per day for LatAm countries and 75-200% the median national income for the OECD average, with the latest data available being from 2016; (**) OECD is a group of 38 countries, mostly advanced economies; (***) The source’s methodology changed in 2015 Source: (1) OECD “Society at a Glance 2019” (2019); (2) World Bank “The Gradual Rise and Rapid Decline of the Middle Class in LatAm and the Caribbean” (2021)
  • 15.
    15 The pandemic aggravatedpoverty and inequality in most Latin American countries Impact of COVID-19 on extreme poverty1 Increase in poverty rates during COVID-19 (difference in percentage points) 0.02 0.04 0.06 -0.04 0.00 -0.02 0.08 -0.06 Mexico Brazil Paraguay Peru Argentina Colombia Chile Costa Rica An increase in the Gini Coefficient represents an increase in inequality Gini Coefficient Change2 Circa 2019* and 2020 0.2 0.6 0.4 1.2 0.8 0.0 1.0 Mexico Colombia Bolivia Argentina Chile Peru Note: (*) For Chile, the data is from 2017, and for Mexico, the data is from 2018. For the remaining countries, the data prior to the pandemic is from 2019. Source: (1) World Bank, “COVID-19 and Economic Inequality” (2022); (2) IDB, “The Pandemic Is Increasing Inequality in Latin America”, (2022)
  • 16.
    16 Chile’s Election Signalsa Hard Left Turn Peru’s Polarized Election Reflects Democratic Malaise A New Group of Left-Wing Presidents Takes Over in Latin America June 2022 Gustavo Petro, a former guerrilla fighter of the left-wing M-19, is elected President of Colombia March 2022 Former student union leader Gabriel Boric is sworn in as President of Chile July 2021 Pedro Castillo, one of the key leaders of the 2017 teachers’ strike, takes office as President of Peru 2019 2022*** Right Leaning Left Leaning Center Gustavo Petro Wins the Election, Becoming Colombia’s First Leftist Leader Recent transitions of power in Latin America Latin America’s Political Heat Map1 Latin America is experiencing a recent resurgence of the political left, with many pointing to a new “pink tide”* October 2022 Brazil’s upcoming election will be a tight race** between the current president (Bosonaro) and a left- of-center former president (Lula), who if elected will further strengthen the tide ? Note: (*) The pink tide, or the turn to the left, was a political wave and perception of a turn towards left-wing governments in Latin American democracies moving away from the neoliberal economic model at the start of the 21st century; (**) According to polls; (***) Colombia’s value in the 2022 was updated after the 2022 election Source: (1) Agence France-Presse
  • 17.
    17 Brazilian population’s feelingstowards the institution of a military dictatorship in the country, 20221 % of population 12% 9% Not sure / no response In favor Against 79% Brazilian population’s perceptions on fraud risks in the upcoming election1 % of population Don’t trust Trust Not sure 11% Electronic voting 39% 50% 11% Not sure Low risk 39% 29% No risk High risk 21% Risk of electoral fraud This number reaches 69% among those who say they will vote for the incumbent President Jair Bolsonaro, one of the most outspoken critics of the electronic voting system in Brazil The Brazilian Federal Court of Account audited Brazil’s electronic voting system and concluded that it has adequate measures in place to mitigate risk of fraudulent incidents2 Brazilians remain overwhelmingly in favor of democracy, though doubts about the system persist + Source: (1) Atlantico and AtlasIntel Brazil survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=2,262, 2p.p margin of error at 95% confidence level); (2) Exame “Auditoria conclui que TSE tem mecanismos adequados para evitar riscos nas eleições” (2022)
  • 18.
    18 1.2 Digitalization - Heraclitus “Theonly constant in life is change.” ”
  • 19.
    19 54% 58% 62% 65% 69% 74% 78% 2016 2019 2017 2021 20152020 2018 95% 92% 92% 86% 81% 74% 70% 69% 62% 47% Colombia Mexico Brazil World Avg Argentina Chile China India Germany US Internet penetration in LatAm has surpassed that of China and India and is approaching that of developed economies Internet penetration rate by year and region Latin America, 2015-2021; Worldwide, 2021 Source: (1) World Bank; (2) We Are Social
  • 20.
    20 55% 61% 65% 69% 72% 77% 2021 2017 2020 2019 2018 2016 +7% 12% China Latin America 24% 76% US54% 88% 46% Android iOS CAGR Smartphone adoption rate has increased 40% over the last five years, with most devices running on Android Smartphone adoption rate in Latin America1 % of total population Smartphone operating system market share by region2 % of total Android and iOS devices Source: (1) GSMA; (2) Statcounter
  • 21.
    21 108% 85% 68% 57% 55% 29% 21% 14% 10% Chile Germany Argentina USUK China Colombia Mexico Brazil Mobile data continues to be expensive in some parts of Latin America, with data in Mexico and Colombia costing significantly more than in mature economies Brazil and Chile are exceptions: mobile data costs are lower than in the US and UK, and more in-line with China Mobile data cost in Mexico and Colombia is higher than in developed countries, while Brazil and Chile are cheaper Local Cost of 1 GB Mobile Data (2022) vs 1 Big Mac (per Big Mac Index, 2021)1,2* Percentage of 1 GB of mobile data per 1 Big Mac in Local Currency Note: (*) The Big Mac Index is compiled by the Economist to determine if currencies are at their correct level based on purchasing power parity Source: (1) We are Social; (2) The Economist
  • 22.
    22 30% 46% 69% 28% 62% 75% 36% 75% 56% Purchase Products Online Use Social Media 23% Play Mobile Games AccessOnline Banking Watch Videos Online 2022 2018 Using Internet 10.3 9.9 7.0 5.3 Watching TV Online 4.1 3.6 4.8 3.0 Using Social Media 3.7 3.3 2.2 2.0 Brazil China Mexico US Digital adoption has transformed everyday life for broad swaths of the Latin American population Percentage of Brazilians who… % of survey respondents Time spent daily by activity by country Number of hours Source: We Are Social
  • 23.
    23 16 30 26 14 14 14 29 23 16 20 Instagram WhatsApp YouTubeTikTok Facebook 2022 2021 2021 2022 WhatsApp Facebook Instagram Facebook Messenger Netflix TikTok Spotify Uber MercadoLibre iFood WhatsApp Facebook Instagram TikTok Netflix MercadoLibre Spotify Uber iFood Facebook Messenger In the social media category, WhatsApp remains the dominant platform and TikTok continues to gain traction Ranking of mobile apps in Brazil By monthly active users Brazilians’ usage of social media by year Hours spent per month by social media app Source: We Are Social
  • 24.
    24 33 84 120 140 155 168 178 2022(e) 2021 2020 2023(e) 2024(e)2025(e) 2019 Brazil alone had ~62 million active TikTok users in August 2022, the highest among Latin American countries 14 17 32 28 62 TikTok* 2022* 2020 2021 2019 While TikTok targets more affluent audiences, another Chinese rival, Kwai, targets blue-collar workers and lower-income populations, a strategy that has allowed it to go viral in more recent years Chinese social network giants TikTok and Kwai are increasingly popular in Latin America, particularly in Brazil Number of TikTok active users in Latin America Millions Growth of Kwai active users in Brazil Millions Note: (*) Numbers from August 2022 Source: Insider Intelligence, Data.ai, Google Trends, Rest of World, Atlantico Analysis
  • 25.
    25 4% 7% Jan-18 Jan-20 3% 5% Jan-21 Jan-19 6% 11% 12% 13% 15% 14% Jan-21 Jan-20 Jan-19 16% Jan-18 17% 18% Back tothe Future: US e-commerce penetration reverted to pre- pandemic levels while Brazil stayed nearly 3 years ahead of trend Online share of total retail, United States % of total retail Online share of total retail, Brazil % of total retail Pre-Pandemic Trend Pre-Pandemic Trend Brazil saw e-commerce penetration reach and sustain levels 2.5 years ahead of the historic trend ~2.5x Note: Study analyzes all Mastercard anonymized transaction-level data for the researched economics Source: International Monetary Fund and MasterCard Economics Institute “E-commerce During Covid: Stylized Facts from 47 Economies” (2022) Sept-21 Sept-21
  • 26.
    26 Food and grocerydelivery continued growing well past the pandemic boom, as seen through category leader iFood iFood food delivery gross merchandise volume Indexed to December 2019 (=100) iFood groceries delivery gross merchandise volume Indexed to December 2019 (=100) Jul -21 Jul -21 Beginning of the COVID- 19 pandemic in Brazil iFood is Brazil’s leading food and grocery delivery platform, processing ~25% of total food delivery orders in the country, and nearly 80% when considering online aggregators only Beginning of the COVID-19 pandemic in Brazil Source: iFood internal data 100 5,518 11,094 14,102 13,554 14,163 Nov -20 Nov -21 2,089 Jun -22 Apr -20 Mar -21 9,920 Aug -20 1,130 Dec -19 Mar -22 100 204 234 287 288 315 338 378 Nov -21 Mar -22 Mar -21 Nov -20 Jun -22 Apr -20 157 Dec -19 Aug -20
  • 27.
    27 Beginning of theCOVID- 19 pandemic in Brazil 12.2 9.5 8.2 6.3 1Q19 0.2 2Q22 1Q21 4Q21 3.6 5.4 0.2 3Q21 0.6 2Q19 2Q21 1Q20 4Q20 3Q20 4.5 0.3 2Q20 4Q19 1Q22 3Q19 0.2 10.0 11.5 1,594 1,180 1,270 905 3Q19 789 3Q21 692 6 2Q22 4Q21 1Q20 1Q21 4Q20 1,732 1,272 58 3Q20 646 4Q19 2Q19 9 2Q20 14 1Q19 13 2Q21 1Q22 Telemedicine sustained strong growth since the pandemic as we see from Conexa, a leading health platform Conexa Saúde registered user base Millions of users Conexa Saúde number of appointments Thousands of appointments Conexa Saúde is the biggest independent telemedicine and digital health platform in Brazil, managing 20M+ lives Beginning of the COVID-19 pandemic in Brazil 4Q19 34% 1Q22 11% 1Q20 30% 3Q21 34% 1Q21 26% 1Q19 2Q20 26% 2Q21 19% 35% 3Q20 29% 4Q20 2Q19 2Q22 4Q21 3Q19 Share of mental health appointments Number of appointments Note: Prior to the pandemic, there wasn’t regulatory backing and framework for telemedicine in Brazil, but the pandemic cleared the way for regulatory acceptance Source: Conexa Saúde internal data
  • 28.
  • 29.
    29 Not Going Back:Following the shift to remote work, software developers are no longer open to working in-office 24% 68% Q4 23% Q1 66% Q2 17% 68% Q1 66% Q4 19% 60% 61% Q3 60% 23% Q2 Q1 55% 65% 20% 58% 54% 60% Remote Positions 58% Q1 Q4 58% 70% 48% 63% Q2 21% Q3 Q3 62% 58% 19% 59% In-person Positions Q2 2019 2020 2021 2022 Software developer job interview acceptance rate by remote vs. in-person job position, Brazil % Revelo is an American platform for selecting and hiring tech talent from Latin America Source: Revelo internal data (n = 124,000 software developers)
  • 30.
    30 Distribution of remotework models by sector % of respondents 30% 49% 18% Health & Pharmacy 27% 21% 16% Financial Services 36% 18% 25% 34% 8% 9% 19% Consulting 23% 22% 30% Education 38% 19% 48% 32% 7% 46% 31% Logistics & Manufacturing Commerce 4% 52% 11% 11% 58% 14% 5% 11% 27% Technology Marketing & Entertainment <25% remote 51%-99% remote 25-50% remote 100% remote 14% 36% 12% 28% 12% 17% 62% 19% Current policy (2022) Before COVID-19 (2020) 51%-99% remote 25-50% remote 100% remote <25% remote Most industries have increased levels of remote work, with tech and consulting showing the highest adoption rates Remote work distribution before and after COVID-19 % of respondents Atlantico and Runa surveyed over 500 executives and employees in Latin America. The full survey can be found here. + Source: Runa and Atlantico survey “The Future of Work in Latin America” 2022, collected from July 4th to August 23rd (n = 515 employees and executives in Latin America)
  • 31.
    31 26% 24% 7% 9% 52% 44% 41% 28% 22% 32% 52% 63% 100% Remote 51%-99% Remote 25-50% Remote <25% Remote 3.43.9 < 25% of team remote 25-50% of team remote Lower Productivity Same Productivity Higher Productivity 4.5 51-99% of team remote 4.6 100% of team remote Employees working remotely are estimated as having higher levels of both satisfaction and productivity Employee satisfaction by work model Average for each model, rating from 1 to 5 Employee productivity by work model % of respondents + Source: Runa and Atlantico survey “The Future of Work in Latin America 2022” (n = 515 employees and executives in Latin America)
  • 32.
    32 92% 59% 8% 41% Employees not given flexibilityto choose when to go to the office Employees given flexibility to choose when to go to the office High satisfaction (ranking 4 or 5) Low satisfaction (ranking 1, 2 or 3) 54% 30% 34% 51% 12% 19% Employees not given flexibility to choose when to go to the office Employees given flexibility to choose when to go to the office Higher productivity Same productivity Lower productivity This trend is seen to further improve when employees are given the flexibility to choose when to work from the office Employee satisfaction levels according to workplace flexibility % of respondents Employee productivity levels according to workplace flexibility % of respondents + Source: Runa and Atlantico survey “The Future of Work in Latin America 2022” (n = 515 employees and executives in Latin America)
  • 33.
    33 Latin America DigitalTransformation Report 2022 1. The Foundations 2. A Changing Landscape 3. Opportunities Ahead
  • 34.
    34 Latin America DigitalTransformation Report 2022 2.1 STATE OF VENTURE CAPITAL AND TECH While 2021 was a banner year for venture capital both globally and in Latin America, 2022 has seen sharp reductions in both public and private markets • While local funds have largely stayed the course, foreign investors are slowing investments in the region • Although ~30% of companies saw layoffs and postponed fundraising plans, layoffs were relatively small, and most companies plan to resume fundraising in the next 12 months 2. A Changing Landscape 2.2 THE LATIN AMERICAN OPPORTUNITY Despite the devaluation in the tech sector globally, the case for tech in Latin America remains unchanged • The region shows massive potential when it comes to increasing tech penetration and solving regional problems, attracting top local talent • History shows that companies funded during market downturns tend to IPO at a higher rate than those funded in bull markets
  • 35.
    35 2.1 State ofVenture Capital and Tech - Jamie Dimon “My daughter asked me when she came home from school, ‘What's the financial crisis?’ and I said it's something that happens every five to seven years.” ”
  • 36.
    36 0.0% 0.2% 2.4% 1.2% 0.8% 1.4% 1.6% 2.0% 2.2% 1.8% 0.4% 0.6% 1.0% 2017 2018 2016 2015 3.5 2014 8.1 6.3 2011 20192020 2.9 3.9 4.5 2021 2.1 4.3 2.3 2.7 4.3 4.5 4.5 2010 2009 2013 2012 Federal Reserve Balance Sheet (US$ T) Interest Rate (%) 0 3,500 2,500 500 2,000 1,500 4,500 4,000 1,000 3,000 2013 2009 2017 2021 +78% The S&P recorded 70 all-time highs in 2021 Federal Reserve Interest Rates and Balance Sheet Fed balance sheet and Fed Funds rates*, 2009-2021 S&P 500 Adjusted Closing Value**, 2009-2021 Index value After the 2008 downturn, a growing money supply coupled with low interest rates fueled a decade-long bull market Note: (*) Average Fed Funds rates per year and average yearly Federal Reserve balance sheet; (**) Adjusted close price adjusted for splits and dividend and/or capital gains distributions. Source: Trading Economics
  • 37.
    37 171 158 214 290 259 294 621 2019 2018 2015 20172021 2020 2016 +111% NASDAQ index value (Dec. 12, 2021): 15,645 Global Venture Funding1 and Public Market Performance2 Investment in US$ B and NASDAQ Composite Index 2021 marked the peak of an age of capital abundance for tech companies when global venture funding doubled from 2020 Global venture funding (US$ B) NASDAQ Composite Index Source: (1) CB Insights “2021 State of Venture” Report; (2) NASDAQ
  • 38.
    38 4 9 18 26 $19 2019 2021 $35 2020 2018 $46 $65 182 197 249 463 439 508 851 0 5 10 15 20 25 $15.7 $4.2 $0.5 $2.0 $1.1 $0.6 20192021 2020 $4.9 2018 2017 2015 2016 Growth in Funding (2020-2021) 274% Unicorn Value Growth (2020-2021) 41% Latin American Unicorns1* Private market capitalization in US$ B and number of unicorns Venture Funding in Latin American startups2 Investment amount in US$ B and number of deals The 2021 apex was similar in Latin America: Funding tripled, and both the number and value of unicorns rose meaningfully Market capitalization Number of unicorns Investment amount Number of deals Note: (*) A unicorn is a private technology company valued over $1B; only unicorns that were active at the time are counted, meaning unicorns that had exited (i.e., acquired or went public) – such as Stone, VTEX, Nubank, dLocal, etc. - have not been included. The calculation is based on latest estimated private market valuations Source: (1) Atlantico Analysis; (2) LAVCA “Industry Data and Analysis, Q2” (2022)
  • 39.
    39 MEXICO Capital Invested: 22% BRAZIL CapitalInvested: 48% COLOMBIA Capital Invested: 10% CHILE Capital Invested: 6% ARGENTINA Capital Invested: 8% Capital Invested: 6% Investment by Tech Vertical in Latin America, 2021 % of capital invested** 39% 20% 6% 9% 3% 4% 3% 3% 13% Edtech Proptech Other E-Commerce Solutions Super Apps E-Commerce Platforms & Marketplaces HRtech Logistics Tech Fintech 2021 venture investment activity was led by Brazil and by verticals like fintech, e-commerce, and marketplaces Note: (*) Percentage of capital invested is rounded to the nearest whole number; breakdown by total number of deals very closely follows percentage of capital invested: Argentina:7%, Brazil: 49%, Colombia: 9%, Chile: 10%, Mexico: 19%, Regional investments & other: ~7%; (**) Where “other” includes Healthtech (2%), Foodtech (2%), Agtech (~1%), Digital Security (~1%), Transportation & Mobility (~1%) and other tech categories. Source: LAVCA “Industry Data and Analysis” (2021) REGIONAL INVESTMENTS & OTHER VC Investments Geographical Breakdown, 2021 % of capital invested*
  • 40.
    40 0 50 100 150 200 250 300 350 Energy 2022 2021 2020 Food 9.1% 0 1 2 3 4 5 6 7 8 9 10 2020 2022 2021 2019 1.6% 1.8% 0.3% 2.5% 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 2.6 2020 2022 2021 0.3% 1.0% 0.5% 1.8% Inflationin the US2** % Interest Rates in the US2 % Commodity Prices1* US$ A global rise in commodity prices, supply chain disruptions and excess money led to hikes in inflation and rates in 2022 Note: (*) 2016=100, data until June 30th 2022; in terms of U.S. dollars, weights based on 2014-2016 average world export earnings, where energy includes petroleum, natural gas, coal and propane and where food includes cereals, vegetable oils, meat, seafood, sugar, and other (vegetables, non-citrus fruit, oranges, groundnuts/peanuts, bananas, dairy products, legumes and fishmeal); (**) Inflation data until June 30, 2022; (***) available Fed fund rates date from January 1, 2021 until July 27, 2022. The next Fed announcement is scheduled for September 21 (the day after this report goes to press) and market expectations are for a hike of 75bps to the ~3% level Source: (1) IMF; (2) Trading Economics
  • 41.
    41 177.8 108.5 Q2 2021 Q1 2021 Q4 2020 Q3 2020 Q4 2021 Q1 2020 Q4 2019 Q1 2022 Q3 2021 Q1 2018 Q2 2019 Q4 2018 Q2 2018 Q3 2019 Q2 2022 Q3 2018 Q2 2020 Q1 2019 NASDAQ: - 30% Global VC Funding: -39% Comparison Q4’21 to Q2’22 NASDAQ* Global VC Funding2 11,265 Global Venture Funding1 and Public Market Performance1 Investment in US$ B and NASDAQ Composite Index 15,645 2022 has seen a sharp stock market downturn, coupled with reductions in both public and private investments Note: (*) NASDAQ values as of June 30, 2022 Source: (1) NASDAQ; (2) CBInsights “State of Venture Report, Q2” (2022)
  • 42.
    42 Recent Trends** Non-profitable techcompanies experienced a sharp drop in stock prices in 2022, nearly reverting to pre-pandemic levels Goldman Sachs Non-Profitable Technology Index* Indexed basket of US-listed profitless tech companies 0 50 100 150 200 250 300 350 400 450 H2 2019 H1 2021 H1 2020 H2 2021 H1 2019 H2 2020 H2 2022 -68% Since peaking in 2021, tech companies' valuations dropped steeply, with the index losing around two-thirds of its value at its trough thus far H1 2022 Note: (*) Created in 2021, the GS Non-Profitable Tech basket consists of non-profitable US listed companies in innovative industries, as defined by Goldman Sachs to be broad and include new economy companies across industry groups; it is optimized for liquidity. The index is an absolute measure of the value of this basket. Data until August 31st 2022. Source: Bloomberg
  • 43.
    43 69 66 66 5760 60 85 92 133 152 163 178 142 109 Q2 Q2 Q4 Q1 Q2 Q4 Q4 Q3 Q1 Q1 Q3 Q1 Q2 Q3 -20% -39% 2.0 0.6 0.8 2.4 1.7 0.9 5.0 Q4 Q2 Q2 1.4 Q4 1.3 Q3 1.7 2.8 Q2 5.3 0.5 Q3 Q3 3.9 Q1 Q1 Q2 Q1 Q4 Q1 -27% -39% 2019 2020 2021 2022 2019 2020 2021 2022 Unlike the global trend, Latin America peaked in Q3 2021, and faced a steeper drop as it moved into Q4 Global venture funding decreased by ~40% in the first two quarters of 2022, with the same trend present in LatAm Global Venture Funding1 Investment amount in US$ B Latin America Venture Funding2 Investment amount in US$ B Source: (1) CB “Insights State of Venture Q2” (2022); (2) LAVCA “Industry Data and Analysis, Q2” (2022)
  • 44.
    44 -58% decrease in investmentsby foreign investors from 2021 to mid-2022 -34% decrease in investments by local investors from 2021 to mid-2022 Recent Trends Among Top 20 Investors Foreign investors are slowing down in the region (but not leaving) while local funds have taken some share of activity Total investments by the 20 most active investors in Latin America Total investment count attributed to top 20 investors in trailing twelve months and % of those deals accounted for by foreign investors 70% 70% 53% 64% 70% 68% 52% 54% 51% 41% 39% 36% 49% 53% 30% 30% 47% 36% 30% 32% 48% 46% 49% 59% 61% 64% 51% 47% Q4 Q2 Q1 Q1 Q4 Q3 Q3 Q3 Q2 Q2 Q2 Q4 Q1 Q1 Local investments Foreign investments 2019 2020 2021 2022 Note: (*) In cases there was a tie in the 20th investor, all investors with same deal count were included. Only investments in Brazil, Mexico, Argentina, Colombia and Chile were analyzed. “Investment” is defined as a check by an investor in a financing round (multiple “investments” by different investors can exist in a round). Additionally, the total number of deals had continuously increased between 2019 and 2020 Source: Crunchbase funding rounds (top 20 investors in number of deals); Atlantico analysis
  • 45.
    45 -66% decrease in late-stagefunding between Q4 2021 and Q2 2022 -35% decrease in early-stage funding between Q4 2021 and Q2 2022 -67% decrease in seed-stage funding between Q4 2021 and Q2 2022 Early Stage* Angel-Seed Q2 2022 $1.0 $0.2 Q4 2021 $1.5 $2.9 Q3 2021 Late Stage* $0.3 $3.5 $1.6 $1.1 $1.7 $1.7 $0.6 $1.3 $0.4 $5.0 Q2 2021 Q1 2022 $0.2 Recent Trends Venture funding slowdown was first felt in the later stages but has started to trickle down to early stage and seed Latin American investment volume by stage Investment amount in US$ B Note: (*) Early Stage considers Series A and B private deals, while Late Stage considers Series C+ private deals Source: Crunchbase News “LatAm Venture Investment Shrank Q2 2022 Monthly Recap” (2022)
  • 46.
    46 57% 40% 11% 5% 40 20 10 25 0 30 35 5 15 Scared Cautious Concerned aboutjob security Optimistic or excited Looking ahead to 2023, the mood among tech workers in Latin America can be said to be “cautiously optimistic” Feelings about the upcoming year in the tech market % of survey respondents by sentiment + Atlantico and Vertico conducted primary research with 200+ tech workers in Latin America of varying seniority Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
  • 47.
    47 Unicorn founders' sentimentand plans Average of respondents, % respondents 50% 33% 37% 36% 26% Shrink and emerge weaker Be agressive and emerge stronger against competition Reduce burn and emerge stronger 5% End up as write-offs or firesales Need to do down rounds or raise at lower valuations 4% 9% Own Company Most Unicorns When asked how they feel about the next 2 years, on a scale of 1 to 10, unicorn founders presented an average sentiment of: 7.3 Excited about market and business prospects Afraid about market and business prospects Atlantico’s annual gathering for all Brazilian Unicorn founders and CEOs Goal: Promote industry discussion and strengthen community among the most valuable private tech companies of Brazil Off-the-record discussions of critical industry and leadership topics; during the event Atlantico surveyed unicorn founders on various key themes Source: Atlantico Survey with founders of 17 Brazilian unicorns (out of the 18 in the country), collected in August 2022 View from the Top: Brazilian Unicorn founders shared a measured optimism at Atlantico’s Good View Summit 0% 0%
  • 48.
    48 Early-stage company founders'sentiment Average of respondents’ selection Founders’ expectations for their companies (next 1-2 years) % of respondents When asked on a scale of 1 to 10 their feeling towards the financing market in the next 1-2 years, early-stage companies displayed an average sentiment of: 42% 9% Believe to be in a position of strength and will win against competitors In survival mode, cutting costs and preparing for the worst Not changing previous plans Believe that after some adjustments will be in a great position to raise more money 47% 2% Source: Atlantico Survey, collected in June 2022 (n = 45 early-stage companies) Not Just Unicorns: Founders at every stage recognize the market downturn but feel they won't be hit as hard as peers 5.4 10 - Very optimistic 1- Not optimistic
  • 49.
    49 Size of techcompany layoffs1 % of employees estimated to have been affected by layoffs 80% 15% 3% 1% 26-50% of employees > 50% of employees 10-25% of employees <10% of employees 5% 20% 10% % 0 30% 25% 40% 35% Between 6-12 months Between 18-24 months Between 24-30 months Between 30-36 months Between 36-42 months Less than 6 months Between 12-18 months Expected runway before and after change in market2 After change in market Before change in market Companies with less than 1 year of cash adapted plans to have at least 1.5 years Companies with more than 1.5 years of cash are aiming to have at least 2 years Source: (1) Runa and Atlantico survey, “The Future of Work in Latin America 2022”, collected from July 4th to Aug 28th (n = 515 HR leaders and employees in 500 companies in Latin America); (2) Canary Cash Burn Study (n = 27 early-stage companies, Seed to Series Bs; Conducted on July 1st, 2022) Companies have responded to market drops by modestly adjusting headcount and only slightly extending runway
  • 50.
    50 Main actions takento preserve cash % respondents 0% 10% 20% 30% 40% 50% 60% 70% Tech stack & 3rd party services optimization Renegotiations / Change of Suppliers Founders’ salary reduction Focus on Unit Economics Refinanced debts Reduction of Marketing Expenses Decreased office space or went fully remote Layoffs / Change in Team Structure Hiring freeze / Slowed down hiring Main departments with layoffs % companies 0% 5% 10% 15% 20% 25% Customer Service People Operations Finance Tech Product Marketing Sales Source: Canary Cash Burn Study (n = 27 early-stage companies, Seed to Series Bs; Conducted on July 1st, 2022) Headcount reductions were one of many strategies used to preserve cash and were focused on operations and sales
  • 51.
    51 2.2 The Latin American Opportunity ” -Tom Jobim “Living abroad is good but sucks; living in Brazil sucks but is good.”
  • 52.
    52 100% 10% 2005 0.1% 2020 1% 2015 2010 India LatAm Brazil USA China 5% 2% 1% 3% 4% 2015 2020 2005 0% 2010 Brazil LatAm Tech penetrationgrew massively around the world over the past two decades, with Latin America starting much later Atlantico Digital Transformation Index Tech company market cap as % of GDP, log scale Atlantico Digital Transformation Index, Brazil Tech company market cap as % of GDP Brazil is ~10 years behind China (at 2012 levels) Note: HQ location was used to define company region; for all countries we used the average of the respective year’s quarters to calculate GDP and market cap Source: (1) Capital IQ; (2) GDP projections from OECD, log scale; (3) Atlantico analysis China is ~8 years behind the US (at 2014 levels)
  • 53.
    53 52% 20% 15% USA 3% 1.5% China India Brazil Latin America Latin Americawill have massive value creation in the decade to come as it catches up in tech penetration Atlantico Digital Transformation Index Tech company market cap as % of GDP, Q2 2022 Latin America Tech Value Creation Catch-up Potential US$ B Catchup to India Latin America Catchup to China Catchup to USA Latin America +$791 B Latin America +$974 B Latin America +$3.15 T Note: HQ location was used to define company region; for all countries we used the average of the respective year’s quarters to calculate GDP and market cap Source: (1) Capital IQ; (2) GDP projections from OECD; (3) Atlantico analysis
  • 54.
    54 Dot.com Bubble GlobalFinancial Crisis 702 459 636 793 1,064 1,217 1,653 1,682 1,266 1,593 1,973 2,270 2.5% 3.0% 1.5% 0.0% 1.0% 2.0% 0.5% 2001 2006 2000 2012 2004 2010 2003 2009 2002 597 2008 2005 2011 2007 Number of Companies that raised a Series A %IPO IPOs based on year of Series A funding Number of companies that raised Series A in the corresponding year and % that went public to date Companies that raised capital in recent market downturns IPO’d at higher rates than those funded in bull markets Source: Pitchbook, Filters: series A, last funding type: IPO, publicly held
  • 55.
    55 2021 2022 20212022 2021 2022 Latin America United States China 2490 2458 1967 1710 1119 900 650 638 502 448 2253 1946 1475 1108 710 604 484 466 458 416 76 67 65 60 41 39 33 32 32 23 77 64 62 58 58 50 39 34 31 31 422 378 310 240 190 169 159 157 156 138 588 447 354 243 235 225 205 171 156 138 Largest companies in Latin America Market capitalization in US$ B The largest companies in Latin America are still “real economy” companies rather than tech companies Source: Capital IQ, data extracted August 4th, 2022, 2021 market capitalization corresponds to 9 months prior to that date (November 4th, 2021) and 2022 market capitalization set to 1 month prior to that date (July 4th, 2022)
  • 56.
    56 MEXICO BRAZIL COLOMBIA CHILE ARGENTINA ECUADOR 2018 2022 2022 2021 2022 20202021 2022 2018 2019 2020 2021 2022 2021 32.1 17.4 7.7 3.7 3.3 2.7 2.3 0.9 0.8 0.6 Inflecting: The growing number of large tech companies in LatAm shows continued value creation from digitalization Largest public tech companies1* Market capitalization in US$ B as of June 30th, Latin America Active Unicorns in Latin America2** Valuation above US$1 B, 2022 Note: (*) A unicorn is a private technology company valued over US$ 1B; (**) Only unicorns that were active at the time are counted, meaning unicorns that had exited (i.e., acquired or went public) – such as Stone, VTEX, Nubank, dLocal, etc. - have not been included Source: (1) Capital IQ, data from June 30th, 2021, (2) Atlantico Analysis
  • 57.
    57 $2.9 $4.5 $5.3 $2.6 $8.7 $0.3 $3.0 $6.7 $2.3 $2.1 $0.3 $4.8 $5.1 $0.8 $2.8 Valuation $0.8 $3.7 $0.8 $0.6 $2.5 $1.9 $0.9 $3.0 $2.5 $3.1 $0.5 $4.3 $2.3 $2.0 Total Capital Raised $3.9 Valuation and totalequity capital raised of the 10 highest valued Latin American unicorns* US$ B Top 10: The highest valued Latin American unicorns collectively raised $9B and are worth $42B in total Note: (*) Unicorns refer to private technology companies with a valuation of over US$ 1B, with valuations being based on the latest round prior to Aug. 19th, 2022 Source: Atlantico Analysis, PitchBook, Crunchbase, Companies Market Cap
  • 58.
    58 21% 16% 16% 11% 8% 29% Other Big Tech Startup Industry & Corporate Consulting Finance TechTalent Pool Entrepreneurial Ambition Students’ most desired areas to work in the short-term2 % of survey respondents Entrepreneurial aspirations among students % of respondents who have plans to found startups 20% 9% 12% 34% 25% Yes, in the next 4 years Not sure No Yes, 5-10 years from now Yes, 10+ years from now Atlantico conducted primary research with nearly 300 students from 60 universities to understand their career aspirations Flight to Tech: Top university talent continues to seek tech jobs above all others despite recent market turbulence Note: “Other” category’s main areas include Research and Academia (6%), Medicine (5%), Law (5%), Government (4%) and non-profits (3%) Source: Atlantico Study, June 2022 (n = 279); 111 students in 20 universities in Brazil, 168 Latin American students in 40 universities abroad
  • 59.
    59 Latin America DigitalTransformation Report 2022 1. The Foundations 2. A Changing Landscape 3. Opportunities Ahead
  • 60.
    60 3.1 FINTECH While FinancialServices is still the top category for LatAm venture investment, there is a shift underway from B2C to B2B fintechs. Initiatives like Open Banking, Pix, and Open Finance are increasingly gaining traction and are poised to bring lasting changes 3.2 SMB DIGITALIZATION SMBs constitute over 95% of businesses in LatAm, but growth and productivity are stymied by low digital maturity. To address this gap, startups tailored for SMBs emerged, tackling these pain points related to limited access to capital and inefficient backend management 3.3 WEB3 & CRYPTO Latin America’s unique socio-political challenges over the last few years have set the stage for innovative web3 solutions. This explosive growth is evidenced by the existence of over 100+ web3 startups in Latin America, across many verticals 3. Opportunities Ahead Latin America Digital Transformation Report 2022
  • 61.
    61 3.1 Fintech ” - ABBA “Allthe things I could do if I had a little money”
  • 62.
    62 49% did not borrowany money in 2020 >300MM people1* 26% are still unbanked >150MM people1** Is the ranking of the highest-ranked Latin American financial center (Mexico City, Mexico) in the latest GFCI2 #60 $1.1 Other $0.5 $1.4 42% $4.0 $0.7 $6.1 Super Apps $0.5 Edtech 3% HRtech 7% Fintech 3% Logistics 10% 5% Proptech 3% E- commerce $0.4 27% Financial Services remains the top category for venture investment in LatAm given the continued large opportunity Percentage of Latin Americans over age 15 who… VC Investment by category in Latin America, 20213 US$ B and % of total venture capital investment Note: (*) For reference, this percentage is equal to 24% in the US. (**) For reference, this percentage is equal to 5% in the US and, for this analysis, unbanked is considered not having an account in a financial institution Source: (1) The World Bank, “Global Findex Database 2021” (2022); (2) Z/Yen, “Global Financial Centers Index” (2022); (3) Latin American Private Equity & Venture Capital Association, “LAVCA Trends in Tech” (2022)
  • 63.
    The fintech (r)evolutionin Latin America is expanding its reach in full force Wave 1: B2C Fintech Innovation Wave 2: B2B Fintech Innovation Building blocks Central Banks around LatAm have been key to the evolution of fintech, with open banking and instant payments Infrastructure has evolved rapidly to match changing customer expectations and accelerate the digital revolution “The secret to success is to do the common things uncommonly well.” - John D. Rockefeller The first wave of fintech was defined by disruption of traditional B2C models and inclusivity “History never repeats itself, but it does often rhyme.” - Mark Twain Now the same high standards are being pursued in transforming B2B models
  • 64.
    64 In March 2022,the Central Bank launched its Open Finance Project to transform FX, investments, insurance, and pension as Open Banking is doing to traditional banking services BRAZIL CHILE In August 2021, the Chilean Ministry of Finance published guidelines for a regulatory framework that promotes the development of Open Finance COLOMBIA Guidelines for Colombia’s Open Finance system are expected to be published soon after public consultation ARGENTINA Transfers 3.0, the country’s real-time payment scheme, was launched in November 2021 Successful Open Banking API calls in Brazil2 Millions Reduces the cost of financial services by democratizing access to customer data Paves the way for new businesses by enabling new models and reducing incumbents’ data access advantage 0.7 5.3 5.4 96.4 360.7 Jun-22 Feb-22 Oct-21 Jun-21 Feb-21 As Open Banking & Finance gains relevance in LatAm, it is expected to bring continued innovation and changes Open Banking’s effects on traditional finance Current state of Open Banking & Finance1 2022 Source: (1) Belvo “The state of open banking in Latin America in 2022” (2022), Ministerio de Hacienda y Crédito Público de Colombia, Ministerio de Hacienda de Chile, Banco Central do Brasil, Banco Central de la República Argentina, Atlantico Analysis; (2) Open Banking Brasil
  • 65.
    65 Pix, a briefhistory of the future Pix is Brazil’s instant payment system. It is free to use, available 24/7, and can be used by individuals, businesses, and the government. Launched in November 2020, Pix has taken Brazil by storm. Pix was developed by the Brazilian Central Bank in partnership with private financial institutions. It is integrated into the apps of banks and digital wallets with high visibility to the user, as required by the Central Bank. From the users’ perspective, they only need to register a unique key to use Pix. This key can be one’s phone number, e-mail address, tax ID number (CPF), or a randomly-generated code. Each key is tied not only to one unique individual or business, but also to a single financial institution and account. This allows users to have different keys for different banks and accounts. To pay with Pix (or ‘make a Pix’ in the new colloquialism), a user taps the Pix button or link in their financial institution’s app, fills in the receiver’s unique key, the amount to be paid, an optional note, and securely confirms the transfer. The whole process can also be completed by scanning a QR code, now as ubiquitous in Brazil as the street vendors that happily use them. Pix. It’s that simple.
  • 66.
    66 Number of transactionsby digital payments in Brazil Billions 30 274 475 624 785 889 934 986 Mar-22 Aug-22 Mar-21 Jul-22 Nov-20 Jun-22 Jul-21 Nov-21 33x TED Other Boleto + Convênio Pix Q1 Q4 3.9 Q3 2.9 1.9 4.3 Q1 Q2 3.0 3.5 0.9 Q4 Credit Card 0.0 Q2 0.2 Debit Card Q1 2.8 3.0 Q4 Q3 2.8 Q3 Q1 Q2 2.5 2019 2020 2021 2022 Pix is eating digital payments in Brazil Pix total payment volume R$ B Note: (*) The US Dollar to Brazilian Real exchange rate on August 12, 2022 was 5.08 and averaged 5.12 in 2022 Source: Banco Central do Brasil
  • 67.
    67 Pix is eatingdigital all payments in Brazil Pix is tied with cash for daily frequency of use in Brazil % of population 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 35% 34% Pix Cash + Source: Atlantico and AtlasIntel Brazil survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=2,262, 2p.p margin of error at 95% confidence level)
  • 68.
    68 1.0 75 2.0 5.9 11 20 0.0 Months Post-Launch Pixtook just 11 months to reach 1B transactions per month, which is ~1/4 as long as it took UPI to reach the same number UPI (India) Pix (Brazil) Pix’s adoption has significantly outpaced the early traction of India’s UPI, which was launched 4 years earlier Monthly transaction volume by number of months post-launch1,2 Billions Source: (1) Banco Central do Brasil; (2) National Payments Corporation of India
  • 69.
    69 4.2 9.0 9.5 5.0 2.0 0.5 9.0 8.5 8.0 4.0 2.5 6.0 5.5 7.5 0.0 4.5 3.5 7.0 3.0 6.5 1.5 UPI Pix 2x Pix isalready used by most of the Brazilian population and at a much higher frequency than UPI in India Per capita monthly transaction volume, June 20221,2,3 # of transactions Number of Pix users1* Millions 39 76 96 108 116 122 Aug-22 Jul-21 Mar-21 Nov-21 Mar-22 Nov-20 50% of Brazilians Note: (*) Excluding registered businesses Source: (1) Banco Central do Brasil; (2) National Payments Corporation of India; (3) World Bank
  • 70.
    70 Post-launch features released Pixintegrates with phones’ contact list Select types of Pix transfers are capped at R$1000 between 8:00pm and 6:00am, citing safety concerns QR codes enable Pix users to make transfers at a faster rate Two new Pix modalities, Withdrawals (Saque) and Change (Troco), enable consumers to exchange Pix transfers for cash at stores Features to come Collection (cobrança) will enable businesses to generate dynamic QR codes for Pix payments that include information such as value and due date, potentially replacing boletos** Guaranteed (garantido) will enable consumers to use Pix for installment payments, as they would with a credit card, by having their financial institution guaranteeing the payment New forms of payment initiation, including NFC, Bluetooth, RFID and facial recognition International (internacional) will enable Pix to be used for international transfers Reinforced by its prompt adoption, Pix has an extensive roadmap of features that will unlock new opportunities Note: (*) Up until June 31st, 2022; (**) Boletos are a popular cash-based post-pay method in Brazil Source: Banco Central do Brasil, Atlantico Analysis
  • 71.
    71 45% 41% 41%38% 55% 59% 59% 62% Business Aug-22 Feb-21 Aug-21 Personal Feb-21 115 105 89 123 63 131 Personal Aug-22 126 11 Nov-20 10 Feb-22 Aug-21 98 137 15 114 83 9 May-21 121 107 7 Feb-21 58 Nov-21 8 May-22 1 Business 4 6 14 Pix had its early adoption driven by individuals and is now increasingly being used in business transactions Total registered accounts by type of user* Millions Payment value volume by transaction nature % Note: (*) In this case, “accounts” means keys, which are payment addresses that can each be linked to one sole bank account at a time by a Pix user Source: Banco Central do Brasil
  • 72.
    72 Fintech Infrastructure companieshave accelerated the flywheel of innovation in the sector By reducing the cost (money and time) to launch a fintech, infrastructure companies have enabled both new B2C entrants but also the current B2B wave “The most radical and transformative of inventions are often those that empower others to unleash their creativity – to pursue their dreams.” - Jeff Bezos act as a bank make and receive payments If you want to… Fintech Infrastructure
  • 73.
    73 Dock as apayment institution1* Total payment volume and active accounts 5.20M 2.60M 2.60M 2022** R$ 10B 2.07M 2021 2018 R$ 389k 2020 R$ 50.6B 2019 R$ 722M 29k 435k R$ 88.4B Dock, one of the most recent unicorns in Brazil, offers the infrastructure for companies to integrate card issuing and processing, digital banking, and risk & compliance A leading provider of fintech infrastructure in Latin America, Dock dematerializes finance to unlock business potential Active accounts H2 2022 forecast Total payment volume Dock as a card provider1,2 Card transaction volume in R$ B and % of total volume in Brazil R$ 51.1B R$ 28.9B 2022** 2021 4.7% 93.8M 5.9% 93.8M R$ 123.7B 2.6% R$ 187.6B 2020 2019 1.6% Absolute value (R$ B H2 2022 forecast Market share Note: (*) Active accounts are those with cashout in the last 30 days, 2022 data is reflective of June 30th of that year, and the US Dollar to Brazilian Real exchange rate on August 12, 2022 was 5.08 and averaged 5.12 in 2022; (**) Actual values for H1 2022 were doubled to estimate full year equivalent Source: (1) Dock internal data; (2) Associação Brasileira das Empresas de Cartões de Crédito e Serviços
  • 74.
    74 100 429 371 279 217 Jun-22 121 322 Jul-22 Mar-22 Apr-22 May-22 Feb-22 Jan-22 15 18 31 43 49 57 67 Jun-22Jul-22 Apr-22 Feb-22 May-22 Jan-22 Mar-22 Pomelo offers a regional cards and payments infrastructure for fintechs to launch and scale in Latin America Pomelo number of business customers Pomelo allows companies to offer prepaid, debit, credit, crypto and corporate cards to over 450M people in 5 markets. Pomelo contracted annual recurring revenue Indexed to January 2022 (=100) Source: Pomelo internal data
  • 75.
    75 Neon Santander C6 Itaú Nubank Bradesco Banco deBrasil 57% of small business respondents1 bank at these four traditional banks Traditional Banks Challenger Banks 51% 59% 63% 70% 64% 74% 49% 41% 37% 30% 36% 26% 2020 2019 2016 2017 2015 2018 Average or Worse Very Good or Good -20 -38 9 -16 44 2 0 While B2C offerings improved, B2B customers remained dissatisfied with the incumbent financial service providers Net Promoter Score by bank in Brazil, 20211 Brazilian small business’ banking satisfaction2 % of total respondents Source: (1) Idwall “Melhor Experiência Digital” (2021); (2) Serviço Brasileiro de Apoio às Micro e Pequenas Empresas “Financiamento dos Pequenos Negócios no Brasil” (2020)
  • 76.
    76 For example, Nubankis replicating its “unbundling & re- bundling” strategy for B2B with accounts for businesses 1.1 1.4 1.6 Q4 2021 Q1 2022 Q3 2021 46% of Nubank’s SME customers were first-time users of financial services Many other digital banks also offer accounts for businesses B2C innovation coupled with evolving fintech infrastructure have energized entrepreneurs to target B2B needs Nubank number of business accounts1 Millions cards & spend management Examples of B2B fintechs in Latin America payments banks B2B2C insurance Source: (1) Nubank SEC F-1 (2021) and Q1 2022 Earnings Presentation (2022); (2) Banco Central do Brasil “Relatório de Economia Bancária” (2020)`
  • 77.
    77 Jul-22 53 118 181268 367 523 672 6,343 3,485 2,873 2,232 5,682 4,300 5,133 1,290 803 1,800 1,014 100 179 295 327 416 540 674 4,188 Mar-22 Jul-21 Jan-22 May-22 Nov-21 Sep-21 1,541 2,018 2,622 3,337 1,129 844 Mar-21 Aug-21 Mar-22 Aug-22 Clara offers companies an end-to-end spend management platform and exemplifies the current B2B fintech movement Clara, active in Mexico, Brazil, and Colombia, is a leading corporate credit card, payment solution, and expense tracking platform for businesses Clara number of onboarded companies Clara total payment volume Indexed to July 2021 (=100) Source: Clara internal data
  • 78.
    78 “Humans are tool builders.We build tools that can dramatically amplify our innate human abilities.” 3.2 SMB Digitalization ” - Steve Jobs
  • 79.
    79 Peru Colombia 1% 93% 85% 90% 5% 2% 9% 1% 13% Brazil UK 14% 1% US 82% 6% Mexico 3% 79% 1% 17% 95% 3% Micro Medium Small Large 60% 50% United States3Europe4 50% 56% 40% Latin America2 75% 25% China5 44% SMBs* Large companies LatAm has a higher proportion of SMBs, although they contribute significantly less to GDP than in other regions Distribution of businesses by size per country1 % of all businesses Contribution to GDP by business size % of GDP Note: SMB means Small and Medium Businesses Source: (1) OECD, Financing SMEs and Entrepreneurship (2022); (2) IDB, ”MSME Financing Instruments in Latin America and the Caribbean During COVID-19“ (2020); (3) U.S. Small Business Administration, “Small Businesses Generate 44 Percent Of U.S. Economic Activity” (2019); (4) European Commission. “Unleashing the full potential of European SMEs” (2020); (5) Pingan, “China’s SMEs Amid the Pandemic” (2020)
  • 80.
    80 $81 United Kingdom $28 $62 Mexico $77 $27 $94 $61 $36 $90 $42 $50 $88 $87 $62 $103 Germany Spain Brazil +243% +77% +45% +68% +42% Large (250or more workers) Small (10-49 workers) Medium (50-249 workers) One reason they contribute less to GDP is lower productivity levels for Latin American SMBs Labor productivity by firm size, business economy* Value added per person employed, US$ k Note: (*) The “business economy” covers mining and quarrying, manufacturing, electricity, gas, steam and air conditioning supply, water supply, sewerage, waste management and remediation activities, construction and business services (excluding finance and insurance activities) Source: OECD “OECD Compendium of Productivity Indicators” (2021)
  • 81.
    81 STAGE 1 DIGITAL INDIFFERENT STAGE2 DIGITAL OBSERVER STAGE 3 DIGITAL CHALLENGER STAGE 4 DIGITAL NATIVE SMB Digital Maturity Index (DMI) Singapore UK USA Germany Japan New Zealand Australia Thailand India Hong Kong Taiwan France Korea Mexico Brazil Chile Philippines Indonesia Vietnam Little to no digital efforts and skills Digital efforts in progress but tactical A digital strategy exists, but short-term Holistic strategy to digitally innovate Description 55% 1% 44% 0% Latin America 6% 55% 32% 7% United States 9% 53% 32% 6% Western Europe To be more productive, SMBs in Latin America must achieve greater digital maturity, leading to economic growth Small business digital maturity curve Countries categorized according to digital maturity index Canada China Note: The study examines eight countries throughout June 2020 (United States, Canada, Mexico, Brazil, Chile, United Kingdom, Germany and France) to better understand the opportunities and challenges small businesses currently face and the correlation between digital maturity and faster recovery Source: Cisco “2020 Small Business Digital Transformation” (2020)
  • 82.
    82 When analyzing SMBs across LatinAmerica, we find that 4 pain points have shaped the emerging tech ecosystem Limited access to capital and financial services Dependance on business management processes that are still largely manual Limited access and negotiating leverage vs. major suppliers Difficulty driving sales and building a loyal customer base
  • 83.
    83 $483 $164 $39 $8 $8 $86 $6 $4 $21 Country Concentration Access to Debit Cards Accessto Credit Cards Underbanked Brazil Top 5 banks: 80% 70% 33% 33% Mexico Top 5 banks: 69% 37% 30% 50% Colombia Top 5 banks 77% 52% 26% 32% 30% 35% 27% Caixa Banco do Brasil Itaú Bradesco 26% 29% Santander Success rate in obtaining credit with Brazil’s major banks4 % of small businesses that were able to obtain credit MSME* Finance Gap compares the estimated “potential demand”** for financing by MSMEs in emerging economics to the current supply of financing2 SMBs in Latin America face great difficulty in accessing capital, creating a substantial financing gap Micro, Small and Medium Enterprises Finance gap1 Finance gap in US$ B Current banking system organization3 % of population Note: (*) MSME is an acronym for Micro, Small and Medium Enterprises; (**) The notion of potential demand expresses the amount of financing that MSMEs would need, and financial institutions would be able to supply if they operated in an improved institutional, regulatory and macroeconomic environment. Source: (1) World Bank “MSME Finance Gap” (2) SME Finance Forum “MSME Finance Gap”; (3) a16z “Latin America’s Fintech Boom” (2021) (4) Sebrae “O impacto da pandemia do coronavírus nos pequenos negócios – 11ª edição” (2021)
  • 84.
    84 Cora active customerbase* Number of customers, thousands 4 14 39 71 136 206 February 2022 October 2021 October 2020 June 2021 June 2022 February 2021 52x Cora total monthly transaction volume R$ M 34 245 931 1,749 2,908 5,254 February 2022 June 2022 February 2021 October 2020 October 2021 June 2021 155x Cora is a Brazilian company focused on financial services for SMBs, a large and underserved market opportunity Business Model: Complete financial solution for businesses, providing freedom to charge and receive without bureaucracy and manage all expenses in a single place Digital business account (free account, with lower taxes and bureaucracy) Credit and debit cards for businesses (physical & digital, practical and with no annual fee) Integrated financial management (issue boletos** for free & integration with ERPs) Note: (*) Active customer base is defined as clients that completed at least 1 transaction in the last 30 days; (**) Boletos are a popular cash-based post-pay method Source: Cora internal data
  • 85.
    85 106 B 1.5 T TotalB2C Retail E-commerce B2C (7% share) 24 B 2.4 T Total B2B Retail B2B online (1% share) Online market penetration by country 7% 21% 25% 1% 14% 32% 20% 26% 32% 29% Middle East and Africa Latin America 37% Western Europe Asia Pacific North America 26% Central and Eastern Europe B2C B2B While e-commerce volumes have increased substantially in Latin America, B2B online sales still have room to grow Growth in E-commerce Sales by region, 20201 % change, YoY Brazilian E-commerce and Total Retail Market Size, 20212 Market size in R$ B2C B2B Source: (1) eMarketer “Latin America will be the fastest-growing retail ecommerce market this year” (2020); (2) InfraCommerce IPO Preliminary Prospectus (2021)
  • 86.
    86 Vertical-focused B2B marketplaceshave emerged to offer better prices and superior shopping experiences B2B marketplaces by OLX category and even more… Food & beverages Procurement Construction OLX is the largest classifieds website in Latin America, akin to Craigslist in the US
  • 87.
    87 Olist is aBrazilian unicorn with a full-suite solution to help SMBs drive sales online Business Model: Providing SMBs with the necessary tools to create their online business as well as ideal solutions to take it even further, including offerings such as Web design features Sales channels integrations Product and sales management ERP & Invoicing Reports and KPIs CX to promote conversion Olist active seller base Indexed to 2018 (=100) Brazil eCommerce market and Olist net revenue Indexed to 2018 (=100) 100 151 320 395 2022* 2021 2018 2020 2019 213 100 179 1,752 100 206 281 335 2019 2022(e) 2021 2018 2020 341 123 1,076 Marketplace integrations eCommerce market Olist net revenue Since 2020, Olist’s SMB-driven revenue has outpaced the overall eCommerce market growth by ~6x Note: (*) Result is the sum of actual values up to July 2022 and forecasted for the remainder of 2022, estimated by company Source: Olist internal data
  • 88.
    88 Excel or sheets ERP system Pen and paper Useof software for financial tasks2 % of respondents, Brazilian SMBs (Jun 2020) Automation of business processes3 % of respondents, Brazilian SMBs (May 2021) 61% 24% 15% 45% 22% ERP system 62% Business management system 63% 54% Payment system Financial management system Accounting system 27% 33% Digitize and integrate business processes 46% 2% Collect and store data for customer relationships 52% Technology to understand what value is to your customer Collect and store data regarding supply chain 49% 23% 28% 19% 55% 40% 26% Implemented Partially implemented Not implemented Business process management is still mostly manual, making tasks prone to error and extremely time consuming Primary tool used to control expenses1 % of respondents, Brazilian SMBs (Dec 2019) Source: (1) Capterra/Gartner; (2) Capterra “Pesquisa sobre adoção de fintechs a partir de open banking” (2020) (3) Agência Brasileira de Desenvolvimento Industrial “Maturidade Digital das MPEs Brasileiras” (2021)
  • 89.
    89 100 119 154 188 207 258 319 357 422 481 Apr -22 Jan -22 Jul -21 Jul -22 Apr -21 Jan -21 Jul -20 Apr -20 Oct -21 Oct -20 Fudo monthly activerestaurants Indexed to April 2020 (=100) Fudo average gross merchandise value per restaurant* Indexed to M0 (=100) 121 131 140 145 153 160 165 167 172 174 M5 M7 M4 M9 M8 M3 100 M2 M6 M10 M0 M1 Fudo, a vertical software platform, is a one-stop-shop for restaurants looking to increase both sales and efficiency Business Model: A single SaaS solution for the food industry across LatAm that allows clients to manage their business by using multiple functionalities including: Sales Expenses Products Suppliers Clients Reports & KPIs Delivery Note: (*) M0 corresponds to the first full month after onboarding Source: Fudo internal data
  • 90.
    90 3.3 Web3 & Crypto -Satoshi Nakamoto “If you don’t believe it or don’t get it, I don’t have the time to try to convince you, sorry.” ”
  • 91.
    91 Cryptocurrencies, DeFi protocols, and Non-Fungible Tokens(NFTs) are new technical solutions with use cases that could be applied to acute challenges in Latin America Store of value Fighting inflation and currency devaluation (and controls) by holding crypto Ownership Helping creators monetize and allowing consumers to own a piece of creations and experiences through NFTs Medium of Exchange Allowing people to receive cross-border payments and remittances faster and with fewer fees
  • 92.
    92 Hyperinflation has historicallyplagued countries such as Argentina, Brazil, and Peru. Argentina is back to grappling with its ghost1 Remittances received in Mexico have achieved an all-time high volume with no signs of slowing down, yet are still expensive3 Currency devaluation (and controls) is also another visible historical challenge in the region Venezuela has faced this recently as a consequence of political instability2 Inflation in Argentina (%) Venezuelan Bolivar devaluation (%) – indexed to value in 2019 Remittances received in Mexico US$ MM 30 35 40 45 50 55 60 65 Q1 2022 Q2 2020 Q3 2020 Q2 2021 Q1 2020 Q2 2022 Q3 2021 Q4 2021 Q4 2019 Q3 2019 Q2 2019 Q1 2019 Q4 2020 Q1 2021 0 10 20 30 40 50 60 70 80 90 100 110 Jan-21 Jul-20 Jan-22 Jan-20 Jul-22 Jan-19 Jul-19 Jul-21 -99.94% 20,000 25,000 30,000 35,000 40,000 45,000 50,000 55,000 2017 2018 2019 2020 2021 Latin America’s history of economic and political uncertainty creates fertile ground for web3 to thrive “Inflation: Argentina’s interminable nightmare” August 6, 2022 “Venezuela subtracts six zeros from currency, second overhaul in three years” October 1, 2021 “Remittances to Mexico again break record on back of strong U.S. labor market” September 1, 2022 Source: (1) Trading Economics; inflation Argentina; (2) Trading economics, indexed at Jan 2019 value, vs. US dollar – numbers don’t account for 6 digits government adjustment in 2021, to better compare trend; (3) Knomad/WorldBank “Inward Remittance Flows May 2022” (2022)
  • 93.
    93 The crypto marketin LatAm is significant when compared to the stock market, but still with a lot of room to grow 96% 4% No Yes Percentage of people who own cryptocurrencies, Brazil1 % of survey respondents Brazilians who invest in the Brazilian stock market, June 20222 % of population with open Brazilian brokerage accounts 98% Open Brokerage Accounts 2% Source: (1) Atlantico and Atlas Intel Brazil survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=2,262, 2% confidence interval) Question: Do you own cryptocurrency?; (2) B3 “Pessoas Fisicas Uma análise da evolução dos investidores na B3” (June 2022)
  • 94.
    94 BRAZIL The Brazilian CentralBank announced that a pilot of the Digital Real will go live in the second half of 2022 MEXICO Banxico announced it will launch its digital currency in 2024 CHILE Central Bank of Chile is currently conducting research and will decide by the end of 2022 COLOMBIA BanRep is currently considering the integration of a digital currency and conducting research ARGENTINA Has deprioritized the issuance of a digital currency but continues to study the subject EL SALVADOR Although not a CBDC, Bitcoin became legal tender* in the country in 2021 CBDCs are “Central Bank Digital Currencies” digital currencies issued, centrally managed, and fully regulated by Central Banks through digital wallets in a fully virtual sphere There is no universal case for CBDCs because each economy is different. In some cases, a CBDC may be an important path to financial inclusion (...) in others, a CBDC could provide an essential backup in the event that other payment instruments fail. - IMF Press Center Governments in LatAm are also embracing crypto, starting with CBDCs, to fight some of their challenges Note: (*) Legal tender means that currency is recognized by law as a means to settle a public or private debt or meet a financial obligation, including tax payments, contracts, and legal fines or damages (Investopedia) Source: Atlantic Council, accessed on 07/04/2022
  • 95.
    95 CloudWalk total paymentvolume Indexed to January 2019 (=100) In November 2021, CloudWalk issued the BRLC, the Brazilian Digital Real – a stablecoin pegged to the Brazilian Real. Their InfinitePay solution offers BRLC as cashback for every transaction 100 752 24,867 145,735 Jul-19 Jan-21 Jan-22 Jan-19 Jan-20 Jul-21 Jul-20 Jul-22 72,603 125,508 40,273 8,323 CloudWalk is disrupting payments through blockchain, offering clients a faster, more secure, and cheaper service 142k+ Token Holders 2.4MM Transfers CloudWalk is a Brazilian fintech that enables SMBs to avoid high transaction costs through InfinitePay, a blockchain-based financial platform with its own stablecoin Source: CloudWalk internal data
  • 96.
    96 3.0 2.4 1.9 1.3 5.5 Q3 Q2 Q1 Q4 1.1 5.2 Q3 Q1 3.7 Q2 Q4 4.5 Q3 0.2 1.1 1.1 2.1 2022* 3.2 2020 2019 2021 Fast-growingcrypto unicorn Bitso is increasingly serving remittance needs by offering a cheaper and faster alternative Number of users among all products1 Millions Total payment volume for international transfers1 US$ B Bitso is a Mexican cryptocurrency platform whose mission is to make crypto useful. They allow users to transfer, send and receive cryptocurrencies safely and easily, regardless of where they are in the world 2020 2021 2022 Between January and May 2022, remittances in Mexico reached an accumulated total of US$ 22.4B2, of which Bitso processed 4.5% Note: (*) Bitso processed US$2.1B in remittance volume up to September 10th, 2022. If we assume growth rate for June and July 2022 moving forward, Bitso is forecasted to process an accumulated total of US$ 3.2B by the end of the year Source: (1) Bitso internal data; (2) Banco de México Ingresos y Egresos por Remesas (May 2022)
  • 97.
    97 20% Mexico 41% 29% Colombia Brazil Population whoPurchased a Product Because a Creator Promoted it and Monetization amount, Brazil* % total respondents, % of total surveyed creators LatAm NFT marketplaces 23 25 19 18 14 No Income $1-$100 $100-$200 $200-$500 More than $500 Sticky allows creators to sell to collectors in a marketplace and earn up to 50% of net initial sales Tropix is a marketplace connecting artists and collectors Xave market is a music, art, and sports NFT marketplace Minteo is an NFT marketplace with artists and creators from Latin America Despite their influence, content creators in LatAm struggle to monetize, with blockchain companies offering a solution Note: (*) Original study conducted in R$ where US$1 = R$5.20, monthly amount Source: Statista Global Consumer Survey 2021, Question: “I have bought products because celebrities or influencers advertised them”; Atlantico Digital Influencer Survey (August 2021), Conducted with 5,182 Influencers
  • 98.
    98 $10.7 $7.3 Q1 2022 Q4 2021 $6.7$6.8 $0.4 Q3 2021 Q2 2022 Q2 2021 OpenSea monthly volume, Global1 US$ B Fingerprints number of members2 105 219 229 238 245 248 252 May-22 May-21 Jan-22 Jul-22 Jul-21 Sep-21 Nov-21 Mar-22 116 8 195 FingerprintsDAO is a global Decentralized Autonomous Organization (DAO) focused on championing blockchain art by collecting NFT artwork. The DAO is one of the largest holders of Autoglyphs*, the first fully on-chain, long form “generative art” OpenSea is the world’s largest NFT marketplace Note: (*) Autoglyphs are a completely self-contained mechanism for the creation and ownership of an artwork, being an experiment in generative art, each one unique and created by code running on the Ethereum blockchain. Source: (1) Dune “OpenSea” (2022); (2) Dune “FP Members” (2022) In the broader NFT space, Latin Americans are also at the forefront of global thriving projects such as FingerprintsDAO Founding group consists of 10 Brazilians and 1 American
  • 99.
    99 Rising interest inweb3 is evidenced by the existence of over 100 startups in LatAm across several verticals Mango Labs* is a Latin American hub focused on all things web3 in the region Source: Mango Labs, *https://www.mangolabs.xyz
  • 100.
    100 Rio de Janeirohas embraced web3 and fostered a budding hub to rival regional leaders like Buenos Aires In an application of a prominent use case (membership) for NFTs, Hashtown members get access to The Club through NFTs based on AI-generated art works in the style of notable Brazilian artists Rio has hosted multiple relevant web3 conferences and gatherings along 2022 like Ethereum Rio and NFT.Rio Rio tech and web3 scene has been flourishing, catalyzed by community gatherings and government initiatives Hashtown is a members-only club in Rio fostering a community centered on innovation and culture Rio’s city government has been engaged in web3 with the mayor frequently present at events, and projects to evaluate accepting bitcoin for taxes and for reserves
  • 101.
  • 102.
    102 + + + + 1.1 SocioeconomicFoundations Appendix Slides
  • 103.
    103 0 10 5 12 8 16 4 15 20 Chile LatinAmerica & the Caribbean GDP per capita (in US$ k) GDP (in US$ T) Mexico Brazil Colombia India Argentina China 30 45 15 60 25 24 US and Canada 5 2 Sub-Saharan Africa 2021 2016 Latin America 5 2010 Middle East and Central Asia Euro Area Population Size Latin America & the Caribbean Emerging Economies Global economic activity, 2010-20211 GDP in current prices US$ T Comparison of global economy sizes, 20211,2 GDP, GDP per capita and population size Latin America’s GDP totals US$ 5T and represents 9% of the global economy Source: (1) International Monetary Fund; (2) World Bank
  • 104.
    104 301 200 157 124 74 238 166 142 106 100 85 2010 2011 20122013 2014 2015 2016 2017 2018 2019 2020 2021 2022 India Argentina Mexico 120 China Brazil 120 US Most of the largest economies in Latin America are expected to recover their GDP to pre- pandemic (2019) levels by the end of the year LatAm GDP growth has historically been slower and more volatile compared to that of other emerging economies Note: (*) This variability can be explained, in part, due to changes in foreign exchange rates. For example, although Brazil’s 2021 nominal GDP in current US$ was 73% of its 2020 value, it has gone from R$ 7.2T to R$ 7.4T while the US$-R$ exchange rate has roughly increased from 1.7 to 5.1 over the same time period Source: World Bank GDP by country (nominal, current US$)* Indexed by country to 2010 (=100)
  • 105.
    105 48% 63% 15-24 years 25years and over Labor informality rate in Latin America by age group, 20162 % of total employment The youth informality cycle is self-perpetuating1 Youth can only find informal employment Informal work’s high turnover leads to intermittent employment Informal work lacks learning opportunities Youth lacks stable, substantial work experience 7% 25 years and over 15-24 years 20% Unemployment rate in Latin America by age group, 20211 % High labor informality disproportionally impacts younger people, derailing their career progression over time Source: (1) International Labour Organization “2021 Labour Overview Latin America and the Caribbean” (2021); (2) International Labour Organization “Women and Men in the Informal Economy: a Statistical Picture” (2018)
  • 106.
    106 Difference in lifeexpectancy at birth to the European Union average by location1,2,3 Years 2.1 2.1 1.7 -3.3 -3.3 -3.0 2.0 -5.5 -7.2 -0.8 -5.2 US -2.2 -3.6 -1.1 -5.2 -2.8 -0.1 -0.8 Santiago France Buenos Aires Brasília -4.1 Mexico City Rio de Janeiro -4.2 -8.4 Bogotá Spain -3.6 -4.6 Lima Salvador -4.4 São Paulo Women Men As highlighted by a study published last year in Nature, the “chicken or the egg” dilemma for higher life expectancy and better social environment indicators (e.g., better education and greater access to sanitation) has yet to be answered, but both are strongly associated with each other Life expectancies in the region’s main cities are considerably below the average in Europe Source: (1) Nature Medicine “Life expectancy and mortality in 363 cities of Latin America” (2021); (2) Eurostat “Mortality and life expectancy statistics” (2021); (3) Centers for Disease Control and Prevention “Mortality in the United States, 2020” (2021)
  • 107.
    107 In May 2020,Latin America was declared by the World Health Organization as the epicenter of the COVID-19 pandemic Latin America experienced high mortality rates throughout the pandemic, reaching over 1.6M deaths by June 2022 United States Latin America Brazil: 3.2k United States: 3.1k Argentina: 2.9k Colombia: 2.7k Mexico: 2.6k Jan-21 Jan-22 Jul-20 Jan-20 Jul-21 Jul-22 Jul-20 Jul-22 Jan-21 Jan-20 Jan-22 Jul-21 43% 26% 31% 53% Germany: 1.7k Deaths per million by COVID-19 by country Total deaths per million over time Proportion of deaths by COVID-19 by region % of total worldwide deaths Source: Our World in Data “Coronavirus (COVID-19) Deaths”
  • 108.
    108 Chile: 90.2% Mexico: 63.1% UnitedStates: 67.0% Colombia: 70.2% Brazil: 78.8% Argentina: 83.0% Oct-21 Jul-21 Jan-22 Jan-21 Jul-22 Oct-20 Apr-22 Apr-21 Most Latin American countries began the vaccination process significantly later than the US Apr-22 Jul-22 Jan-21 Oct-21 Jul-21 Apr-21 Jan-22 Brazil Colombia Chile Argentina Mexico By October 2021, all 5 countries had reached around 50% of fully vaccinated people (with Chile having already surpassed 70%) Argentina: 0.2K Brazil: 4.7K Colombia: 0.6K Chile: 0.2K Mexico: 0.8K June 2022 Data Despite a late start, rapid vaccination adoption in Latin America quickly showed positive results in the region Vaccinated people against COVID-19 per country1 % of people fully vaccinated Deaths by COVID-19 per country2 New deaths per month Source: (1) Our World in Data “Coronavirus (COVID-19) Vaccinations” (2022); (2) Our World in Data “Coronavirus (COVID-19) Deaths” (2022)
  • 109.
    109 Latin America Europe North America EastAsia May-20 Jul-20 Sep-20 Nov-20 Jan-21 May-21 Jul-21 Mar-21 19% 26% 20% 24% 12% 23% 12% 18% 36% Oct-20 Feb-21 Oxford Stringency Index2* Brazil 77 67 70 61 United Kingdom 80 68 88 51 United States 73 63 72 59 Japan 47 35 50 53 The pandemic greatly affected businesses in the region, leading to the closure of over 35% of SMBs in May 2020 Closure rates of SMBs across region1 % of SMBs facing closure Note: (*) The index records the strictness of ‘lockdown style’ policies that primarily restrict people’s behavior. It is calculated using all ordinal containment and closure policy indicators, plus an indicator recording public information campaigns. Source: (1) Facebook “Global State of Small Business Report” (September 2021); (2) Financial Times “Lockdowns compared: tracking governments’ coronavirus responses” (2022)
  • 110.
    110 Sub-Saharan Africa Latin America & Caribbean Global SouthAsia Middle East & North Africa Europe and Central Asia 87 86 89 63 63 70 58 53 51 52 79 13 10 14 2022 2019 2015 12.4 11.7 8.2 6.6 6.4 6.2 4.3 3.6 Middle East and North Africa North America Sub-Saharan Africa Global Latin America and Caribbean Europe and Central Asia South Asia East Asia and Pacific COVID-19 was highly detrimental for education in the region, with learning poverty* increasing by over 25 p.p. Learning poverty globally and by region1* 2015 and 2019 actual values and 2022 Simulation Estimates Learning delay by region given COVID-19 pandemic2 Average months of learning Children in Latin America and the Caribbean experienced some of the longest uninterrupted COVID-19 school closures in the world. There was an average estimated loss of 1.5 years of learning.3 Note: (*) The learning poverty rate measures the proportion of children who are unable to read a simple text with comprehension by age 10 Source: (1) World Bank, UNICEF, FCDO, USAID, the Bill & Melinda Gates Foundation “The State of Global Learning Poverty: 2022 Update” (2022); (2) McKinsey “How COVID-19 caused a global learning crisis” (2022); (3) World Bank, Unicef and Unesco “Two Years After: Saving a Generation” (2022)
  • 111.
    111 278 363 Engaged Not engaged +31% The pandemicled to increased mental stress and the rise of platforms that help companies support their employees Average employee tenure by engagement on Zenklub3 Number of days Zenklub is a Brazilian company that offers companies lifelong learning modules, behavioral analytics platform and digital therapy with proven business outcomes such as improvement in employee retention and decrease in absenteeism 17.3% to < 19.2% 22.1% to < 25.4% 25.4% to < 29.2% 29.2% to < 35.0% 35.0% to < 38.7% > 38.7% Prevalence of depressive & anxiety disorders1 Percentage change in prevalence following COVID-19 pandemic In 2021, the average corporate well-being index2 assessed by Zenklub fell to 49.3, well below the ideal threshold, defined at 78 In 2022, the average corporate well-being index of companies evaluated was 61.7; for companies with mental health support initiatives, that number was 21% higher2 Source: (1) Pan American Life “Mental Health in Latin America and the Caribbean, The Silent Pandemic” (2022); (2) Zenklub and UFRJ “Índice de Bem-Estar Corporativo no Brasil” (2022); (3) Zenklub internal study, conducted with tech companies across a 24-month period (n = 3,510)
  • 112.
    112 Population priorities inlife changes due to the COVID-19 pandemic % of population that reported the COVID-19 pandemic affected the form in which they understand their priorities in life 81% 78% 74% 72% 68% 60% US Argentina Chile Brazil Mexico Colombia The COVID-19 pandemic changed people’s priorities across many countries in the region + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
  • 113.
    113 Social and politicalpolarization in Latin America is strong, but less so than what is observed in the United States Perception of conflict between opposing parties’ supporters** % of population Perception of social conflict between economic classes* % of population 36% 31% 29% 36% 31% 29% 34% 20% 33% 33% 17% 31% 25% 38% 32% 19% 34% 34% 5% 11% 6% 13% 18% 6% 100 100 100 Brazil No conflict 100 100 USA Colombia Yes, some Yes, very strong 100 Yes, strong Argentina Mexico Chile 66% 47% 42% 52% 31% 63% 14% 21% 29% 20% 34% 23% 19% 26% 26% 16% 30% 13% 7% 12% 6% 100 100 100 Yes, some Yes, strong USA Mexico Yes, very strong 100 100 Colombia No conflict Chile 100 1% 0% Argentina 3% Brazil + Note: (*) Responses to ‘Would you say there are social conflicts in your country between people in different economic classes?’; (**) Responses to ‘Would you say there are social conflicts in your country between people who support different political parties?’ Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
  • 114.
    114 Inflation Crime &violence Poverty & social inequality Population concern with issue by country % of population 61% 29% 26% 60% 46% 61% 29% Brazil 26% 65% 33% 46% Chile 54% 35% Argentina 60% Mexico Chile Argentina World World Mexico Brazil 38% World Mexico Argentina Brazil Chile Inflation, crime & violence, and poverty & social inequality are of concern in many of the largest economies in LatAm Source: Ipsos ”What Worries the World? July” (2022)
  • 115.
    115 Population feeling towardsrising prices % of population that felt affected by rising prices over the last year 85% 59% 70% 96% 79% 64% 15% 35% 27% 18% 30% 6% 6% Mexico Brazil Colombia 2% 2% Not at all US 3% 3% Chile Very much Argentina Somewhat 0% Populations across Latin America report feeling very affected by recent rising prices + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
  • 116.
    116 Brazilian population feelingtowards rising prices % of population that felt affected by rising prices over the last year per income level 75% 47% 57% 47% 43% 20% 48% 34% 49% 44% 5% 5% 9% 13% Somewhat Not at all Above R$10k 4% R$3-5k R$2-3k Up to R$2k Very much R$5-10k In Brazil, inflation affected people from all income levels, with the lowest income segment being the most affected + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
  • 117.
    117 Population perceived greatestrisk to our planet % of population that think of each as the greatest risk to our planet 15% 9% 9% 5% 8% 14% 10% 16% 9% 26% 7% 10% 22% 22% 18% 17% 11% 18% 18% 11% 15% 44% 65% 50% 39% 38% 30% 24% 1% Other I don’t know 3% 4% New pandemics/ diseases Wars and terrorism US 3% Climate change Brazil 3% Argentina The collapse of democracy Mexico 1% 3% Chile Colombia 2% Climate change is thought of as the greatest risk to our planet in the largest Latin American countries + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
  • 118.
    118 Population belief inhuman-caused climate change % of population that believe we are currently seeing climate change and global warming caused by humans 6% 15% 22% 29% 12% 36% 8% 4% 7% 13% 8% 94% 77% 74% 64% 75% 56% No I don’t know US Brazil Argentina Chile Colombia Yes Mexico Most Latin America citizens believe that climate change and global warming are caused by humans + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
  • 119.
    119 9% 10% 5% 31% 92% 50% Other Religions Roman Catholic 2010 Unaffiliated 2000 Evangelicals 1991 2020 1980 1970 21 105 1994 2020 5X Religiousdenomination landscape in Brazil1 Number of Evangelicals in the Brazilian House of Representatives2 The Evangelical Church has gained ground as a driving force in Brazilian society Note: With “Evangelicals” we are referring to ”evangélicos”, who are part of a Protestant Christian movement started in the 17th century Source: (1) Datafolha, Brazilian Census; (2) UOL “Congresso em Foco” (2020)
  • 120.
  • 121.
    121 20% 19% 6% 74% 75% 80% 66% 8% 6%11% 25% Other 1% 5G 3G Western Europe 3% 4% 0% 2% Latin America 4G North America North East Asia 6% 12% 19% 26% 35% 66% 73% 73% 69% 63% 58% 50% 8% 8% 7% 6% 6% 5% 25% 18% 14% 13% 13% 11% 11% 4G 5G 3G 2022(e) 2027(e) 2024(e) 4% 2026(e) 2023(e) Other 2021 1% 2025(e) 2% 5G has increasing relevance today to allow for digital transformation. Up to 10 times faster than 4G, 5G provides greater network security to enable the adoption of novel applications, e.g., the internet of things (IoT), AR, and VR. It also has significant social value by enhancing health systems and infrastructure. 5G in Latin America is projected to make up 35% of mobile subscriptions, unlocking greater digital transformation Subscriptions by network type by region, 2021* % of total subscriptions Subscriptions by network type, Latin America % of total subscriptions Note: (*) Subscriptions refers to lines Source: Ericsson
  • 122.
    122 46 57 2 94 2022* 2018 2016 2020* 2014 2012 Pay TV Streaming (OTT**) 8% 10% 19% 50% 21% Digitaladoption is especially pronounced in the shift from pay TV to streaming services like Netflix and Disney+ Number of Subscribers by Viewing Format1 MM of people Most Popular Streaming Platforms in Brazil2 % market share, 2022 Note: (*) Projected figures by Ampere Analysis; (**) OTT (Over the Top) refers to any type of video or streaming media offered directly to viewers via the internet Source: (1) LABS; (2) Netscribes
  • 123.
    123 97.4 Media Products E-commerce 30.5 ConsumerAppliances E-commerce Apparel and Footwear Other E-commerce* Consumer Electronics 2021 2020 38.4 2016 2017 48.6 71.6 Food and Drink 41.0 2018 2019 +17% +42% Growth in “other” category led by sectors like home care and pet care, showing diversification from traditional categories E-commerce has seen higher growth rates in certain sub- sectors, while growth in traditional sectors stagnated Annual E-commerce sales in Latin America by category1 US$ B Note: (*) Categories within “other” include beauty and personal care, consumer health, home care, home improvement and gardening, homewares and home furnishings, personal accessories and eyewear, pet care, traditional toys and games, and video game hardware Source: Euromonitor
  • 124.
    124 73% 84% Chile Peru Brazil Colombia Mexico 60% 72% 81% Coursera learnersin Latin America1 Millions 17.9 14.5 2022 2021 Percentage of doctors offering telehealth by country, 20212 % The digital transformation in Latin America is rapidly gaining traction across traditional sectors Source: (1) Coursera ”Global Skills Report” (2021 and 2022); (2) McKinsey & Company “How Latin American physicians view the future of healthcare” (2021)
  • 125.
    125 AI Consultations 54% 23% 20% 3% Health Mall(Marketplace) Health Management Consumer Healthcare Online Medical Services 423 MM Users since 2015 21K Partnered hospitals & pharmacies $10B Revenue in 20212 E-Prescriptions Women’s Health Telehealth / Mental Health Revenue distribution of Ping An Good Doctor, China’s largest online healthcare platform, 20201 % Brazilian healthcare startups by category Ping An Good Doctor While one-stop solution healthcare platforms emerged in China, platforms are category-specific in places like Brazil Source: (1) Huajin Securities (2) Ping An Good Doctor Annual Report
  • 126.
    126 + + + + 1.3 RemoteWork Appendix Slides
  • 127.
    127 Not for everyone:The move towards remote work was correlated to wage levels and variated across countries Remote work adoption in Brazil based on wage percentile, 20211 Share of workers who worked from home by wage percentile 10% 15% 30% 0% 40% 35% 20% 45% 5% 25% 60th 100th 70th 0th 50th 10th 20th 30th 40th 80th 90th 14.7% 17.9% 14.7% 67.4% 5% 40.0% 8.7% 73.6% Mexico 13.9% 17.7% USA Chile 22.6% 62.7% 81.1% 30.5% Brazil 29.5% Argentina Yes, some of the time Yes, all of the time Never Remote work adoption in Latin America by country, 20222 Share of workers by frequency of remote work + Source: (1) Scielo “Who worked from home in Brazil? Inequalities highlighted by the pandemic” (2021); (2) Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
  • 128.
    128 Developed markets Emergingmarkets 46% 39% 39% 26% 22% 16% 54% 61% 61% 74% 78% 84% China UK Mexico India US Japan Remote-enabled work No potential of remote work Country’s remote work potential1 Potential share of time that workers could spend working remotely* Remote workers inflexible about work from home2 Share of workers that would look for a new job if demanded to work on-site** Mexico 33% China 36% Great Britain India 31% Japan 21% 36% Brazil 27% US 48% Developed markets Emerging markets Emerging markets have lower potential for remote work penetration, yet remote workers tend to be less flexible Note: (*) Graph doesn’t show actual share of time, but a theoretical maximum calculated based on the countries’ sector, occupation, and activity mix. It considers all activities not requiring on-site presence. (**) Share of online employees that ‘strongly agree’ or ‘agree’ with the statement ‘If my employer expected me to work away from home full time, I would consider looking for another job given the same salary and responsibility’. Source: (1) McKinsey “What’s next for remote work: An analysis of 2,000 tasks, 800 jobs, and 9 countries” (2020); (2) Ipsos ”Return To The Workplace Global Survey” (2021)
  • 129.
    129 Companies show agreater adoption rate of remote work the smaller they are Adoption of remote work by company size % of respondents 47% 34% 19% 26% 31% 31% 14% 16% 23% 13% 19% 27% >500 employees 101-500 employees 1-100 employees 100% remote 51%-99% remote 25-50% remote <25% remote + Source: Runa and Atlantico survey “The Future of Work in Latin America 2022” (n = HR leaders in 500 companies in Latin America)
  • 130.
    130 Most companies allowfor some form of remote work in all areas Allowance of remote work by company area % of respondents + Note: Respondents could select “All areas”, “None”, or one to multiple areas within their companies Source: Runa and Atlantico survey “The Future of Work in Latin America 2022” (n = HR leaders in 500 companies in Latin America) 69% 79% 88% Product and tech 80% Administrative Operations Marketing and sales
  • 131.
    131 + + + + 2.1 Stateof Venture Capital and Tech Appendix Slides
  • 132.
    132 Recent Trends** Non-profitable technologycompanies rapidly appreciated in value in 2021, driven by high future cash flow expectations Goldman Sachs Non-Profitable Technology Index* Indexed basket of US-listed profitless tech companies 0 50 100 150 200 250 300 350 400 450 H1 2021 H2 2020 H1 2019 H1 2020 H2 2021 H2 2019 5.3x Starting in 2020, tech companies' valuations boomed, with the index peaking during the beginning of 2021 at ~5.3x its value at the start of the pandemic, though still facing some volatility Beginning of the COVID- 19 pandemic Note: (*) Created in 2021, the GS Non-Profitable Tech basket consists of non-profitable US listed companies in innovative industries, as defined by Goldman Sachs to be broad and include new economy companies across industry groups; it is optimized for liquidity. The index is an absolute measure of the value of this basket. Data until Dec 31st 2021. Source: Bloomberg
  • 133.
    133 190 202 82 40% 60% 131 Q1 2022 43% 57% 65% Q1 2021 56% Q4 2020 32% 24% Q2 2021 Q2 2020 196 Q3 2020 Q4 2021 Q3 2021 155 235 37% 267 68% 17% 61% 76% 44% 272 75% Q1 2020 Q2 2022 25% 100 35% 39% 63% 83% $236 $327 $534 $100 Brazil Ecuador Colombia Chile $1,183 Mexico Argentina, Chile, Colombia,Mexico Brazil Deal volume has dropped across Latin America, with Brazil still accounting for most of the largest deals in the region Volume of Investment across Latin America # of deals Top 10 Equity Deals in Latin America Q1 and Q2 2022* Sum of round amounts in US$ M Note: (*) Combined top 10 from Q1 (excluded Caribbean) and top 10 from Q2; no Ecuadorian company made it to the Top 10 in 2021; top 10 accounted for Latin America and Caribbean (excludes FTX). Source: CB Insights “State of Venture Report Q2” (2022) 2020 2021 2022
  • 134.
    134 5.0 1.7 3.9 1.4 0.6 0.5 Q4 Q2 5.3 2.0 Q4 Q2 Q1 0.8 Q3 0.9 1.7 Q1 Q2Q1 Q3 Q4 Q3 2.8 1.3 Q1 Q2 2.4 +21% 2019 2020 2021 2022 Despite 2022 drop in funding from 2021’s peak levels, current funding levels are still higher than historic levels Latin America Venture Funding Investment amount in US$ B Source: LAVCA Industry Data and Analysis, Q2 2022
  • 135.
    135 Feelings about theupcoming year in the tech market % of survey respondents by industry 64% 26% 28% 6% 9% 40% 38% 33% 30% 10% 18% 50% 67% 3% 6% 59% 35% 33% 2% 11% 50% 0 30 20 45 50 40 10 25 15 5 35 Excited 45% Scared 27% Cautious or optimistic Optimistic Cautious Concerned about job security Other Software E-commerce or consumer goods Financial services Looking ahead to 2023, tech workers in Latin America across sectors feel more “cautiously optimistic” than scared + Atlantico and Vertico conducted primary research with 200+ tech workers in Latin America of varying seniority Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
  • 136.
    136 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% Between 18-24 months Between 12-18 months Between 6-12 months Less than 6 months Expectedfundraising plans Months to start fundraising, % companies Impact of market condition on fundraising plans % companies 0% 5% 10% 15% 20% 25% 30% 35% 40% Renegotiated current terms Attempt to raise a round sooner than previously expected Plan to breakeven Plans have not changed Postpone original date to fundraise Source: Canary Cash Burn Study (n = 27 early-stage companies, Seed to Series Bs; Conducted on July 1st, 2022) Companies have postponed fundraising plans for now, although most plan to resume within the next 12 months
  • 137.
    137 Average C-Levels and Executivesthink their companies should prioritize DEI and ESG more than they currently do 0 5 10 15 20 25 30 35 40 45 16.13% 35.48% 19.35% 3 4 30.11% 41.94% 2.15% 13.98% 4.30% 1.08% 5 35.48% 2 1 What level of priority does/should DEI have in your company? % of C-Levels and Executives survey respondents Desire (should) Reality (does) 54.8% of surveyed C-Levels and Executives think DEI should be of higher priority at their companies than they currently are 17% Series 2 Series 1 Average 4.15 31% Series 1 3.45 0 5 10 15 20 25 30 35 40 45 35.48% 27.96% 25.81% 31.18% 13.98% 18.28% 25.81% 5 4 3.23% 2 2.15% 1 16.13% 3 What level of priority does/should ESG have in your company? % of C-Levels and Executives survey respondents Desire (should) Reality (does) 22% Series 2 Series 1 3.9 40% Series 1 3.01 + Source: Atlantico and Vertico Survey 2022, collected during July (n = 93 C-Levels and Executives)
  • 138.
    138 34% Series 1 27% Series 2 Series1 Employees think large companies do and should prioritize diversity, equity and inclusion more than smaller ones 0 5 10 15 20 25 30 35 40 45 50 55 35.85% 32.56% 37.21% 1.89% 10.06% 4.65% 5 29.56% 4 22.64% 2 11.63% 13.95% 3 1 What level of priority does DEI have in your company? % of total survey respondents Large (> 100 employees) Small (<= 100 employees) 0 5 10 15 20 25 30 35 40 45 50 55 52.83% 44.19% 28.93% 34.88% 15.72% 3 16.28% 0.63% 2.33% 5 2 1 4 1.89% 2.33% What level of priority should DEI have in your company? % of total survey respondents Large (> 100 employees) Small (<= 100 employees) 3.33 + 3.67 Average Average 14% Series 2 Series 1 4.31 17% Series 1 4.16 Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
  • 139.
    139 Employees also believelarge companies do and should prioritize ESG* more than smaller ones 0 5 10 15 20 25 30 35 40 45 13.95% 25.79% 13.95% 5 10.06% 20.93% 25.58% 15.09% 16.98% 4 3 25.58% 32.08% 2 1 What level of priority does ESG have in your company? % of total survey respondents Large (> 100 employees) Small (<= 100 employees) 0 5 10 15 20 25 30 35 40 45 35.22% 34.88% 16.35% 32.56% 4.65% 2.33% 5 40.88% 25.58% 4 3 5.66% 2 1.89% 1 What level of priority should ESG have in your company? % of total survey respondents Large (> 100 employees) Small (<= 100 employees) + 40% Series 1 36% Series 1 2.98 3.19 Average Average 19% Series 2 Series 1 4.07 25% Series 1 3.74 Note: (*) ESG stands for environmental, social, and corporate governance Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
  • 140.
    140 0 5 10 15 20 25 30 35 40 45 20% 46% 40% Negative 26% Positive 40% 28% Mixed or nochange Considering the last 6 months in the tech market, how are you feeling about the upcoming year?* % of total survey respondents + 40 years or older Less than 40 years old 0 5 10 15 20 25 30 35 40 45 30% Negative Mixed or no change 32% 33% 37% Positive 21% 47% Large (more than 100 employees) Small (100 employees or less) Considering the last 6 months in the tech market, how are you feeling about the upcoming year?* % of total survey respondents The last 6 months in the tech market have affected workers’ sentiment in a variety of ways Note: (*) Positive feelings are “optimistic” and “excited” while negative feelings are “cautious”, “scared”, “concerned about job security” and “looking to move outside of tech” Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
  • 141.
    141 0 5 10 15 20 25 30 35 40 45 50 48% 22% 34% Early stage 28% Enterprise 24% 12% Growth stage Unicorn 14% 18% Whichstage / type of company is most interesting for you to work for? % of total survey respondents + 0 5 10 15 20 25 30 35 40 45 50 14% 21% 25% 37% 23% Unicorn 13% Growth stage Early stage 41% Enterprise 26% Which stage / type of company is most interesting for you to work for? % of total survey respondents 40 years or older Less than 40 years old Female Male Growth stage is the preferred type of company to work for while early stage is the least preferrable Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
  • 142.
    142 Students’ interest inworking in tech has persisted despite the market’s downturn Students’ most desired areas to work in the short term % of survey respondents 12% 11% 14% 15% 13% 16% 16% 21% 45% 37% Big Tech Startup Consulting 2020 Finance Other 2022 Source: (1) Atlantico Study, June 2020 (n = 1682); (2) Atlantico Study, June 2022 (n = 279)
  • 143.
    143 Students’ interest inentrepreneurship has also proven to be resilient in the face of the downturn Students’ entrepreneurial ambitions % of survey respondents Source: (1) Atlantico Study, June 2020 (n = 1682); (2) Atlantico Study, June 2022 (n = 279) 39% 41% 61% 59% Interested 2022 Uninterested/ Unsure 2020
  • 144.
    144 0 5 10 15 20 25 30 35 40 45 50 21.29% 36.63% 47.13% 39.60% 21.29% 41.04% 28.49% 12.54% 54.46% Flexibility to choose worklocation (remote, in-person, hybrid) 42.57% Work life balance 27.24% Alignment between personal purpose and company’s mission 23.30% Learning opportunities Compensation Culture Top 3 reasons for considering or wanting to work for a company1,2 % of total survey respondents Students Tech workers Tech workers prioritize culture while students prioritize learning opportunities when considering where to work Source: (1) Atlantico and Vertico Survey July 2022 (n = 202); (2) Atlantico Study June 2022 (n = 279)
  • 145.
    145 GDP growth rate*has started to decline but remains positive, % Interest rates have started to increase but remain lower than pre-pandemic levels,% Inflation** is higher than pre-pandemic levels, % Unemployment is below pre-pandemic levels and continues to decline, % 30 35 40 45 50 55 60 65 Jan-21 Jul-21 Jan-22 Jul-20 Jan-20 Jul-22 Jan-19 Jul-19 36% 64% 6 7 8 9 10 11 12 13 14 Jul-21 Jan-21 Jan-22 Jul-20 Jul-19 Jul-22 Jan-19 Jan-20 7% 10% 30 40 50 60 70 80 90 Jan-22 Jan-21 Jan-20 Jul-21 Jul-19 Jul-20 Jan-19 Jul-22 86% 52% -15 -10 -5 0 5 10 15 Jan-21 Jul-21 Jul-19 Jan-22 Jan-20 Jul-20 Jul-22 1% Argentina: Macroeconomic Snapshot Note: (*) growth rate is GDP in comparison to previous quarter; (**) inflation is measured using the most important categories in the CPI basket in the Great Buenos Aires area and the CPI index has a base of 100 as of December 2016 Source: Trading Economics
  • 146.
    146 0 20 40 60 80 100 120 140 160 180 200 220 240 260 280 Jan-20 Jan-21 Jan-22Jan-23 Jan-19 Imports and Exports1 US$ B Estimated spend on energy imports2 US$ B Official1 and Unofficial3 Argentinian Peso Exchange rate US$ B $12.5 Adjusted estimate $5.8 Estimated spend on energy imports prior to the Russian invasion of Ukraine 4.0 Jan-19 8.0 8.5 3.5 3.0 2.5 4.5 5.5 Jan-23 6.0 Jan-22 Jan-21 Jan-20 7.0 5.0 6.5 9.0 7.5 Exports Imports Unofficial market rate ("Blue rate") Official rate Argentina: Global commodity price changes have benefited Argentina’s exports, but energy imports are costly Source: (1) Trading Economics ; (2) Agora Public Affairs, “Winter 2022 the Energy Situation in Argentina”, 04/2022 ; (3) Blue Dollar
  • 147.
    147 GDP growth rate*has been slowly rising above pre-pandemic levels % Interest rates continue to climb % Inflation** has reached its highest value in 18 years, ~12% % Unemployment is below pre-pandemic levels and continues to decline % -10 -8 -6 -4 -2 0 2 4 6 8 Jan-20 Jul-20 Jan-21 Jul-19 Jul-21 Jan-22 Jul-22 1% 0 2 4 6 8 10 12 14 Jan-21 Jan-22 Jul-19 Jul-21 Jul-22 Jan-19 Jan-20 Jul-20 13% 0 2 4 6 8 10 12 14 Jan-21 Jul-20 Jul-21 Jan-19 Jan-20 Jul-19 Jan-22 Jul-22 12% 0 5 10 15 Jul-22 Jan-21 Jul-20 Jul-21 Jan-22 Jan-19 Jul-19 Jan-20 10% Brazil: Macroeconomic snapshot Note: (*) growth rate is GDP in comparison to previous quarter; (**) inflation rate measures a broad rise or fall in prices that consumers pay for a standard basket of goods Source: Trading Economics
  • 148.
    148 8.0 8.5 9.5 7.0 6.0 5.5 5.0 12.0 10.5 Jul-22 11.0 May-22 11.5 13.5 13.0 12.5 7.5 Nov-21 6.5 Jan-22 9.0 Mar-22 14.0 10.0 85% 15% Local Imported Fertilizer usage in20211 Food Inflation2 Jan-21 4.8 3.8 4.4 5.0 3.2 5.4 3.0 4.2 4.0 Jan-22 3.4 5.6 4.6 Jan-23 5.2 3.6 5.8 Jan-20 Jan-19 R$ US$ to R$ Exchange Rate2* As an attempt to control food inflation, the government eliminated import tax rate for some food and chemicals used in making fertilizers Brazil: Currency depreciation and high commodity prices have impacted Brazil, a big importer of fertilizers Note: (*) Monthly average exchange rate (US$-R$) Source: (1) CNN “Importação de fertilizantes pelo Brasil aumenta 440% de 1998 a 2021” (June 2022); (2) Trading Economics
  • 149.
    149 Note: (*)Growth rate is GDP in comparison to previous quarter; (**) The region refers to Argentina, Brazil, Chile, Colombia, and Mexico The CPI reflects the prices and spending patterns registered in the regional capitals and suburban areas of the fifteen regions of Chile. Source: Trading Economics GDP growth rate* is not only decreasing but also in decline, making Chile the only country in the region** with a shrinking economy % Interest rates are climbing, having more than tripled since 2019 % Inflation is rising steeply compared to pre-pandemic levels % Chile is the only country in the region where unemployment increased in 2022 and remains above pre-pandemic levels % -15 -10 -5 0 5 10 Jan-20 Jul-22 Jul-21 Jul-19 Jan-21 Jan-22 Jul-20 -1% 0 2 4 6 8 10 Jul 2022 10% Jan 2019 Jan 2021 Jan 2020 Jan 2022 0 5 10 15 Jan-20 Jul-22 Jul-19 Jan-21 Jul-21 Jan-19 Jul-20 Jan-22 13% 0 2 4 6 8 10 12 14 Jul-22 Jan-20 Jul-21 Jan-21 Jul-20 Jul-19 Jan-22 Jan-19 8% Chile: Macroeconomic snapshot
  • 150.
    150 Note: (*)Growth rate is GDP in comparison to previous quarter Source: Trading Economics GDP growth rate* has started to decrease but like in Argentina remains above pre-pandemic levels, % Interest rates have started to rise, and are currently above pre- pandemic level, as in Brazil and Chile, % Inflation is rising, % Unemployment continues to fall, % -20 -15 -10 -5 0 5 10 15 Jul-20 Jan-20 Jul-21 Jul-19 Jan-22 Jan-21 Jul-22 0 1 2 3 4 5 6 7 8 Jul-20 Jan-20 Jan-21 Jul-21 Jan-22 Jan-19 Jul-22 Jul-19 0 2 4 6 8 10 Jan-20 Jul-21 Jul-20 Jan-19 Jan-21 Jan-22 Jul-22 Jul-19 0 5 10 15 20 25 Jul-22 Jul-19 Jan-20 Jul-21 Jan-19 Jan-22 Jul-20 Jan-21 Colombia: Macroeconomic snapshot
  • 151.
    151 Exports US$ B Jan-22 Apr-20 Apr-22Jul-22 0.0 5.5 Oct-21 Oct-19 Jan-21 Jan-19 1.5 Jul-20 2.5 3.5 3.0 4.0 4.5 5.0 1.0 Apr-21 Jan-20 2.0 Jul-19 Jul-21 0.5 6.0 Apr-19 Oct-20 Colombia: As a major oil exporter, higher commodity prices have strengthened Colombia’s exports Source: Trading Economics
  • 152.
    152 Note: (*) growthrate is GDP in comparison to previous quarter; (**) The CPI index has a base of 100 as of December of 2010. The national index tracks 46 large, medium and small cities. Source: Trading Economics GDP growth rate* has started to increase, % Interest rates have started to rise but like in Argentina remain below pre-pandemic levels, % Inflation** is on the rise and above pre-pandemic levels, % Unemployment has started to increase, % -20 -15 -10 -5 0 5 10 15 Jan-21 Jul-20 Jul-21 Jan-20 Jan-22 Jul-22 Jul-19 1% 0 2 4 6 8 10 Jul-20 Jul-19 Jul-22 Jan-21 Jan-20 Jul-21 Jan-22 Jan-19 8% 0 1 2 3 4 5 6 7 8 Jul-20 Jan-19 Jan-21 Jan-20 Jul-22 Jul-21 Jul-19 Jan-22 8% 0 1 2 3 4 5 6 Jan-19 Jan-20 Jul-21 Jul-22 Jan-21 Jan-22 Jul-20 Jul-19 3% Mexico: Macroeconomic snapshot
  • 153.
    153 Source: Trading Economics Exports US$B 35,000 45,000 20,000 15,000 10,000 50,000 0 Jul-22 55,000 Apr-19 Jan-21 Apr-21 Jan-20 Jan-22 Oct-19 Jan-19 Jul-21 Jul-20 Jul-19 Apr-20 30,000 Oct-20 Oct-21 5,000 Apr-22 25,000 40,000 Mexico: Mexican exports were impacted by the Russian invasion of Ukraine
  • 154.
    154 Source: (1) TradingEconomics (2) Goberno de Mexico, INEGI Tourism GDP Index 2013=100 114 59 77 86 86 94 96 102 106 Q2 2021 Q4 2020 Q2 2020 Q1 2020 Q4 2021 Q3 2020 Q3 2021 Q1 2022 Q1 2021 Mexico: Mexican tourism has started to recover
  • 155.
    155 + + + + 2.2 TheLatin American Opportunity Appendix Slides
  • 156.
    156 0.1% 2020 10.0% 2005 100.0% 2015 2010 1.0% India China Brazil USA LatAm 2020 0.1% 2015 2010 1.0% 10.0% 2005 Atlantico Digital TransformationIndex Tech company market cap as % of GDP, log scale Atlantico Digital Transformation Index, Brazil Tech company market cap as % of GDP, log scale Tech penetration has been growing massively across the world, with Brazil and LatAm heading on the same direction Note: HQ location was used to define company region; for all countries we used the average of the respective year’s quarters to calculate GDP and market cap Source: (1) Capital IQ; (2) GDP projections from OECD, log scale; (3) Atlantico analysis
  • 157.
    157 Brazil could createseveral hundreds of billions in value as it catches up to tech penetration in more digitalized regions Brazil Tech Value Creation Catch-up Potential US$ B Catchup India Catchup China Catchup USA Brazil Brazil +$825 B Brazil +$187 B Brazil +$237 B Note: HQ location was used to define company region; for all countries we used the average of the respective year’s quarters to calculate GDP and market cap Source: (1) Capital IQ; (2) GDP projections from OECD, log scale; (3) Atlantico analysis
  • 158.
    158 Uses technology, data analysis, andintelligence generation to increase security and reduce crime CRIME & SAFETY Global Peace Index Ranking** (out of 163)1 Safety and security rating*** (scale of 1-5)1 Perceived criminality in society*** (scale of 1- 5)1 130 129 34 3.3 2.4 2.0 3.6 2.0 1.7 3 89 1.3 2.1 Aims to reduce violence against women by creating an app exclusive for women and children ACCESS TO FINANCE Percentage of unbanked population2 Percentage of population (+15ys) with credit cards3 30% 7% 4% 27% 66% 65% 2 20% 21% Provide platforms to facilitate various steps of the supply chain, from procurement to fulfillment & last-mile delivery Logistics Performance Index* (scale of 1-5)4 2.9 4.1 4.0 LOGISTICS COMPLEXITY 1 3.8 LatAm still has many problems to solve, and entrepreneurs have been solving them in creative and localized ways Aims to promote citizen safety through data gathering to offer real-time notifications of risky events Focus on being the neobanks for the Gen Z population, offering cards and digital account Enables companies to offer financial services to employees through private label workplace bank Offer LatAm consumers credit alternatives through digitally-enabled lending models Note: (*) Logistics Performance Index is an assessment of the quality of trade and transport related infrastructure on a scale from 1 (worst) to 5 (best); (**) Global Peace Index Ranking ranks countries from the most peaceful to the most dangerous; (***) the Safety and Security rating and Perceived criminality in society is measured on a scale of 1 to 5, where 1 is the safest and with lowest levels of crime and 5 is the most dangerous with highest perceived criminality in society. Source: (1) Vision of Humanity “Global Peace Index” (2022); (2) Global Finance “World's Most Unbanked Countries" (2021); (3) Global Economy “Percent people with credit cards - Country rankings” (2017); (4) SDG Index “Sustainable Development Report” (2022)
  • 159.
  • 160.
    160 1,150 700 525 500 500 485 430 420 385 350 310 300 Series D Series D SeriesD Series E Series D Series F Series F Series E Series B Series D Series E Series G The prominence of fintechs among Latin American unicorns reinforces investors’ interest in the sector Fintech unicorns and public companies in Latin America* Largest VC rounds by funding amount, 2021-2022** US$ M Fintech Non-fintech Note: (*) Unicorns refer to private technology companies with a valuation of over US$ 1B, Nubank, dLocal, Stone, and PagSeguro are no longer unicorns given they are now public companies; (**) Up to August 15th, 2022 Source: Bloomberg, Crunchbase, PitchBook, Reuters
  • 161.
    161 0.0 0.0 0.51.6 3.7 59.6 Q1 Q3 48.1 37.1 29.7 15.6 Q1 Q1 7.7 Q3 23.5 Q3 Q3 Q1 Q3 Q3 Q3 Q1 Q1 Q1 Q1 Q3 Q1 2014 2015 2016 2017 2018 2019 2020 2021 2022 5 9 10 13 14 14 5 6 2 2 3 5 10 13 13 14 6 7 8 9 15 21 23 24 16 11 7 6 52 2012 2017 2021 47 2020 9 2019 50 35 2018 2015 2014 23 2013 2016 +9X Argentina Mexico Brazil By September 2021, Nubank had provided the first credit card or bank account to ~5MM people2 The first wave of the fintech boom was consumer-centric and marked by an explosion of neobanks Number of neobanks in Latin America1 Number of Nubank customers2 MM Source: (1) BPC and Fincog, “Digital banking in Latin America” (2022); (2) Nubank SEC F-1 (2021) and Q1 2022 Earnings Presentation (2022)
  • 162.
    162 9.4 18.5 14.5 16.0 12.1 13.8 4.3 7.2 2018 2019 20202021 Debit Cards Int’l Credit Cards Cash- Based 14 14 15 17 19 $2.9 $5.5 $3.3 4Q21 $3.5 2Q21 $7.1 1Q21 4Q20 3Q21 Digital Wallets Payments, including digital wallets, were central to the early consumer fintech boom and have continued to grow E-commerce means of payments in Brazil1* US$ B Mercado Pago wallet payers & digital account TPV2 Payers in MM and total payment volume in US$ B Note: (*) Excluding domestic credit cards, bank transfers, and other forms of payment Source: (1) EBANX, “Beyond Borders” (2022); (2) Mercado Libre Fourth Quarter 2021 Results Investor Presentation (2021)
  • 163.
    163 2016 2018 The BrazilianCentral Bank allows banks to register and onboard retail customers 100% digitally Cause Digital banks arise Incumbents shut down many of their physical branches Effect 19.3 20.7 21.6 23.4 2020 2019 2018 22.9 18.3 2017 21.8 2016 2021 2015 Number of physical bank branches in Brazil Thousands The Brazilian Central Bank creates new types of companies (SCD and SEP*) that allow fintechs to offer credit without the need for partnerships with traditional financial institutions Cause Over 50 companies emerge or start to offer credit products in-house as one of these new types of business structures Effect 51 Number of fintechs offering credit in-house in Brazil** Jan-19 Dec-20 Regulatory changes enabled much of the first wave of B2C innovation and will continue to be a driver for the B2B wave Note: (*) Direct Credit Society (Sociedade de Crédito Direto) and Society of Loans Between People (Sociedade de Empréstimo entre Pessoas), respectively; (**) as SCDs or SEPs Source: Brazilian Central Bank
  • 164.
    164 2019 The Brazilian CentralBank creates the legal framework for receivables registrars to bring transparency to this market, allowing credit grantors to see the receivables of businesses that are not their customers yet and offer them credit alternatives with this information Cause Monthly financial volume registered in CERC* R$ B The creation of receivables registrars (registradoras de recebíveis) was a landmark in the Brazilian credit market Receivables registrars start to operate in June 2021, promising to enable businesses to have more credit options at cheaper prices In practice, though, credit options have not become significantly cheaper due to technical challenges in the implementation, which the Brazilian Central Bank is working to address Effect 2021 45 88 Card receivables Jun -22 Feb -22 3 Jan -22 Dec -21 Other financial assets Duplicatas** Oct -21 Sep -21 Jul -22 Jul -21 May -22 Aug -21 5 Nov -21 Mar -22 120 Apr -22 10.51% 19.21% 8.51% 7.46% Jan-21 Jul-21 Jan-22 Jul-22 Jul-20 Difference between average rate and base rate Average interest rate Receivables-based interest rate2 Note: (*) CERC is a receivable registrar; (**) Duplicatas are a form of credit widely used in Brazil Source: (1) CERC “Estatísticas de Ativos” (2022); (2) Federação Brasileira de Bancos “Panorama do Mercado de Crédito” (2022) and Banco Central do Brasil “Taxa Selic” (2022)
  • 165.
    165 1.2 0.5 Dec-22 0.0 Jul-22 Jun-22 0.1 Dec-22 2.1 Jun-22 Jun-22 2.8 Jan-22 0.2 2+ million Users since2020 launch 10+ million Transfers made COL$ 120k* Average transfer amount Minka built TransfiYa, Colombia’s instant P2P payment system, after winning a public concession Minka monthly number of transactions Millions TransfiYa numbers Minka is building a seamless and open network that enables money to be moved in real time, starting in Colombia Note: (*) The US Dollar to Colombian Peso exchange rate on Aug. 12th, 2022 was 4167.34 and averaged 4001.01 in 2022 Source: Minka internal data
  • 166.
    166 Frequency of useby payment method % of respondents 9% 14% 15% 5% 18% 10% 53% 51% 16% 37% 31% 36% 21% 30% 8% 7% 6% 17% 22% 9% 20% 6% 27% 23% 28% 24% 27% 30% 31% 33% 48% 47% 26% 20% 18% 30% 14% 18% 40% 22% 17% 13% 39% 62% 34% 30% 6% 15% 9% 15% Brazil Argentina Colombia 1% Mexico 3% 3% US Brazil 3% 3% Chile Argentina 1% Colombia 2% Mexico US 2% Chile Never Weekly Monthly Yearly Daily Cash Bank transfers Use of different payment methods varies considerably across countries in the Americas (pt. 1) + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
  • 167.
    167 Frequency of useby payment method % of respondents 38% 59% 11% 37% 23% 19% 59% 65% 44% 63% 29% 19% 28% 19% 5% 5% 8% 10% 9% 5% 6% 24% 13% 11% 18% 16% 10% 23% 17% 17% 12% 23% 27% 9% 8% 24% 17% 21% 25% 12% 8% 16% 10% 20% 22% 50% 23% 36% 42% 6% 1% 14% 6% 23% 26% Argentina Colombia 1% 4% 4% Mexico US Brazil Mexico Brazil Chile Colombia Chile US Argentina Monthly Never Weekly Yearly Daily Debit cards Credit cards Use of different payment methods varies considerably across countries in the Americas (pt. 2) + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
  • 168.
    168 Frequency of useby payment method % of respondents 74% 72% 51% 79% 50% 38% 94% 96% 94% 95% 94% 93% 5% 9% 8% 8% 8% 1% 5% 12% 15% 26% 6% 19% 31% 1% 2% 1% 2% 2% 2% 7% 6% 12% 3% 11% 17% 1% 2% 1% 2% 1% 6% 13% 6% 1% 1% 2% Chile Brazil Argentina 2% Brazil Mexico Colombia Chile Mexico 1% 3% US 4% Colombia 4% US 2% 2% Argentina Payment apps Cryptocurrencies Never Weekly Monthly Yearly Daily Use of different payment methods varies considerably across countries in the Americas (pt. 3) + Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2-3% confidence interval)
  • 169.
    169 136 313 554 1,288 2,065 6,049 2019 2017 2021 2020 2016 2018 +114%CAGR 4 5 6 7 2021 2020 2019 2018 dLocal enables companies to make and accept local payments in Latin America and other emerging markets dLocal, from Uruguay, offers an all-in-one payment platform focused on allowing businesses to process payments in countries ranging from Argentina to Uganda dLocal total payment volume US$ MM Average number of countries served per dLocal customer Source: dLocal SEC F-1 (2021) and 2Q 2021 Earnings Presentation
  • 170.
    170 Access Open to only58 financial institutions in 20201 Open to over 700 financial institutions since inception2 Standalone app that connects to accounts in the institutions Institutions must embed Pix in their apps into the login flow Integration In 2018, only ~8 million people had access to mobile banking, 8% of Mexico’s adult population3 In 2019, there were >88MM active mobile banking accounts for individuals4 Prior Mobile Banking Adoption Transaction Types Only P2B P2P, P2B, B2P, B2B, P2G, and B2G 1,930.5 June 2022 0.23 8,400X CoDi Pix Transaction volume in June 20221,2 Monthly transaction in millions The instant success of Brazil’s Pix starkly contrasts the disappointing traction of Mexico’s CoDi Source: (1) Banco de México; (2) Banco Central do Brasil; (3) World Bank, INECGI; (4) Febraban
  • 171.
    171 + + + + 3.2 SMBDigitalization Appendix Slides
  • 172.
    172 Latin American SMBsshow lower productivity levels, at 33% of the OECD average1 Labor Productivity by firm size, manufacturing Value added per person employed, large firm productivity = 100 Labor Productivity by firm size, business service2 Value added per person employed, large firm productivity = 100 36 35 50 56 50 48 58 62 72 United Kingdom Mexico 61 Spain 100 Germany Brazil Medium (50-249 workers) Small (10-49 workers) Micro (1-9 workers) 72 29 73 55 98 128 89 109 111 United Kingdom 100 104 Mexico Spain Germany Brazil Medium (50-249 workers) Small (10-49 workers) Micro (1-9 workers) Source: (1) OECD “SME and Entrepreneurship Policy in Brazil” (2020); (2) OECD “OECD Compendium of Productivity Indicators” (2021)
  • 173.
    173 COVID-19 pandemic digital-relatedimpacts on SMBs % of surveyed companies The COVID-19 pandemic accentuated the need for SMB digitalization, driving increased interest in tech solutions 68% 50% 46% 35% 25% More problems with delivery & logistics Need to switch to online sales Higher procurement costs High burden of IT infrastructure Need to change to remote work SMBs’ interest in digital solutions use cases % of surveyed companies Process optimization 16% 17% 9% 9% 13% Employee training 19% Quality management 6% 7% Inventory planning Data accessibility 10% 18% +171% +80% +89% +78% +117% After COVID-19 (2021) Before COVID-19 (2019) Only 11% of large companies reported need to switch to online sales Source: World Economic Forum “COVID-19 and Technology Adoption in Small and Medium-Sized Enterprises: The Impact and the Way Forward” (2021)
  • 174.
    174 Connecting SMBs tothird party providers to reduce costs and allow for more flexibility when obtaining sporadic services Payment Solutions Financial Services Commercial / Sales Relations Helping SMBs manage all facets of their business with solutions focused on areas ranging from HR to financial management Streamlining relationships with suppliers, carriers, manufacturers, and other important players in the SMB’s supply chain Meeting the demand for facilitation and digitalization of payment and billing for products and services from customers Offering credit, financing and banking solutions (that are often challenging for SMBs to access) and digital management Outsourcing Services Business Management Sales and Customer Relationships Providing tools to digitalize marketing and sales of products as well as collect business analytics and intelligence Tech companies focused on SMB digitalization are on the rise, helping SMBs tackle multiple pain points Source: Distrito Dataminer Flash Report Startups para PMEs, Atlantico Analysis
  • 175.
    175 Price variation from15 suppliers for the same product on the same day3 São Paulo To buy inventory for their shops, 1 million SMBs’ owners take risky, exhausting and expensive trips to São Paulo every month 26% 36% 39% 43% 22% 64% Italy Russia France Canada 70% 98% Mexico United States Brazil China 26% Colombia 40% India 1.58x 1.31x 1.00x 0.89x Bottom Top Average No brand 1.00x 1.25x Top Bottom Average 1.47x 0.85x No brand Top No brand Average 1.00x 0.31x Bottom 2.23x 1.47x In a fragmented market like Latin America, SMBs often face a costly and inefficient procurement process Degree of fragmentation in grocery market1 %*, 2022 Impact of highly fragmented market Complex process to obtain inventory for shops across Brazil2 Rice Brand: Camil Refined sugar Brand: União Meat broth Brand: Knorr Note: (*) Percentage is based on revenue pool that is driven by independent grocers rather than large chains. Source: (1) McKinsey “Digital disruption: The rise of eB2B in fragmented retail” (2022); (2) Zax, (3) Cayena
  • 176.
    176 Zax gross merchandisevolume Indexed to Q1 2020 (=100) Zax number of sellers Indexed to February 2020 (=100) 100 496 585 789 819 1,400 1,274 1,770 1,774 2,941 Q3 Q4 Q2 Q3 Q2 Q1 Q2 Q1 Q4 Q1 +259% 100 1,353 1,997 2,372 2,672 Jan-20 Jan-22 Jan-21 2,031 366 863 1,859 1,106 2,238 1,372 2,647 556 Business Model: B2B platform connecting retailers and wholesalers to digitize and streamline the purchase & sale of merchandise, with additional offerings such as: Zax is a B2B marketplace streamlining the complex procurement process for SMBs in a cost-efficient way Wholesale marketplace (product discovery and safe transactions) SaaS (Organizing and centralizing wholesale SMBs online sales) Fintech (credit offer, full payments and banking solutions) Logistics (Providing faire priced agile shipping for wholesale shoppers) 2020 2021 2022 Source: Zax internal data
  • 177.
    177 Business Model: Growth insales Monthly TPV in US$ M Sumer offers a one-stop solution for merchants to create, manage, and grow their online businesses, with in-house and integrated solutions, including: Online store creation Marketing tools Shipping Payments Store customization Bookkeeping 2.1 1.9 1.8 4.2 0.7 0.2 2.6 May-22 Jan-22 Feb-22 Dec-21 5.2 Nov-21 Mar-22 Oct-21 Apr-22 +40% CMGR* 88 117 97 136 135 169 201 240 Apr-22 Feb-22 may/22 Dec-21 Nov-21 Mar-22 Oct-21 Jan-22 2.7x Growth in monthly merchant sales Average merchant TPV in US$ Sumer: the rise of “Superapps” designed to generate limitless feature expansion through an app ecosystem Note: (*) CMGR stands for Compound Monthly Growth Rate Source: Sumer internal data
  • 178.
    178 + + + + 3.3 Web3& Crypto Appendix Slides
  • 179.
    179 Global Funding forblockchain and crypto and across sectors US$ B 0 1 2 3 4 5 6 7 8 9 10 0 20 40 60 80 100 120 140 160 180 Q3 2021 Q4 2021 Q1 2022 Q2 2019 Q2 2020 Q2 2021 Q1 2021 Q3 2019 Q3 2020 Q2 2022 Q1 2020 Q4 2019 Q4 2020 Q1 2019 Global Blockchain funding (B) Global venture funding (B) 2021 CAGR: 18% 2021 CAGR: 68% Despite a decline in funding for Q2’22, blockchain funding increased more steeply in 2021 than funding across other categories combined and was hit later After increasing for eight consecutive quarters, global blockchain funding declined in Q2 2022 Source: CB Insights, State of Blockchain Q1 ’22, Q2 ‘22 ; State of Venture Q2’22
  • 180.
    180 250 250 25 26 25 50 21 Money Raised (US$ M) Country Mexico Brazil Argentina Brazil Mexico Argentina Brazil 64 797 642 157 82 47 Q32021 Q2 2022 Q1 2022 Q2 2021 Q4 2021 Q1 2021 LatAm blockchain companies have attracted plenty of funding since 2021 and are well-capitalized Volume of funding for Latin America blockchain companies1* US$ M Largest deals in Latin America2,3** Q1 21 to Q2 22 Despite a decline in funding during Q2 2022, blockchain funding increased more steeply in 2021 than funding across other categories combined and started declining later Brazil Brazil 190 150 Note: (*) Excluding FTX; (**) Filtered by industry – “Crypto/Blockchain” for deals that occurred 01/01/21-06/30/22, rounded to the nearest whole number, Cloudwalk is a payments company that has a strong crypto element to its strategy Source: (1) CB Insights “State of Blockchain Q2” (2022) and “State of Blockchain” (2021); (2) Pitchbook (3) Crunchbase
  • 181.
    181 0.41 0.88 1.45 1.93 0.19 0.41 Binance Coinbase 0.48 Bitcoin Trade Huobi Crypto.com KuCoin Trust: Crypto& Bitcoin Wallet Bitso MetaMask 0.58 Mercado Bitcoin 0.19 0.67 “Cryptocurrency Exchange Crypto.com arrives in Brazil” May 11, 2021 March 16, 2022 March 27, 2022 Global players lead the Brazilian market and have moved into the country, reinforcing belief in its long-term potential Top 10 most downloaded cryptocurrency apps by Brazilians1* Number of downloads in 2022, MM Most of the top 10 apps are crypto exchanges, illustrating the overall interest for cryptoassets in the country Note: (*) Downloads made on Android and iOS devices between Jan 1th and June 30th, 2022 Source: (1) Yahoo “2 dos 10 apps de cripto mais baixados são brasileiros; veja lista” (June 2022)
  • 182.
    182 Mercado Bitcoin isa Brazilian unicorn offering a robust crypto exchange platform, currently with 3.6 million investors 38 108 136 138 1,434 775 267 7.5 4.2 8.6 7.4 7.2 57.2 $0k $5k $10k $15k $20k $25k $30k $35k $40k $45k $50k $55k $60k 0 500 1,000 1,500 1H22 31.5 29.4 2H20 1H18 1H20 9.2 1H19 211 2H18 100 1H21 2H21 2H19 Mercado Bitcoin total transaction volume Indexed to 1H 2018 (=100) Mercado Bitcoin total customer base Millions of customers Mercado Bitcoin is a cryptocurrency exchange platform that allows people to trade cryptocurrency, digital assets, and other tokens all in one place 1.0M 1.8M 1.9M 3.6M 1H22 2H21 3.3M 2.9M 2H20 2.1M 2H19 1H21 1H19 1.5M 1H20 2H18 1.2M 1H18 Despite contraction, 2022 volume is still way above historical, pre-bull market levels Bitcoin price (US$k) Volume (indexed) Source: Mercado Bitcoin internal data
  • 183.
    183 Despite cryptocurrencies’ steepdecrease in value, investors are not giving up on cryptoassets + 26% Increase in number of Investors since June 2021 - 47% decrease in Bitcoin value since June 2021 $30k $70k $0k $40k $60k $10k $20k $50k 200k 300k 232k Jul -22 Mar -22 Apr -22 Jan -22 247k 239k Jun -22 292k Dec -21 Nov -21 Feb -22 290k Jun -21 232k Oct -21 251k May -22 264k 272k Jul -21 286k 291k 288k 296k Sep -21 295k Aug -21 Number of investors Bitcoin price Trends Hashdex is a cryptocurrency investment firm that aims to unlock the blockchain’s potential in Brazil through indices, ETFs, funds, research, and other services Hashdex number of investors and Bitcoin’s price* Thousands and US$ k, respectively Note: (*) Number of investors refers to those who have at least 1 Brazilian Real in any of the Hashdex funds on the last day of each month Source: Hashdex internal data
  • 184.
    184 Main countries inLatin America still lag a lot behind the US in crypto ownership, with Mexico being the exception Crypto ownership across countries % of respondents 0.7% US 5.4% 11.4% Colombia Mexico 4.8% 15% Argentina 3.6% Brazil Chile + Source: Atlantico and Atlas Intel Brazil survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2- 3% confidence interval) Question: “Do you own any form of cryptocurrency” (2022)
  • 185.
    185 Crypto literacy resultsacross countries* % of respondents Persistent knowledge gap remains a barrier to crypto adoption throughout Latin America 8% 5% 9% 9% 10% 16% 29% 48% 31% 22% 33% 33% 29% 8% 26% 14% 34% 43% 37% 35% 34% 61% 23% Very informed US I know nothing at all about cryptocurrency Argentina Not very informed Colombia Somewhat informed 3% Chile Brazil Mexico + Note: (*) Results per country may not sum up to 100% due to rounding Source: Atlantico and Atlas Intel Brazil survey 2022, collected from Aug 1st to Aug 28th (representative of population, n=6,449, 2- 3% confidence interval) Question: “How informed are you in regard to cryptocurrencies, like Bitcoin and Ethereum” (2022)
  • 186.
    186 LoopiPay is aBrazilian company tackling the crypto accessibility gap by helping onboard new users into web3 technology with less friction From traditional banks to crypto assets in a wallet 2,594 Jul-22 Apr-22 Jun-22 May-22 Mar-22 664 1,971 1,579 100 26X LoopiPay total payment volume Indexed to March 2022 (=100) LoopiPay allows users to buy cryptocurrencies and other tokens using PIX - the Brazilian Central Bank’s instant payment systems Source: LoopiPay internal data
  • 187.
    187 Brazil Usage: Has proposedlegislation that aims to regulate crypto-assets in payments, investments, and transfers1 Taxation: Cryptocurrencies are included under the Argentinian “check tax” collection, and earnings and holdings should be reported3 Usage: Currently working to develop a framework to regulate cryptocurrencies and potentially recognize them as a form of payment1 Taxation: Any transactions should be reported in the income tax filing2 Usage: Has a legal framework for financial institutions, which prohibits them from transacting with virtual assets unless prior authorization from the government 1 Taxation: There are no specific tax regulations addressing cryptocurrencies, but income derived from cryptocurrency transactions are taxable4 Usage: Currently drafting regulation for the use of crypto after conducting a pilot project within a regulatory sandbox7 Taxation: Cryptocurrencies are classified as intangible assets and should be reported in the income tax filing6 Usage: Has launched a regulatory sandbox and currently requires the identification of customers and all transactions to be reported and kept on record1 Taxation: Earnings and holdings should be reported but are only taxable if above a certain threshold 5 Usage: Allows consumers to use cryptocurrency in all transactions and presented the measure to promote economic development and jobs2 Taxation: Investors are exempt from paying capital gains and income taxes on Bitcoin5 Governments have also been active in regulating the crypto space to define rules of conduct and protect users Chile Argentina Mexico Colombia El Salvador Note: Information gathered on July 7th, 2022; Colombia information updated on August 23rd, 2022 Source: (1) Thomson Reuters “Cryptos on the rise 2022” (2022); (2) PWC; (3) Business Insider; (4) Coin Text; (5) Coin Telegraph; (6) BBC; (7) Bloomberg Línea
  • 188.
    188 Credix’s Total ValueLocked, 2022 US$ M Credix is a B2B credit marketplace, bringing complex, fixed-income market logic to DeFi using real world assets Credix is a decentralized B2B credit marketplace that enables borrowers in emerging countries to access global previously untapped capital 1.0 5.0 7.0 9.5 10.0 17.6 22.9 0 2 4 6 8 10 12 14 16 18 20 22 24 6-Feb 21-Aug 7-Aug 24-Jul 20-Feb 26-Jun 3-Apr 10-Jul 20-Mar 15-May 12-Jun 6-Mar 29-May 29-Aug 1-May 17-Apr 23-Jan 17.4 15.2 Source: Credix public data
  • 189.
    189 WEB3 820k NFT sales transactions2 1MM NFTsales transactions3 WEB2 Local players are helping onboard games into web3 prioritizing asset ownership and launching a secondary market, or supporting web3 games with new solutions Falco offered web3 infrastructure to games Mouse Haunt and The Harvest - developing the marketplace and integrating tokens and NFTs in the game3 238 273 Payers Non-Payers 53% 47% 2020 258 2021 2019 54% 57% 46% 43% Games Number of Payers and Players in Latin America1 Total number of players in millions Gaming has mobilized millions in digital assets allowing gamers to take ownership of parts of the experience Source: (1) NewZoo; (2) Prota Games internal data; (3) Falco internal data; (4) Bayz Among other services, Bayz is helping web3 games monetize in alternative ways to NFTs, such as content creation, marketing, e-sport event organization, and more4
  • 190.
    190 HNT Digital totalhotspot networks and Helium token price # of hotspots; US$ HNT Digital is the first and main Brazilian company deploying the Helium network infrastructure in the country. Helium is a blockchain-based decentralized global wireless network. Token price volatility has been a challenge for Helium and a constraint on new Capex deployment 297 781 1,498 1,614 1,621 $12.7 $39.7 0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 Q1 $24.2 Q2 Q4 Q3 $9.4 $18.6 Q2 Active Hotspots (HNT Digital) Helium price (US$) Given crypto volatility, Helium token price has fluctuated, affecting the deployment rate of new hotspots and Capex investment pace Helium has become the largest IoT (Internet of Things) network in the world and long-term plan to provide infrastructure for 5G, WiFi, VPN and others Helium project seeks to roll out a global decentralized wireless network by leveraging token incentives to drive hotspot deployment HNT Digital is a Brazil-focused startup deploying and managing Helium hotspots across the whole country Source: HNT Digital internal data Local companies are also betting on global Web3 projects: HNT Digital is the largest Helium network builder in Brazil 2021 2022
  • 191.
    191 + + + + Support Data PrimarySurvey Demographics Appendix Slides
  • 192.
    192 Argentina survey paneldistribution | Atlantico and AtlasIntel Argentina survey panel distribution % of respondents (n = 878) 48% 52% Female Gender Male 14% 23% 22% 25% 16% 60+ years 45-59 35-44 25-34 16-24 years Age 12% 32% 22% 21% 14% 15-30k 45-110k ARS 0-15k 30-45k ARS 110k+ Monthly household income 42% 45% 14% Bachelor High school Middle school Education 29% 6% 14% 51% Protestant 100 Agnostic or atheist Other religions Catholic Religion Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 878, 3% confidence interval)
  • 193.
    193 Brazil survey paneldistribution | Atlantico and AtlasIntel Brazil survey panel distribution % of respondents (n = 2,262) 46% 54% Male Female Gender 19% 26% 19% 21% 14% 60+ years 45-59 25-34 Age 35-44 16-24 years 9% 17% 18% 21% 36% > 10 min. wages 5-10 min. wages 3-5 min. wages < 2 min. wages 2-3 min. wages Monthly household income 42% 45% 14% Bachelor High school Education Middle school 51% 29% 14% 6% Agnostic or atheist Protestant Catholic Other religions Religion Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 2,262, 2% confidence interval)
  • 194.
    194 Chile survey paneldistribution | Atlantico and AtlasIntel Chile survey panel distribution % of respondents (n = 812) 48% 52% Male Female Gender 60+ years 35-44 45-59 25-34 18-24 years 19% 28% 18% Age 15% 21% 42% 51% 8% Bachelor Middle school High school Education 44% 27% 14% 16% Catholic Protestant Agnostic or atheist Other religions Religion 11% 20% 30% 20% 19% 1-2M CLP 2M+ Monthly household income 400-600k CLP 0-400k 0.6-1M Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 812, 3% confidence interval)
  • 195.
    195 Colombia survey paneldistribution | Atlantico and AtlasIntel Colombia survey panel distribution % of respondents (n = 848) 47% 53% Male Female Gender 27% 18% 20% 24% 12% 55+ years 45-54 Age 35-44 25-34 18-24 years 32% 68% Bachelor Middle/high school Education 63% 14% 22% Catholic Agnostic or atheist Protestant Other religions 1% Religion 12% 16% 34% 21% 17% COP 4M+ 2-4M COP 0-400k 0.9-2M 400-900k Monthly household income Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 848, 3% confidence interval)
  • 196.
    196 Mexico survey paneldistribution | Atlantico and AtlasIntel Mexico survey panel distribution % of respondents (n = 818) 47% 53% Male Female Gender 60+ years 35-44 15% Age 21% 16-24 years 28% 45-59 18% 25-34 19% 30% 28% 25% 17% Technical Bachelor Middle school Education High school 72% 6% 7% 14% Catholic Agnostic or atheist Protestant Other religions Religion 32% 27% 24% 18% 15k+ pesos 10-15k < 5k pesos 5-10k Monthly household income Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 818, 3% confidence interval)
  • 197.
    197 USA survey paneldistribution | Atlantico and AtlasIntel USA survey panel distribution % of respondents (n = 831) 49% 52% Gender Male Female 18-29 years 22% 30-44 39% 45-64 23% 16% Age 65+ 41% 59% College degree or higher All other Education 26% 39% 35% 50-100k < US$50k US$100k+ Monthly household income Source: Atlantico and AtlasIntel survey 2022, collected from Aug 1st to Aug 28th (representative of population, n = 831, 3% confidence interval)
  • 198.
    198 Survey panel distribution| Atlantico and Runa Survey panel distribution % of respondents (n = 515) 46% 8% 26% 6% 14% Mexico Colombia Argentina Brazil Others Company Headquarters Services Commerce Health Manufacturing Education Logistics Others Financial Services 8% Company Industry 12% 5% Tech 4% 26% 16% 20% 6% 5% 27% 37% 35% Global Single LatAm country Across LatAm Company Geographic Reach 20% 18% 12% 29% 21% 10-50 > 500 Company # of Employees 51-100 101-500 < 10 Source: Atlantico and Runa survey 2022, collected from July 4th to August 23rd (n = 515)
  • 199.
    199 72% 28% Prefer not to answer 0% Female Gender Male Surveypanel distribution | Atlantico and Vertico Survey panel distribution % of respondents (n = 202) 5% 9% 18% 24% 33% 11% 40-44 Age 30-34 26-29 35-39 45-49 50+ 51% 28% 8% 5% 8% 101-500 employees 501+ employees 1-30 employees 51-100 employees Company size 31-50 employees 45% 5% 11% 20% 23% Consumer goods Software Other E-commerce Financial services Industry 46% 24% 22% 7% Manager of a team Head Manager of managers Regional vice president Individual contributor Position C-suite or executive 0% 0% Source: Atlantico and Vertico Survey 2022, collected during July (n = 202 tech workers)
  • 200.