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Mexican start-up gets Latin America’s largest-ever seed funding

A Latin Lawyer’s article as published on Nader, Hayaux & Goebel.

Three Hogan Lovells LLP offices have helped Mexican e-commerce start-up Valoreo get a US$50 million seed investment, which is one of the largest amounts ever raised by a Latin American company in an initial funding round.

A slew of international and local start-up-focused investors, including Upper90, FJ Labs, Angel Ventures and Presight Capital, led the funding round. US fintech investor Upper90 relied on Mexico’s Nader, Hayaux & Goebel for the transaction. The investors’ international counsel asked to remain confidential.

The deal was announced on 16 February.

The funding marks Valoreo’s first-ever investment round and is among the largest-ever seed investments by a Latin American company. Seed funding refers to the initial investment received by a company, the funds of which a start-up tends to use to set up its business and cover initial operational costs.

Several angel investors – individuals who inject capital through investment rounds – also participated in the transaction. One of them was David Geisen, who heads the Mexican operations of Argentine e-commerce group Mercado Libre.

Valoreo was founded in 2020 with the aim of acquiring or investing in e-commerce businesses, scaling them up and divesting them. It also provides financial support, business tools and other resources to entrepreneurs looking to develop small and medium-sized businesses in Latin America. Aside from its Mexican presence, the start-up has intentions to expand to Brazil and Colombia.

Other Mexican start-ups have received landmark investments in recent months. E-retailer Jüsto raised US$65 million in a Series A funding round last month, the largest-ever in a second series investment round for a Latin American company. Mexican real estate start-up Casai received a US$5 million seed investment back in October, followed by a US$48 million Series A funding round.

In the second half of 2020, a slew of companies obtained substantial capital injections that resulted in them being crowned as unicorn companies – a title given to tech start-ups that are growing at an exponential speed and valued to more than US$1 billion. In September, Japanese investor SoftBank led a US$255 million funding round in Brazilian e-commerce group VTEX, which made the company a unicorn, just one week after Uruguayan start-up dLocal became a unicorn following a US$200 million investment round.

Counsel to Valoreo

Hogan Lovells LLP

Partner Nathan Cooper in Washington, DC, and associate Zachary Shub-Essig in Los Angeles
Hogan Lovells (Mexico)

Partners Juan Francisco Torres-Landa and Federico De Noriega Olea, counsel Maria Aldonza Sakar Almirante, and Francisco Palmero and associate Pablo Corcuera Bain in Mexico City

Counsel to Upper90

Nader, Hayaux & Goebel
Partner Javier Arreola and associate Adrián Mendez in Mexico City