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Ebury Raises £350M for Foreign Exchange and Currency Services for SMBs, Huawei Announces US$50M for LatAm Developers, Chilean Businesses Commit to Lowering the CEO-worker Salary Gap as Protests Continue, and more from Latin America

Other featured stories include: 5 Lessons in Digital Transformation From Brazilian Retail Giant Magal
LATAM Business Weekly
Ebury Raises £350M for Foreign Exchange and Currency Services for SMBs, Huawei Announces US$50M for LatAm Developers, Chilean Businesses Commit to Lowering the CEO-worker Salary Gap as Protests Continue, and more from Latin America
By dataPlor • Issue #43 • View online
Other featured stories include: 5 Lessons in Digital Transformation From Brazilian Retail Giant Magalu, Trump and AMLO Respond to Attack of American Women and Children at the Sonora-Chihuahua State Border, Why Latin America’s Discontent Should Not Blamed on Market-Friendly Policies, and more…

Ebury Raises £350M, Led by Santander, for Foreign Exchange and Currency Services for SMBs
Ebury, a London-based startup that allows companies to work internationally, has raised £350 million (~€400 million, or $452 million USD) led by Spanish banking giant Santander. 
Ebury provides foreign exchange, money transfer and other currency services to small and medium businesses and their banking partners. In addition to currency transfer and exchange, the platform’s service offerings and capabilities are expected to grow in the upcoming years. Last month, Ebury announced it had acquired Frontierpay, a fintech that specializes in international payroll solutions. The deal is still passing through regulatory approvals (TechCrunch). 
Ebury’s new funding will be used to support the company’s growth, specifically aimed at expanding its customer base in Latin America and Asia. 
As reported by TechCrunch
“Santander said that it has 4 million SME customers globally, and currently more than 200,000 of them do international business, while Ebury is already operating 19 countries and covers 140 currencies, with annual revenue growth of 40% in each of the last three years.”
Santander will become a majority shareholder at 50.1%, although Ebury will continue to operate as an independent entity.
“Small and medium-sized businesses are a major engine of growth around the world, creating new jobs and contributing up to 60% of total employment and up to 40% of national GDP in emerging economies… SMEs are becoming increasingly global and Santander is the best positioned bank to play a leading role to help them access global trade finance. By partnering with Ebury, Santander will deliver faster and more efficient products and services for SMEs, previously only accessible to larger corporates, ” Ana Botín, Group Executive Chairman of Banco Santander, said in a statement.
Huawei Announces US$50M for Latin American Developers and its Plans to Install Lab in Mexico
This Thursday, Chinese tech enterprise Huawei announced plans to invest US$50 million in Latin American talent
“US$1 billion are being directed to this acceleration plan, of which US$50 million are being allocated to Latin America and will arrive in 2020 in the region, only for developers… The first step will be to build the digiexlab that aims to offer the infrastructure for people to attend courses, develop, and grow.” said Carlos Morales, Huawei Mexico’s PR Manager (Contxto).
Over the next five years, this billion dollar effort hopes to strengthen the regional ecosystem.
“There’s already one in the United Arab Emirates, and the other will be in Mexico because it’s one of the most important countries for the brand. In fact, I would go as far as to say that it’s in the company’s top five, and that’s why we’re paying attention to the country, ” Morales said.
As a consequence of the trade conflict with the United States, Huawei lost access to Google’s Play Store and Android updates. Moving forward, the goal is to premier this regional fund in 2020, specifically to build a higher capacity for developers, therefore allowing them to produce new apps for the multinational company.
Chilean Businesses Commit to Lowering the CEO-worker Salary Gap as Inequality Protests Continue
Chileans have been protesting the country’s wealth disparity since October 18, with protestors demanding higher wages and a better pension system.
According to the Organization for Economic Cooperation and Development, Chile is the most economically unequal country of the world’s 30 wealthiest nations. Over one million protestors—more than 5% of the country’s population—gathered in Santiago over the past month, which is subsequently enacting nationwide change. 
Notably, a number of Chilean businesses have signed onto a pledge, agreeing to decrease salary disparities between company executives and low-wage workers.
Fast Company reports that the “10x Challenge,” or “Desafío 10x” in Spanish, encourages business owners in Chile to change the scale so that a company’s lowest salary is no more than 10 times lower than the company’s highest salary.
“According to a 2019 study cited on Desafío 10x’s website, the average general manager’s salary in Chile is more than 30 times that of a low-wage worker at the same company. Alternatively, business owners can sign onto the pledge and promise to raise their monthly salaries from the legal minimum of 301,000 Chilean pesos ($405) to about 620,000 pesos ($835). So far, 81% of the 1,108 companies that have signed onto the challenge have opted for both” (Fast Company). 
The Desafío 10x just launched, so companies are still working on organizing their next steps to enact change. However, because the challenge is voluntary, there is no promise that every business to sign on will ultimately implement salary changes, and the pledge does not state a specific deadline for companies to make the changes by. However, the Desafío 10x website states that 89% of those who’ve signed on say they will comply in three months or less.
5 Lessons in Digital Transformation From Brazil’s Retail Giant, Magalu
Deemed “the Amazon of Brazil,” retailer Magazine Luiza, commonly known Magalu, has proved itself as one of the most impressive digital transformation success stories in any industry. 
As reported by Forbes, here are five observations to help enterprise leaders apply lessons from Magalu’s success to accelerate their own businesses:
1) Change comes from the top
In the company’s Q4 2016 earning statement, Magalu CEO Federico Trajano, stated, 
“Technology [must move] from the background to center stage — and [be] seen as the brain of the business… Hierarchical structures, paralyzed by excessive bureaucracy, the fear of change and attachment to past successes, usually strongly reject the digital culture.”
This top-down approach is crucial when considering that digital transformation involves culture and process changes just as much as it relies upon technology deployments.
2) Innovators need room to innovate
Utilizing technology to transform a business begins with developers. Taking this into account, Trajano established Luizalabs. This innovation team, which began in 2012 with a handful of developers in an office, has grown to a team of over 900 employees. Trajano freed Luizalabs from the company’s heavy governance processes, therefore allowing them to operate more like a start-up; therefore producing results faster, and creating a blueprint to scale new approaches throughout the company. 
“The idea was to try to break the entire system — to show that it’s possible to have IT close to the business guys… Before, there were very heavy processes. It would take two months to get all the information,” said Magalu CTO Andre Fatala, who has led Luizalabs since the beginning.
3) IT agility is a precondition to business agility
Magalu adopted a two-speed IT approach to accelerate the customer-facing areas of the business, then phased in new approaches elsewhere. This involved using application programming interfaces, or APIs, to “decouple back-end systems from the front-end”. 
In a Google Cloud blog post, CTO Fatala said, 
“In 2013 we had an e-commerce platform, and even a library of APIs, but those APIs were accessing an overstretched backend application built with 150,000 lines of code… Deployment of new APIs was slow, we were burdened with undesirable dependencies, and we faced scalability challenges as well as distributed responsibilities across siloed teams.”
4) Digital platforms unlock new business strategies
In 2016, Magalu launched a digital marketplace that enables third parties to sell under its banner. Since this marketplace is powered by APIs, the company absorbs virtually no marginal cost each time a new merchant joins. 
“We are not only building an app, but rather a ‘superapp’: a digital environment where customers can go shopping, pay bills, top-up their mobile phones, hire transportation services, buy lunch… By attracting partners to the superapp environment we will increase our chances of attracting new customers, whose interactions with the company will be even more frequent and meaningful,” Trajano said in Magalu’s Q4 2018 earning statement.
5) Digital transformation transforms how an enterprise operates, not just its customer-facing experiences
Trajano recognized that to fully support and continue these innovations, the entire organization would need a digital overhaul. Magalu subsequently launched apps to help in-store employees optimize customer interactions, accept payments anywhere inside a store without making customers wait in a line, and guiding a customer through digital credit verification.
Trump and AMLO Respond to Attack of American Women and Children at the Sonora-Chihuahua State Border
New details of Monday’s attack in which three women and six children were killed emerged, making evident the horror unleashed on the Mexican-American Mormon family – and applying added pressure on Mexico’s president, Andrés Manuel López Obrador, to confront organized crime.
At a press conference on Wednesday, Mendoza stated that the initial investigation suggested that the family had been unwittingly caught in a turf battle between the La Línea cartel, based in Chihuahua, and a branch of the Sinaloa cartel, known as the Salazar, based in Sonora (The Guardian). 
“The attack was the latest of a string of mass killings which have tested President López Obrador’s “hugs not bullets” strategy of tackling the social roots of crime instead of confronting the cartels head-on” (The Guardian). 
Following the murder of American citizens, President Trump called on López Obrador to launch a “war” against the cartels. 
President López Obrador argued that the “clumsy militarized strategy attempted by his predecessors underpins the violence lacerating Mexico today”, but he is extremely keen on maintaining his relationship with Trump on good terms.
Why Latin America’s Discontent Should Not Blamed on Market-Friendly Policies
For defenders of free markets in Latin America, October was a discouraging month. 
In Chile, protests have raged against a proposed rise in fares on the Santiago metro, which escalated into rioting and then became a 1.2m-person march against inequality and inadequate public services. Sebastián Piñera, the center-right Chilean president, has taken action, removing cabinet members and promising reforms. 
Despite the current climate, Chile is still considered a success story. Since the end of the dictatorship in 1990, the country’s poverty rate has dropped from 40% to less than 10%, and inflation is consistently low and public finances are well managed (The Economist). 
Argentina elected Alberto Fernández, whose Peronist movement prefers a “muscular state to vigorous markets”, removing pro-business president, Mauricio Macri, after one term (The Economist). 
Argentina’s economy is in recession, inflation is over 50% and the poverty rate is over 35%. These issues were not caused by President Macri’s “neoliberalism”, however.
The Economist reports that, 
“Inheriting an economic mess in 2015, [Macri] made mistakes of tactics and timing, among them hesitation in cutting the fiscal deficit. But the underlying problems stem from decades of mismanagement, largely by Peronist governments, which have led to repeated defaults, currency crises and high inflation. Almost twice as rich as Chile in the 1970s, Argentina is now poorer. It would benefit from becoming more like its liberal neighbor.”
Meanwhile, the Chilean model, drawn up in the 1970s by economists trained at the University of Chicago, called for a small state and a big role for citizens in providing for their own welfare and education. Though this model has evolved in terms of giving more money for lower income citizens, Chileans still feel severely underserved by the state. 
Chileans “save for their own pensions, but many have not contributed long enough to provide for a tolerable retirement. Waiting times in the public health service are long. So people pay extra for care. Access to university has expanded, but students graduate with high debts, only to discover that the best jobs go to people with family connections”  (The Economist). 
President Piñera plans to create a new top income-tax bracket of 40%, which is five points higher than the current rate. Reform needs to go further, however. The Chilean population needs cheaper, faster health care and better education. The current tax system relies on VAT for nearly half of revenues—and although VAT is efficient, it is also regressive, so the state should take less or redistribute more.
Facing an economic crisis in Argentina, President Fernández, has a harder job. He will have to renegotiate debt once again, maintain a strict fiscal policy, and restore confidence in the peso. 
According to The Economist, he won’t be able to ease the pain by ramping up public spending. 
“It is already more than 40% of gdp, compared with 25% in Chile. In the long run, Argentina will need a smaller state and a more competitive private sector. While Mr Piñera fixes the Chilean model, Mr Fernández would do well to emulate it.”
Greenberg Traurig Expands Latin America Practice by Adding Mexico Firm
Greenberg Traurig has expanded its Latin America practice by adding a shareholder and four associates to its Mexico City office, as a growing number of independent firms in the region seek global partners.
These new additions expand Greenberg Traurig’s project finance capabilities, as the Mexican government continues to slash the federal budget and pushes ahead on ambitious infrastructure projects. As reported by Law.com, public-private partnerships could fill some of the anticipated financing gap.
“Rodrigo and his team bring a track record of experience in the areas of public-private partnerships and government financing that will be an asset to our clients,”  said José Raz Guzmán, co-chair of Greenberg Traurig’s Latin America practice and managing shareholder of the Mexico City office (Law.com). 
Severe Drought in Chile Threatens Honey Bee Population and $34B Chilean Food Industry
A decade-long drought in Chile is threatening honey bees in the central region of the country, subsequently posing a threat to the nation’s $34 billion food industry. 
The majority of the country’s over 985,400 beehives are located in central Chile, where an agricultural emergency has been declared by the government  in many regions due to extremely dry conditions. Agriculture Minister Antonio Walker said in September that 2019 was one of the driest years Chile had faced in six decades.
The drought, which was plagued Chile since 2010, continues to grow more extensive and intense in recent months. Although occasional dry spells are normal, officials say climate change has contributed to this specific drought’s severity and duration. 
As reported by Reuters, in September, rainfall in the central regions was at least 50% below the 1980-2010 average for the same month. This has led to a significant decline in flows in key rivers and less water in the area’s largest reservoirs.
Honey bees pollinate many of Chile’s export crops, such as avocados, blueberries, raspberries, apples, cherries, and almonds. The threat of a declining honey bee population also poses a threat to the nation’s $34 billion food industry, which is among the southern hemisphere’s largest.
As demonstrated in the graphic below, the U.N. Food and Agriculture Organizationfound Chile was already well short of the hives it needed to meet the demands of farmers. Honey exports, meanwhile, dropped by half last season, data shows.
Photo Courtesy of Reuters
Photo Courtesy of Reuters
Fighting Social Injustice Through Graffiti, and Making a Business of It
Camilo Fidel López, founder of graffiti artists crew Vértigo Graffiti, sees blank canvases for art the cause of social justice  in his home city of Bogotá, Colombia, and beyond. 
Photo Courtesy of The New York Times
Photo Courtesy of The New York Times
While he is not a graffiti artist himself, Mr. López plays multiple roles as art director, business manager, promoter, negotiator, lawyer, entrepreneur, festival producer, and tour guide. Additionally, he is a professor of entertainment law and cultural industries at the Jorge Tadeo Lozano University in Bogotá.
He has refused to give himself a job title.
“My job is to start conversations,” he told The New York Times
His most frequent references are to the Nobel Prize-winning Colombian author Gabriel García Márquez, whom Mr. López frequently refers to by his nickname, Gabo.
“This line from Gabo’s 2004 novella “Memories of My Melancholy Whores” defines my philosophy: ‘It is not true that people stop pursuing dreams because they grow old, they grow old because they stop pursuing dreams,” he said (The New York Times). 
“Before I moved here three years ago, I had the same misconception as many people — Colombia was a country of mustachioed coffee farmers and drug lords. Camilo opened my eyes to the new Colombia,” said Mark Bingle, the general manager of the Four Seasons Casa Medina in Bogotá, for which Mr. Lopez now leads graffiti tours.
Mr. Bingle continued to say that “going around, one sees that Bogotá’s walls are like a living, breathing museum of modern history.”
UBS and Credit Suisse Search for Brazilian Talent in Response to Surging Demand
Both UBS Group AG and Credit Suisse Group AG increased their Brazilian wealth management staff by more than 10% over the past year, and are on the hunt for more additions to their teams as demand surges for financial advice and new investment vehicles in Brazil. Additionally, Swiss money manager Pictet Group recently hired 10 people to cover Latin America from Zurich. 
“It’s a real tsunami… You see many investors leaving the comfort zone of short-term, fixed income and going into equities, hedge funds – in Brazil and globally,” Sylvia Coutinho, head of Latin America private banking for Zurich-based UBS, said in an interview (Gulf Times). 
Interest in serving wealthy Brazilians was already surging before last week’s approval of pension reforms that advocates say will help balance the budget. Record-low interest rates have spurred many investors to switch out of traditional Treasury bonds and savings accounts in favour of more exotic offerings.
As reported by Gulf Times, Brazil’s fund industry had net inflows of 205.7bn reais ($51bn) this year through September, almost three times the amount for the same period in 2018, according to Anbima, the capital markets association.
In 2017, UBS acquired Brazil’s biggest independent multifamily office, Consenso Investimentos. At the time, the combined operation had about 30 billion reais in wealth under management locally. 
“Clients today want proximity, so having a local presence is very important,” said UBS’s Coutinho, who’s also the firm’s CEO for Brazil.
Last year, UBS combined its two Latin America wealth management businesses into a single unit under Coutinho. 
In August 2018, Credit Suisse revamped its international wealth management division, creating seven divisions: including one Latin America-focused, and one focused solely on the Brazilian market. The bank expects the number of millionaires in Brazil to increase 23% by 2024, to 319,000.
“About $200 billion of wealth was brought into play in the past decade after governments in Argentina, Brazil, Colombia, Mexico and Chile allowed citizens to report undeclared assets held outside their home countries, imposing only minimal fines and adding new tax incentives. Most of the wealth declared – about $120bn – was from Argentines, followed by Brazilians, at roughly $50 billion” (Gulf Times). 
Unlike the case in Argentina, rich Brazilians tend to invest most of their liquid assets locally. Gulf Times reports that the private banking business in Brazil accounts for roughly 1.2 trillion reais in assets, an 11% increase since the end of 2018, according to Anbima.
Although Brazil’s economy continues to grow at a sluggish pace, the demand for wealth management services is increasing. Gross domestic product is expected to expand just 0.9% this year, according to estimates compiled by Bloomberg, less than the 1.1% rate in 2018 (Gulf Times).
“There are many positive factors, such as the approval of social security reform and economic growth, with less interference from the state and the private sector taking more initiative,” Coutinho said.
Carlos Slim Domit’s Prominence in Latin American Business
Carlos Slim Domit, son of Carlos Slim Helu (Mexican-Lebanese billionaire business magnate, engineer, investor, and philanthropist), has made a name for himself; standing out in Latin America as a brilliant businessman and a caring philanthropist. 
Slim Domit served as the Co-Chairman of the ICT Task Force at the B20 2012 . He also served as Co-Chair of the World Economic Forum (WEF) Latin America in 2015, which is a not-for-profit organization based in Cologny-Geneva, Switzerland.
The WEF is committed to “improving the state of the world by engaging business, political, academic, and other leaders of society to shape global, regional, and industry agendas” (The 961). 
Mr. Slim Domit currently serves as Chairman of the Board of America Movil, a Mexican telecommunications corporation headquartered in Mexico City, Mexico. America Movil is the seventh-largest mobile network operator in terms of equity subscribers and one of the largest corporations in the world, and a Forbes Global 2000 company.
Photo Courtesy of The 961
Photo Courtesy of The 961
He also serves as Chairman of the Board at Grupo Carso, a Mexican global conglomerate company owned by his father, and at Grupo Sanborns, a large restaurant, retail, pharmacy and department store chain located in Mexico, El Salvador, and Panama.
He holds a similar position at Telmex, a Mexican company that provides telecommunications products and services in Mexico, Argentina, Chile, Colombia, Brazil, Ecuador, Peru, Venezuela, and other countries across Latin America.
Brazilian Mobile Phone Insurance Provider Pitzi Hits $100M Valuation
With roughly one million customers across Brazil and a new round of funding, mobile phone insurance provider Pitzi has hit a $100 million valuation.
The size of its latest round, led by QED Investors, was undisclosed. Pitzi previously raised $20 million from investors, including Thrive Capital, Kaszek Ventures,  Flybridge and DCM. 
Founded in 2012, Pitzi serves as a reseller for insurance companies to offer products around mobile phone insurance across Brazil. The company’s mobile handset insurance offerings were a service that appeared in the right place at the right time, as low-cost handsets caused the market in Brazil to explode. 
“Today, only 4% of smartphones here are protected but we’re driving that towards 90% in the coming years and using those phones to unlock even more transformation in the space,” said Daniel Hatkoff, founder and CEO of Pitzi (Tech Crunch). 
For Platzi Founder Daniel Hatkoff, the cell phone serves as a gateway into other products and services in the insurance industry. Widespread cell phone adoption has demonstrated by the ways in which the device has successfully transformed many experiences for the emerging Brazilian middle class.
“The smartphone will be profoundly transformational in Brazil, allowing the emerging middle class to finally emerge and do things it never imagined possible,” said Hatkoff. “As market leaders, we at Pitzi are obsessed with unlocking the Brazilian consumer’s ability to use their phones in ever more powerful ways. Cell phone protection is just the beginning.”
The latest investment by QED Investors integrates Pitzi into the firm’s impressive pool of Latin American portfolio companies. Other Latin American investments include multibillion-dollar credit card startup Nubank, personal finance lender, Creditas, business lender Konfio, and rental financing platform Quinto Andar.
Bill Cilluffo, a former president of Capital One International and a general partner with QED, will take a seat on the company’s board of directors, according to a statement (Tech Crunch). 
Video: Google News Initiative’s 3 Goals in Latin America
INMA: Google News Initiative has 3 goals in Latin America
In this video, Arun Venkataraman of Google’s Global Partnership Solutions explains that the Google News Initiative was launched globally about a year and a half ago with the purpose of helping build a stronger future for journalism during this critical time for the news industry.
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