Fintech

H Twenty Capital aims to be ‘go-to fund for pre-seed investments’ in Latin America

Comment

H Twenty Capital, H20
Image Credits: H Twenty Capital / H Twenty Capital's founding team, from left, Stevon Darling, Daniel Lloreda and Mauricio Porras

Venture capital continues to flow into Latin America at a staggering rate. Just over $15 billion went into startups in 2021, according to LAVCA. That was three times more than the association recorded in fiscal year 2019.

Brazil and Mexico continue to lead as regions where many startups are getting funding, but as LAVCA’s statistics show, some of that investor love is being spread around to other countries like Colombia, Argentina and Chile. Venture firms in those countries are also raising funds; for example, this month, Colombia-based Marathon Ventures announced its first fund of $26 million.

H Twenty Capital (H20) co-founders Daniel Lloreda and Mauricio Porras recall getting into the region in 2018, a time Lloreda considered pretty early to be the investment space.

“The market wasn’t so established and meal companies, such as Rappi, were just getting started and reaching their growth phase,” Lloreda added. “Mauricio and I had this bold vision of backing as many disruptive entrepreneurs as we could, and leveraging our previous backgrounds and experiences.”

In 2018, the pair set up a friends and family fund that had about $15 million that Lloreda referred to as “proof of concept fund” that enabled them to invest in the region and establish the thesis of backing pre-seed and seed entrepreneurs in Latin America and in the Hispanic U.S. market in the verticals of e-commerce, marketplaces, fintech and software.

Some of H20’s early investments from that fund went into companies like Tül, a construction material e-commerce marketplace that is now valued at $800 million after raising a $181 million Series B round in January. It also invested in Brazilian social grocery commerce company Favo, which raised a $26.5 million Series A last October.

For Tül in particular, Lloreda said he and Porras were instrumental in helping the company expand regionally, secure its first country manager in Ecuador and make key strategic partnership introductions to suppliers and investors.

The firm strategically went after a seed and pre-seed market that Lloreda said is going downstream. As a result, the firm is positioned to provide what the entrepreneurs need, and with SoftBank and other growth equity funds coming into the region, it has opened up an opportunity to start investing at the Series A level.

“When we first started doing pre-seed and seed, it was out of necessity,” Porras added. “We were not the biggest or the most seasoned fund, but were emerging managers. We understood that if we wanted to get into the best deals, we needed to come in early and be super aggressive with the value-added support. We honestly had to earn our pricing table.”

H20 is now armed with its second fund, of which they say is poised to reach $65 million. The firm already closed on $50 million toward that goal.

The fund is supported by G Squared Management Co.; Scott Shleifer, co-founder and partner of Tiger Global Management; Sebastián Mejía, co-founder and president of Rappi; Fabián Gómez, co-founder and CEO of Frubana; Roger Laughlin, co-founder of Kavak; and founders of iFood and Mercê do Bairro.

H20 is also backed by board or advisor members, including Laughlin; Stevon Darling, who led the VC team in LatAm for the IFC and is the chief investment officer of H20; Javier Villamizar, operating partner of SoftBank Vision Fund; and Ricardo Martínez Finger, co-founder of Jüsto supermarket.

Eight investments have already been made from the second fund, including into hiring and payments startup OnTop, which raised $20 million in Series A funding led by Tiger and SoftBank.

“We work very closely with Tiger so we’ve become the go-to fund for pre-seed investments in Latin America,” Lloreda said. “The reason why Tiger invested in H20 is because we have identified these early talents in companies, and we’re now working very closely to co-invest with them in the region. We have been very good at not only investing, but bringing the best access to investors and advisors and establishing an operating framework around how H20 adds value — from talent acquisition to go-to-market planning to fundraising connections to strategic partnerships.”

VCs say there are more startup opportunities to chase in Latin America

Why Latin American venture capital is breaking records this year

More TechCrunch

The global spend management sector is experiencing a tailwind of sorts. North America is arguably the biggest market in this space, but spend management companies have seen demand rise across…

Spend management startup SiFi raises $10M to grow further in Saudi Arabia

Neural Concept lets designers model how components will perform before they can be manufactured.

Swiss startup Neural Concept raises $27M to cut EV design time to 18 months

The StrictlyVC roadtrip continues! Coming off of sold-out events in London, Los Angeles, and San Francisco, we’re heading to Washington, D.C. for a cozy-vc-packed, evening at the Woolly Mammoth Theatre…

Don’t miss StrictlyVC in DC next week

X will now allow users to post consensually produced NSFW content as long as it is prominently labeled as such.

X tweaks rules to formally allow adult content

Ashby consolidates existing talent acquisition tools and leans heavily on AI to automate the more repetitive steps in the recruitment pipeline.

Ashby injects recruiting with a dose of AI

Spotify has announced it’s hiking subscriptions for customers in the U.S., the second such price increase in the space of a year. The music-streaming giant reports that premium pricing will…

Spotify to increase premium pricing in the US to $11.99 per month

Monzo has announced its 2024 financial results, revealing its first full-year pre-tax profit. The company also confirmed that it’s in the early stages of expanding into the broader European market…

UK neobank Monzo reports first full (pre-tax) profit, prepares for EU expansion with Dublin hub

Featured Article

Inside Apple’s efforts to build a better recycling robot

Last week, TechCrunch paid a visit to Apple’s Austin, Texas manufacturing facilities. Since 2013, the company has built its Mac Pro desktop about 20 minutes north of downtown. The 400,000 square foot facility sits in a maze of industry parks, a quick trip south from the company’s in-progress corporate campus. In recent years, the capital…

4 hours ago
Inside Apple’s efforts to build a better recycling robot

Early attempts at making dedicated hardware to house artificial intelligence smarts have been criticized as, well, a bit rubbish. But here’s an AI gadget-in-the-making that’s all about rubbish, literally: Finnish…

Binit is bringing AI to trash

Temasek has previously invested in Lenskart, and this new funding follows a $500 million investment by the Abu Dhabi Investment Authority last year.

Temasek, Fidelity buy $200M stake in Lenskart at $5B valuation

Less than one year after its iOS launch, French startup ten ten has gone viral with a walkie talkie app that allows teens to send voice messages to their close…

French startup ten ten reinvents the walkie-talkie

Featured Article

Unicorn-rich VC Wesley Chan owes his success to a Craigslist job washing lab beakers

While all of Wesley Chan’s success has been well-documented over the years, his personal journey…not so much. Chan spoke to TechCrunch about the ways his life impacts how he invests in startups.

21 hours ago
Unicorn-rich VC Wesley Chan owes his success to a Craigslist job washing lab beakers

Presumptive Republican presidential nominee Donald Trump now has an account on the short-form video app that he once tried to ban. Trump’s TikTok account, which launched on Saturday night, features…

Trump takes off on TikTok

With fewer than 400,000 inhabitants, Iceland receives more than its fair share of tourists — and of venture capital.

Iceland’s startup scene is all about making the most of the country’s resources

Kobo put out a handful of new e-readers a few weeks back: color versions of the excellent Libra 2 and Clara, as well as an updated monochrome version of the…

Kobo’s new e-readers are a sidegrade most can skip (with one exception)

In an interview at his home near Reykjavík, the entrepreneur-turned-VC shared thoughts on his ventures and the journey that led him from Unity to climate tech, a homecoming of sorts.

Unity co-founder David Helgason’s next act: Gaming the climate crisis

Welcome back to TechCrunch’s Week in Review — TechCrunch’s newsletter recapping the week’s biggest news. Want it in your inbox every Saturday? Sign up here. Over the past eight years,…

Fisker collapsed under the weight of its founder’s promises

What is AI? We’ve put together this non-technical guide to give anyone a fighting chance to understand how and why today’s AI works.

WTF is AI?

President Joe Biden has vetoed H.J.Res. 109, a congressional resolution that would have overturned the Securities and Exchange Commission’s current approach to banks and crypto. Specifically, the resolution targeted the…

President Biden vetoes crypto custody bill

Featured Article

Industries may be ready for humanoid robots, but are the robots ready for them?

How large a role humanoids will play in that ecosystem is, perhaps, the biggest question on everyone’s mind at the moment.

2 days ago
Industries may be ready for humanoid robots, but are the robots ready for them?

VCs are clamoring to invest in hot AI companies, and willing to pay exorbitant share prices for coveted spots on their cap tables. Even so, most aren’t able to get…

VCs are selling shares of hot AI companies like Anthropic and xAI to small investors in a wild SPV market

The fashion industry has a huge problem: Despite many returned items being unworn or undamaged, a lot, if not the majority, end up in the trash. An estimated 9.5 billion…

Deal Dive: How (Re)vive grew 10x last year by helping retailers recycle and sell returned items

Tumblr officially shut down “Tips,” an opt-in feature where creators could receive one-time payments from their followers.  As of today, the tipping icon has automatically disappeared from all posts and…

You can no longer use Tumblr’s tipping feature 

Generative AI improvements are increasingly being made through data curation and collection — not architectural — improvements. Big Tech has an advantage.

AI training data has a price tag that only Big Tech can afford

Keeping up with an industry as fast-moving as AI is a tall order. So until an AI can do it for you, here’s a handy roundup of recent stories in the world…

This Week in AI: Can we (and could we ever) trust OpenAI?

Jasper Health, a cancer care platform startup, laid off a substantial part of its workforce, TechCrunch has learned.

General Catalyst-backed Jasper Health lays off staff

Featured Article

Live Nation confirms Ticketmaster was hacked, says personal information stolen in data breach

Live Nation says its Ticketmaster subsidiary was hacked. A hacker claims to be selling 560 million customer records.

3 days ago
Live Nation confirms Ticketmaster was hacked, says personal information stolen in data breach

Featured Article

Inside EV startup Fisker’s collapse: how the company crumbled under its founders’ whims

An autonomous pod. A solid-state battery-powered sports car. An electric pickup truck. A convertible grand tourer EV with up to 600 miles of range. A “fully connected mobility device” for young urban innovators to be built by Foxconn and priced under $30,000. The next Popemobile. Over the past eight years, famed vehicle designer Henrik Fisker…

3 days ago
Inside EV startup Fisker’s collapse: how the company crumbled under its founders’ whims

Late Friday afternoon, a time window companies usually reserve for unflattering disclosures, AI startup Hugging Face said that its security team earlier this week detected “unauthorized access” to Spaces, Hugging…

Hugging Face says it detected ‘unauthorized access’ to its AI model hosting platform

Featured Article

Hacked, leaked, exposed: Why you should never use stalkerware apps

Using stalkerware is creepy, unethical, potentially illegal, and puts your data and that of your loved ones in danger.

3 days ago
Hacked, leaked, exposed: Why you should never use stalkerware apps