Kaszek Ventures eyes more Latam digital assets after Bitso, Nubank

Kaszek Ventures, one of Latin America’s most active venture capital firms, recently invested in an unnamed DeFi and crypto banking solutions company and is eyeing more digital asset investments.

Managing director Hernan Kazah, also a co-founder, didn’t disclose the amount invested but said the company, which isn’t ready to go public with the funding that closed about a year ago, is a DeFi bet that focuses on international transaction solutions through crypto for remittances or savings in different currencies.

It’s part of Kaszek’s deeper move into the digital asset space. The venture capital firm’s fourth early-stage fund invested in Bitso, a Mexican crypto exchange founded in 2014 that has since expanded to Brazil, where it has 1 million customers. Its fifth early-stage fund has already made investments in Colombian digital asset-focused Minka and Argentina’s Exactly Finance.

“That portfolio is still in the making, I’m sure we’re going to add at least one or two more” digital asset-focused investments," Kaszek said in an interview. “When we go to fund six, the digital asset ecosystem will be more developed and we’ll be doing more things.”

Latin America is ripe for disruption with gaps around financial inclusion being targeted by tech companies of all kinds. VC investment in blockchain and crypto companies reached $653 million in 2021, up from $68 million in 2020, according to The Association for Private Capital Investment in Latin America, a non-profit organization. Other venture capitalists targeting the region include General Atlantic and SoftBank.

In total, some $16 billion in capital venture funding was invested in the region’s startups last year, compared to $4 billion in 2020, according to CB Insights. That record won’t be reached again this year, but funding has already surpassed $4 billion for 2022, Kazah said.

Kaszek, which has raised $2 billion, has been a leading investor in tech-related companies since its founding in 2011.

Kaszek invested $3 million last year in Exactly, a startup building an open-source, non-custodial credit protocol on the Ethereum platform. Exactly is betting on the Ethereum Merge coming up next month to lower costs, and plans to offer fixed income and variable income solutions.