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The M&A Watch: IT Services and Software in Latin America – August 2021

By Carolina D'Alencon | August 31, 2021


Our monthly M&A Watch spotlights deals in the Information Technology industry throughout Latin America.

Capital flowing into Latin America is accelerating as investors have increasingly focused on the region due to the growing digital economy, talented workforce, and nearshore capabilities. During 2021, the start-up ecosystem has attracted investors who are enticed by the maturing market and high returns in the region. It is no coincidence that foreign investment has doubled year-over-year. Capital invested in the Latin Amercian region year to date August 2021 already exceeds the total amount invested in the six years from 2021 to 2018, per Pitchbook. During 2021, $8.8b was invested in Latin American businesses, an increase of a 114.63% compared to 2020.

There are numerous deals in the region, with acquisitions coming from international players, as well as local companies. Although Brazil leads the chart in terms of deal activity in the IT & Software industry, there is steady traction in places like Colombia, Chile, and Costa Rica. The most active sectors remain E-commerce, FinTech, and IT & Software Consulting Services. As the world faces a shortage of IT-related talent, many companies are looking abroad to fill the gap in resources. Latin America is rich in IT workers and has started to cultivate its labor force through EdTech initiatives like Digital House and Wizeline Academy. Latin America has become an increasingly attractive hub for many companies looking to utilize nearshore services, and amid the COVID-19 pandemic, the pool of talent became global.

​​​​​​According to a report on the M&A space in Latin America released by Mergermarket, U.S. bidders were particularly interested in the LATAM landscape, with interest coming from both strategic and financial investors. The Latin American M&A value in 2021 has already surpassed the 2020 full-year value, registering US$67b in the first half of the year. Among these numbers, Brazil accounts for $50b in M&A activity. There are at least 7 deals worth more than $2b, and an increase in the number of tech deals compared to 2020. Private Equity investors have been particularly active in Latin America, in line with the global trend of PE funds having record levels of dry powder to invest. $9b of PE investment poured into the space in the first half of this year which is more than 1.5x the full-year 2020 amount.

Unsurprisingly, there were many deals to choose from in the LATAM region. When looking at the landscape, we can see interest coming from investors across the globe and expect the activity to continue throughout the year.

Mercado Libre Meli Fund Acquires Kangu

Kangu, an online logistic platform for shipping services and online stores was acquired by MercadoLibre, a leading e-commerce player in Latin America. Kangu’s strategy is to use brick and mortar stores as delivery centers and offer e-commerce companies the avenue to engage in transactions with clients across Latin America. Kangu has a collection of 5,000 delivery points in Brazil, where its headquarters are located, as well as in Colombia, and Mexico.

MercadoLibre is Latin America’s leader in the E-commerce space. To improve its delivery process and face the current disruptions caused by the pandemic, MercadoLibre is looking to extend investments across its logistics network. MercadoLibre seeks to become the fastest player in the E-commerce space in LATAM, and the acquisition with Kangu is an important step in achieving its vision. More details.

BRQ Solucoes em Informatica Acquires BMSIX

BMSIX, an IT Consulting provider headquartered in Brazil, was acquired by BRQ Solucoes em Informatica for an undisclosed sum. BMSIX offers services in the IT space including critical IT operations support, cloud computing, cost optimization, and software development. The main industries of focus are Retail and Financial Services. Through its capabilities and human resources, BMSIX can meet complex projects from conception, and help clients in their structuring, migration, and operation to cloud environments.

BRQ Solucoes em Informatica offers IT services in Brazil such as custom application development, products, and digital channels and manages infrastructure and processes for its customers. The horizontal acquisition will help BRQ strengthen its cloud and mobile projects and grow its presence across North America. More details.

Nuvini Acquires Mercos

Mercos, an online platform intended to leverage the power of accessibility offered by the online environment, was acquired by Nuvini for an undisclosed sum. Brazil-headquartered Mercos is a software the helps brands navigate the process of selling online, with tools that automate the process.

Nuvini is a SaaS B2B holding company founded in 2020. Its strategy for the following years is to extend through acquisitions, planning to complete 15 deals by the end of the year. Among its recent transactions is Dataminer, a big data analytics company. More details.

QuintoAndar Acquires ATTA Franchising

ATTA Franchising, a company located in Brazil and involved in the PropTech industry, was acquired by Brazilian unicorn QuintoAndar. ATTA is simplifying the access to mortgage loans and rental guarantees. The company is working with real estate agents and independent brokers to simplify the property financing processes and local guarantees.

QuintoAndar is one of Brazil’s powerhouses in the Real Estate landscape. The company offers long-term residential rentals. The company raised $420m of Series E venture funding in a deal led by Tencent Holdings, Greenoaks Capital Partners, and Ribbit Capital on August 18, 2021, putting the company’s pre-money valuation at $4.68b. More details.Pagero, Via its Financial Sponsor Summa Equity, Acquires Gosocket

Gosocket, an operator of an online B2B marketplace platform in the FinTech space, was acquired by Pagero for an undisclosed sum. Gosocket simplifies invoice discounting by allowing users to synchronize their invoices and manage documents within a single platform. An additional tool of the platform is its data analytics center, where information is aggregated into various reports used to better inform businesses. Gosocket is headquartered in Chile, but conducts operations across Latin America, with a strong regional support system offered as a n added value to its services.

Pagero is another player in the FinTech space with headquarters in Sweden and offices in the United States. The company offers a network platform intended to digitalize and automate financial processes. Pagero’s service set includes purchase-to-pay, order-to-cash, and logistic-to-pay processes that enable customers to achieve accurate data with minimal error handling. The company received growth capital of SEK 100m from Summa Equity back in 2017 with the purpose of expending at a global scale. The acquisition of Gosocket will strengthen Pagero’s services of AR and AP e-invoicing compliance. More details.

10Pearls Acquires Proximity Costa Rica

Proximity, provider of custom software development and project management services, was acquired by 10Pearls for an undisclosed amount at the beginning of August.  Proximity offers nearshore technology solutions to clients in the United States and Canada. The company is headquartered in Costa Rica. Its main capabilities include software development, maintenance, testing services, digital marketing, and DBA high-end services. The service-package bundled with the highly trained employees help clients reduce costs and time to market.

10Pearls specializes in enterprise software development services, mobile applications, and products outsourcing, as well as IT support and security solutions among other services. The company is headquartered in the United Sates, and the acquisition of Proximity will help extend its presence in Latin America, as well as its nearshore capabilities and technology solutions in the region. More details.

Torre Acquires Travail

Travail, a job search service headquartered in Colombia was acquired by Torre for an undisclosed amount at the beginning of August. Travail is an online platform designed to create hourly jobs in operational positions in the Hospitality and Gastronomic industry. The marketplace for labor helps candidates create a profile where they can disclose skillset and work experience, and simultaneously offer employers the capability to filter candidates based on needs. Travail also assists in the interview process and background check of the potential employees.

Torre is an operator of professional network intended to fill the talent gap across the world by connecting clients with talent from Latin America. The platform offers flexibility for in the job search and humanizes the recruitment steps. At the begging of April, Torre raised $10m of seed funding from Emma Group, Velvet Sea Ventures, and SIMMA Capital. The funds were used in the acquisition of Travil with the purpose of extending in Latin America and other international settings. Torre is headquartered in the United States.

About 7 Mile Advisors

7MA provides specialized Investment Banking & Advisory Services to the professional service firms in the Consumer Products & Retail industries. We help our clients determine the right strategic partners for their businesses, transition ownership, raise capital, grow through acquisitions, and evaluate new markets. We advise our clients on M&A and private capital transactions, and provide unique market insights. Our team brings experience and energy to all of our engagements, with a focus on helping our clients navigate a changing marketplace.

To learn more about how 7 Mile Advisors can help you evaluate and execute on strategic M&A or private capital alternatives for your business, please visit our website


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