a16z, NFX support Latitud’s effort to become ‘the operating system for all venture-backed companies in LatAm’ – TechCrunch

Serial entrepreneur Brian Requarth learned his lesson the hard way.

When he sold the Brazilian online real estate market vivareal for $550 million several years ago, it had to pay more than $100 million in capital gains taxes due to incorporation errors made early on. It was a costly mistake, and he wants to help Latin American entrepreneurs avoid it with his new company, Latitud.

“I I took the advice of someone in Silicon Valley who told me, ‘You need a C corp…that’s what we invest in,’” Requarth told TechCrunch. “The reality was, and I learned this through a very costly mistake, that I ended up paying $100 million in capital gains taxes to the US government because it was a corporation in the US even though it was not we had no activity there.”

The lesson stuck with him and he became something of a personal mission to help warn others in the region not to do the same. Fast forward to the start of the pandemic in 2020; Requarth teamed up with former DuoLingo VP of Growth Gina Gotthilf and Yuri Danilchenko, former CTO of Brazilian startup Escale, to found what they describe as a “tech entrepreneurship program” in Latin America. The pandemic had just begun, and while in quarantine, the trio found themselves in the position, separately, to advise entrepreneurs trying to navigate the new normal amid a surge in global investor interest.

“Many called us concerned and scared that funds were running out, while some had boards telling them to lay people off,” recalls Requarth. “I ended up getting 150 Zoom calls in the summer of 2020 and hearing countless stories of great ideas and amazing businesses from founders. But I realized that there was a big gap in understanding basic things.”

And then Latitude was born. Today, the company, which is in the business of helping other startups get off the ground and get financed in Latin America, announces its own funding round. Andreessen Horowitz (a16z) and NFX co-led Latitud’s $11.5 million seed round, which also included participation from Endeavor, Canary, FJ Labs, Ganas Ventures, and unicorn founders David Vélez of Nubank, Sebastián Mejía of Rappi, Ann Williams, COO of Creditas, dLocal co-founder Sergio Fogel, Creditas founder Sergio Furio, Bitso founder Daniel Vogel, Auth0 co-founder Matias Woloski, and Cornershop co-founder Daniel Undurraga, among others.

Started so far, Latitud has focused on execution and community building, which in Latin America, a region where people often value relationships as much as paychecks, goes a long way. He also wanted to make his thesis even more convincing when it came up, Gotthilf noted.

“There has been a massive growth of ambitious people building businesses in the region, but the infrastructure is a bit outdated,” said Requarth, who is the CEO of Latitud. “The ecosystem is being put under stress tests and the whole thing will come crashing down if someone doesn’t build superhighways to make things more efficient and possible for tech entrepreneurship.”

Founders in the region still often rely on manual processes.

Additionally, with growing interest in the region coming from the US, as evidenced by the lead investors in this funding, more people than ever are starting companies in Latin America. According to tone Book, Venture-backed companies raised $14.8 billion in 772 deals in Latin America in 2021, more than the total capital invested in the region in the previous six years combined.

“If entrepreneurs in the US are starting a company backed by companies, the friction is not like in Latin America,” Requarth said. “It’s cheap to do things, it’s efficient.”

Latitude aims to help entrepreneurs from the earliest stages of a startup: with company formation, access to cross-border capital, cap table management, and access to advice from “competent” tech leaders and operators. He began by documenting the process to create Latitude.

“We found that it cost about $30,000 to hire three different law firms to create the right structure for us to attract venture capital from the US,” Requarth said. “I find it excessive, annoying and a waste of time.”

So the trio started mapping everything they were doing while starting Latitud and built software to automate that process for entrepreneurs in Latin America.

Today, the company is building a “suite” of software products, the first being Latitude Go, which aims to enable any founder to “smartly” onboard a venture-backed company ready for global scale “just by doing click of a button and at a price five times less expensive than what exists on the market today.”

Dozens of companies are using that software today, and Latitud’s goal is to make it the system of record for all venture-backed companies in Latin America.

It has also created an educational program and curriculum called Latitude Fellowships that are taught by accomplished traders at top tech companies around the world. The program has already attracted more than 800 entrepreneurs who have raised $250 million with a total valuation of more than $1.5 billion collectively, Latitude boasts.

The company also has a venture division, Latitud Ventures, led by Tomas Roggio, which has invested in more than 80 companies, including Pomelo, BHub and Alinea.

Angela Strange, General Partner of A16z, personally and through her firm, has been investing in LatAm for some time. She was attracted to Latitud’s ability to build “a valuable community of builders in Latin America” ​​and its “unique and significant product offering that will speed time to market.”

NFX general partner Pete Flint said he has I have known and worked with Requarth for over a decade as he was one of VivaReal’s early investors and advisors.

“We have worked together on various projects since then,” Flint told TechCrunch. “I think this is going to be the best one yet.”

It is also notable that both a16z and NFX will benefit from gaining very early access to rising stars in the Latin American region that they otherwise would not have had.

“There are huge opportunities in Latin America right now, but many great solutions will fail due to bureaucratic sticking points,” Nubank’s Vélez said. “Latitud is building the infrastructure that I wish I had when I started Nubank.”

The startup itself claims to have no official headquarters. Gotthilf lives in São Paulo and Requarth is in the Bay Area (with plans to move to Mexico for a year). The rest of his team of 25 people is distributed in the US, Mexico, Colombia, Nicaragua, Uruguay, Panama, Argentina and Spain.

He plans to “hire aggressively” with his new capital.

“Our plan is to become a SaaS/fintech company,” Requarth said. “Our vision is to help an entrepreneur start a business, create a bank account and get all the essential tools he needs to run a business. We want to become the operating system for all company-backed startups in LatAm.”

For its part, Latitude plans to hold an event on April 5 “for anyone who wants to learn more and also have the opportunity to invest” in the startup.

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