Serial entrepreneur Brian Rickworth learned his lesson the hard way.
When they sold the Brazilian online real estate marketplace vivarial For $550 million a few years ago, he had to pay over $100 million in capital gains taxes due to early installation errors. It was a costly mistake, and he wants to help Latin American entrepreneurs avoid it with his new Latitude venture.
“Took I took the advice of a Silicon Valley man who told me, “You need a C corporation… that’s what we’re investing in,” Rickworth told gaming-updates. “The reality was, and I found out through a very costly mistake, that I ended up paying $100 million in capital gains tax to the US government because it was a US company even though we didn’t do any business there.”
The lesson stuck with him, and it became his personal mission to help warn others in the area not to do the same. Fast forward to the start of the pandemic in 2020; Requarth has teamed up with Gina Gotilf and Eurek, former VP of Development at Duolingo. Danilchenko, a former CTO of Brazilian startup Escale, has launched what he calls a “technology entrepreneurship program” in Latin America. The pandemic has only just begun, and during the lockdown, the trio have been able – individually – to advise entrepreneurs trying to navigate the new normal amid growing interest from global investors.
“Many told us that they were worried and worried that funding was drying up, while some had signs to fire people,” Rykwert recalls. “In the summer of 2020, I answered 150 Zoom calls and heard countless stories of great ideas from founders and great companies. But I realized that there is a huge gap in understanding the basics.”
And therefore latitude was born. Today, the company, which helps other startups get started and is funded in Latin America, is announcing its own funding round. Andreessen Horowitz (a16z) and NFX jointly led Latitude’s $11.5M seed funding round, which includes founders of Endeavor, Canary, FJ Labs, Ganas Ventures and Unicorn such as Nubank’s David Velez, Rapi’s Sebastian Mejia, Sebastian Mejia from Credits. Ann Williams was also included. dLocal co-founder Sergio Vogel, Creditus founder Sergio Furio, Bitso founder Daniel Vogel, Auth0 co-founder Matthias Wolowski and CornerShop co-founder Daniel Underraga, among others.
So far, Latitude has been focused on performance and community building, which goes a long way in LatM, an area where people often value relationships more than checks. Gothilf has stated that she wants to make her dissertation more specific as it progresses.
“The business of ambitious people in this area has grown a lot, but the infrastructure is a little outdated,” said Latitude CEO Reckworth. “The ecosystem is being stress tested and everything will collapse if no one builds highways to make things more efficient and possible for technology entrepreneurship.”
The founders of this field often still rely on manual processes.
With growing U.S. interest in the region, as evidenced by major funding investors, more people are starting businesses in Latin America than ever before. In 2021, VCs raised $14.8 billion through 772 deals in Latin America, according to PitchBook, more than the total investment in the region over the past six years.
“When American entrepreneurs start a venture capital-backed company, there is no friction like there is in Latin America,” Requart said. “Doing something cheap is efficient.”
Latitude aims to help entrepreneurs in the early stages of a start-up – company formation, with access to cross-border capital, competent management and mentorship from “full” operators and technology leaders. It all started with documenting the building process of Latitude.
“We found that it took about $30,000 to hire three different law firms to set up the right structure so we could bring in US venture capitalists,” Rickwart said. “It feels over the top, annoying and a waste of time.”
So the trio began planning what they were doing when launching Latitude and started building software for Latino entrepreneurs to automate the process.
Today, the company is building a “set” of software products, the first of which is Latitude Go, which aims to give any founder the ability to “smartly” build an enterprise that can be embraced by a global enterprise. At the touch of a button and at a price five times cheaper than today on the market.”
Dozens of companies use this software today, and Latitude aims to make it a record for every venture capital firm in Latin America.
He also created an educational program and curriculum called Latitude Fellowships taught by experienced operators from leading technology companies around the world. Latitude said the program has already attracted more than 800 entrepreneurs who have raised US$250 million for a total valuation of over US$1.5 billion.
The company also has a venture arm, Latitude Ventures, led by Thomas Rogio, which has invested in more than 80 companies, including Pomelo, BeeHub and Alinea.
A16z general partner Angela Strange has been investing in LatAmia personally and through her company for some time now. She was drawn to Latitude’s ability to create “a valuable builder community in Latin America” and “offer a unique and meaningful product that will speed time to market.”
NFX General Partner Pete Flint noted that he: Known for and worked with Rickworth for over a decade as he was one of Vivarial’s early investors and advisors.
“Since then, we have collaborated on several projects,” Flint told gaming-updates. “I think it will be his biggest ever.”
It’s also worth noting that both a16z and NFX will benefit from very early access to rising stars in the Latin American area that they wouldn’t have otherwise.
“Latin America has a huge opportunity right now, but many of the best solutions will fail due to bureaucratic issues,” Nubank’s Vélez said. “Latitude is building the infrastructure I dreamed of when I created Nubank.”
The startup claims that it has no official headquarters. Gotilf lives in So Paulo, in the Rykhart Bay area (with plans to move to Mexico for a year). The rest of the 25-man team is scattered across the US, Mexico, Colombia, Nicaragua, Uruguay, Panama, Argentina and Spain.
He plans to “aggressively lease” his new capital.
“We plan to become a SaaS/fintech company,” says Requart. “Our vision is to help an entrepreneur get all the necessary tools they need to start a business, set up a bank account and run a business. We in Latin America want to be the operating system for every enterprise startup.”
Meanwhile, Latitude is planning an April 5 event for “anyone who wants to learn more and has the opportunity to invest” in the startup.