Contxto – The world announced two new unicorns into the ecosystem just this week, and both have a distinctly Latin American flavor.
One is Orca Bio, a clinical-stage biotechnology company developing high precision allogeneic cell therapies, which announced that it had scored Series D financing with US$192 million. The round was co-led by Lightspeed Venture Partners and an undisclosed investor.
The other new unicorn is remote work management firm, TransparentBusiness, founded and is chaired by Argentine businesswoman, Silvina Moschini. It has become a unicorn after raising a round worth more than US$20 million. They are now planning an IPO by 2021.
Don’t pop the corks just yet, Latin America
The sad truth is, you won’t see these companies on our Latin American Unicorns list. This is because, in spite of their Latam roots, in truth both Orca and TransparentBusiness must be considered US companies.
Yet, the reason they’re worth covering in a Latam-focused medium like Contxto is to heed the warnings and trends that can be seen in the rise of the US-based, Latin American-founded scaleup. Let’s call them Latinx companies.
On one side, there are commonalities between these Latinx unicorns and their Latin American cousins.
Indeed, the two latest billion-dollar-plus companies with roots in the Southern Cone illustrate the dual approach one can take to becoming a member of the three comma club. They both play an interesting balancing act between their adopted country, their countries of origin, and a freewheeling globalized attitude.
Yet, exiting the Latam ecosystem and integrating into the US’s isn’t as simple as just being in the richest and most developed economy in the world. It is often linked to complex push and pull factors that are well worth exploring.
The New Model T by Orca
Orca follows in the silent footsteps of the likes of Wildlife Studios, the Brazilian company that shocked the world in 2019 on becoming the continent’s first and only videogames unicorn.
Similarly, Orca—being a biotech—was founded in 2016 and did not start making waves until its disruptive effects became apparent. You could see it as the market declaring its confidence in a truly revolutionary solution.
Wildlife rode the gaming wave way before the sector was considered a “serious” part of the media landscape. (Weird for how long this infantilization of the videogame industry survived with the sector being worth US$159.3 billion globally with double-digit growth.)
Conversely, few people would have such prejudices about Orca Bio and its solution. Usually when we talk about disruption we’re thinking about economics. Meanwhile, Orca is out there literally trying to cure cancer with its Orca-T solution.
The company does this by creating precisely controlled cell therapies by building each dose cell-by-cell from another person’s blood. Each therapy is constructed by formulating a proprietary mixture of cells that aims to cure the patient’s disease and eliminate dangerous side effects.
When the cure became primising, suddenly it started catching the spotlight from big investors, including Bill Gates, bringing its total investment to a sum of US$300 million.
Better building in the United States?
Orca’s co-Founder is a globetrotter who spent years in Chile and even set up quite a legacy in the country. He co-founded two research centers, one at the Federico Santa María University and the other at the Catholic University of Valparaíso.
Yet, Orca insisted to Contxto:
“Note that Orca Bio is a US based startup with HQ in California.”
This insistence is probably linked as much to the company’s biography, as it is to the beneficial legal, regulatory, and research implications of being based in the US and in California specifically.
“The company’s proprietary therapeutic and manufacturing platforms are exclusively licensed from Stanford University.”
Argentina’s “Miss Internet” moves to the US
Meanwhile, TransparentBusiness looks to be following closely in that Latinx unicorn par excellence’s footsteps, Duolingo.
They are both scaleups with Latam roots and a primordially Latam market-base, yet firmly established in the US. Both are now unicorns and both are now eyeing an IPO.
The monetary and financial incentives to being US-based are thus made clear. But, there is an interesting point to be made about a company like TransparentBusiness’ interest in keeping a toe in Latin America.
The first is knowledge of the market. The fact that Moschini’s company focuses on remote work, naturally allows her to maintain close links with her home region. They’ve set up shop from places like the Founder’s native Argentina to Venezuela.
The second has its motivations in social impact. The company is the “first pink unicorn to ‘hack’ VCs’ financing against statistics.” Indeed, just 0.4 percent of venture capital funds are earmarked for startups led by Latin American women. Moschini’s headquarters may be in the US but part of her heart is back home in Latam.