Subscribe to the Crunchbase Daily
RD Station, which is focused on SMBs in emerging markets, claims the round marks the largest funding round raised by a Latin American company in the SaaS (software-as-a-service) space.
TPG Growth, DGF Investimentos, RedPoint Eventures, Astella Investimentos, and Endeavor Catalyst also participated in the round. The new financing brings RD Station’s total venture raised to about $90 million, according to CEO and co-founder Eric Santos. It last round was a $19.2 million Series C led by TPG Growth in 2016.
Founded in 2011, RD Station has more than 700 employees (compared to about 500-550 people at this time last year) and 13,000 customers in 20 countries. Its headquarters (and the majority of its staff) are in Florianópolis, located in the southern part of Brazil, but the company also has offices in Sao Paulo, Bogota, Mexico City, and San Francisco.
“Most SaaS companies in the world ignore the SMBs, especially in emerging markets, due to difficulties with economics,” Santos said. RD Station has worked to be able to provide an AI and machine learning-driven solution that is “affordable” for smaller businesses yet can still help them “grow in a predictable and sustainable manner.”
While the company declined to disclose its annual recurring revenue (ARR), Santos said it has “basically grown [its ARR] by triple digits on average year-over-year in the last four years,” with the exception of last year.
“Of course as you grow, it gets harder to produce triple digit increases,” Santos points
In a phone conversation today, Santos told me that the company plans to use the money in part to continue its expansion in Colombia and Mexico. It also plans to invest in R&D to improve its product and naturally, as do most just-funded companies, grow its headcount. Last year, the company acquired another startup, Plug CRM, so that it could incorporate a CRM product into its platform. The startup now has two products: RD Station Marketing and RD Station CRM. It also works with about 100 other SaaS companies which integrate RD Station’s product, Santos said.
“Over the years we have become the leading marketing automation vendor in Brazil by far,” Santos said. “And we believe that we have a very differentiated competitive advantage in a market like Brazil want to replicate that in other emerging markets.”
It seems that investors like what they see.
In a press release, Joaquim Lima, the Sao Paulo-based managing director of Riverwood Capital, said his firm believes RD Station “has enormous growth potential” both in Brazil and globally.
The deal is the latest in a number of Latin American-focused investments for Riverwood Capital. In April, we covered the news that the firm was the sole investor in a $20 million Series B raised by another Brazilian SaaS and SMB-focused startup, Omie. It’s also previously backed Brazilian ride-sharing startup 99 and Mandic, among others.
Latin America, as a whole, is increasingly attracting global investors. This deal is just the latest example of a growing trend in the global VC market. Just last month, Silicon Valley venture firm TCV confirmed it led a $400 million round for Brazilian fintech startup Nubank, marking that firm’s first “significant” investment in Latin America.
Brazil is by far the largest recipient of funding in the region, according to LAVCA, the Association for Private Capital Investment in Latin America, which found that venture funding in the country exploded in 2018 to $1.3 billion, representing nearly two-thirds of all venture money raised in Latin America as a whole last year. That was 52 percent more than the $859 million invested in 2017, and a staggering 369 percent increase from the $279 million raised in 2016.
Featured Photo of Eric Santos provided by RD Station
Illustration: Li-Anne Dias
Stay up to date with recent funding rounds, acquisitions, and more with the Crunchbase Daily.