Latin America has emerged as a leader in fintech investments in recent years. With its underbanked population and antiquated banking system, the region presents a unique opportunity for Fintech Latam Investments to tap into the growing fintech industry.
In 2021, Latin American fintech companies raised a record $14 billion, with 187 startups leveraging technology to offer financial products and services, according to CB Insights. While funding has taken a hit in 2022 due to the market downturn, year-to-date deal activity has already exceeded 2020 levels.
The Growth of Fintech in Latin America
The COVID-19 pandemic has accelerated digital adoption and increased demand for financial products in Latin America, with 10.8 million people making their first online purchase during lockdowns, according to KPMG.
Regulatory policies and fintechs targeting underserved markets have also contributed to industry growth, with small businesses being a major target for digital payment solutions.
Brazil and Mexico are at the forefront of fintech growth in Latin America, with underbanked populations, urbanization, and younger demographics driving growth, according to SVB.
The talent pool is expanding, and the ecosystem is attracting international investors. SVB has even launched a $30 million debt fund for growth-stage tech companies in the region.
Recomended Lecture: Venture Capital in Latam Fintech Startups
Importance of Fintech Investments in Latin America
Fintech investments in Latin America not only provide investors with an opportunity to tap into a growing market but also have a significant impact on the region’s economy.
The increased availability of financial products and services can help to reduce poverty, increase financial inclusion, and stimulate economic growth. As fintech continues to grow in Latin America, it is expected to play an increasingly important role in the region’s economy.
Recomended Lecture: Fintech driving Financial Inclusion in Latin America
In the next section, we will take a closer look at the current state of fintech investments in Latin America.
Current State of Fintech Investments in Latin America
The fintech industry in Latin America has experienced tremendous growth in recent years, attracting significant investment from both local and international investors. In this section, we will take a closer look at the current state of fintech investments in the region.
Funding Raised by Fintech Companies
According to CB Insights, Latin American fintech companies raised a record $14 billion in 2021.
However, funding has taken a hit in 2022 due to the market downturn. Despite this, year-to-date deal activity has already exceeded 2020 levels.
Types of Fintech Companies Receiving Funding
Fintech companies targeting underserved markets, such as small businesses and the underbanked, are receiving the most funding in Latin America.
Digital payment solutions, lending platforms, fintech infrastructure, and personal finance management tools are among the most popular fintech products and services in the region.
Recomended Lecture: Why Fintech in Latam?
Impact of the COVID-19 Pandemic
The COVID-19 pandemic has had a significant impact on the fintech industry in Latin America, accelerating digital adoption and increasing demand for financial products. According to KPMG, 10.8 million people made their first online purchase during lockdowns.
The pandemic has also led to an increase in regulatory policies and fintechs targeting underserved markets.
Fintech Companies by Country
Brazil and Mexico are leading the way in fintech investments in Latin America. According to SVB, these countries have underbanked populations, urbanization, and younger demographics driving growth.
However, other countries in the region, such as Colombia, Argentina, and Chile, are also experiencing significant growth in the fintech industry.
In the next section, we will take a closer look at the emerging markets in Latin America for fintech investments.
Emerging Markets in Latin America for Fintech Investments
Latin America presents a unique opportunity for investors looking to tap into the growing fintech industry. In this section, we will take a closer look at the emerging markets in Latin America for fintech investments.
Fintech Landscape in Brazil
Brazil is one of the largest fintech markets in Latin America, attracting significant investment from both local and international investors. According to CB Insights, fintech companies in Brazil raised $4.1 billion in 2021.
The underbanked population, urbanization, and younger demographics are driving growth in the fintech industry in Brazil.
Digital payment solutions, lending platforms, and personal finance management tools are among the most popular fintech products and services in the country.
Fintech Landscape in Mexico
Mexico is another emerging market for fintech investments in Latin America. According to SVB, Mexico’s fintech industry is growing due to its underbanked population, urbanization, and younger demographics.
Digital payment solutions, lending platforms, and personal finance management tools are also popular in Mexico. In 2022, Klar raised $70 million in a round led by General Atlantic, valuing the company at around $500 million, according to TechCrunch.
Potential for Fintech Growth in Other Latin American Countries
While Brazil and Mexico are leading the way in fintech investments in Latin America, other countries in the region are also experiencing significant growth in the industry. Colombia, Argentina, and Chile are among the emerging markets for fintech investments in the region.
According to Investment in LATAM Startups – Q1 2023 Report the high percentage of unbanked or underbanked individuals in the region presents a unique opportunity for venture capital investment in the industry.
In the next section, we will take a closer look at the key players in Latin American fintech investments.
The Latin American Fintech Investments of the Future
Local and foreign investors are making significant investments in Latin America’s fintech sector. The key players in Latin American fintech investments will be examined in greater detail in this section.
The General Atlantic is the name of the region.
Global growth equity firm General Atlantic has made investments in a number of startups in Latin American fintech. For the Mexican fintech startup Klar, the company raised $70 million in 2022. Klar was valued at about $500 million during the funding round, according to TechCrunch.
The SoftBank
Japanese multinational firm SoftBank has made a number of investments in startups in Latin American fintech. For Brazilian fintech startup Banco Inter, the company participated in a $231 million funding round in 2019. Several other Latin American fintech startups, including Creditas and Clip, have also been invested by SoftBank.
Investors in QED
A venture capital firm with a focus on fintech, QED Investors, has invested in a number of startups in Latin America. Nubank and GuiaBolso are just two of the fintech startups that the firm has invested in. QED Investors is one of Latin American fintech investors, according to CB Insights.
Kaszek Ventures
A venture capital firm called Kaszek Ventures focuses on funding Latin American technology startups. Nubank, Creditas, and Kushki are just a few of the startups in Latin American fintech that the firm has invested in.
One of the most active investors in Latin American fintech, according to techCrunch, is Kaszek Ventures. The future of fintech investments in Latin America will be examined more closely in the following section.
Recomended Lecture: Fintech Trends in Latin America in 2023
Future of Fintech Investments in Latin America
The future of fintech investments in Latin America looks promising, with the industry expected to continue its growth trajectory in the coming years. In this section, we will take a closer look at the trends and developments that are shaping the future of fintech investments in the region.
1. Increasing Adoption of Web3 Technologies
The adoption of web3 technologies, such as blockchain and cryptocurrencies, is expected to increase in Latin America. According to Newtopia, the adoption of intelligent payment methods and web3 technologies presents a unique opportunity for venture capital investment in the region.
Recomended Lecture: How Fintechs are benefitted by Cryptocurrencies and Blockchain
2. Regulatory Changes
Governments and regulators in Latin America are adapting to keep up with innovation in the fintech industry. According to KPMG, regulatory policies have contributed to industry growth, with fintechs targeting underserved markets.
However, regulatory changes can also pose challenges for fintech startups, as they may face stricter licensing requirements and increased compliance costs.
3. Increasing Talent Pool
The talent pool in Latin America is expanding, with more people pursuing careers in the technology and fintech industries.
According to SVB, the younger demographics in the region are driving growth in the fintech industry, with more people seeking jobs in the technology sector.
4. International Investment
The fintech industry in Latin America is attracting significant investment from international investors. According to CB Insights, the majority of funding in Latin American fintech startups in 2021 came from international investors.
This trend is expected to continue in the coming years, as more international investors look to tap into the growing fintech market in the region.
The Future of Fintech Latam Investments in 2023
With significant investment from both local and international investors, Latin America is emerging as a leader in the fintech sector globally.
In this article, we have examined the emerging markets for fintech investments in the region, the significant players in Latin American fincech investments, and the trends and developments that will influence the future of fintec investments in that region.
In the next section, we will summarize the key takeaways from this article.
Fintech Latam Investments: Key Takeaways
- Brazil and Mexico are setting the standard for fintech investments in Latin America, but other nations in the region, like Colombia, Argentina, and Chile, are also seeing significant growth in the sector.
- Some of the significant players in Latin American fintech investments include General Atlantic, SoftBank, QED Investors, and Kaszek Ventures.
- The trends and developments that will influence the future of fintech investments in Latin America include the adoption of web3 technologies, regulatory changes, an expanding talent pool, and international investment.
We sincerely hope that this comprehensive guide to fintech Latam investments in 2023 has given you insightful information about the expanding fincech industry in the region.
Fintech Companies Latam
UbankU
Defi bank focus on improving the financial inclusion for the GenZ. Financial industry doesn’t know anything about Genz and there´s a 2.5B billion market worldwide.
Ubanku, starts being the first step of the financial life for them, with a frictionless marketplace that can save money with a cashback of products and services of the university life, access to micro loans, all this, while they learn about finance, this allow us to create an innovating score system to connect GenZ with other financial products.
Creditop
Creditop is a loan aggregator that processes any credit request by centralizing lenders and connecting customers with their ideal loan.
We have disbursed +$7.5M in mortgages, car and personal loans with a profitable pricing model in each transaction.
Our mission is to improve life quality through credit efficiency in LatAm. Founders:
INI
Ini, a SaaS and white label fintech platform that allows any -wannabe fintech-company to scale their own payment network and expand their ecosystem into new markets and territories without losing the core focus of their businesses even when there is no connectivity access.
Inipay ́s IP tech (POS terminals + alternative connectivity) is also an enabler to reach new markets and niches such as events, concerts, stadiums, national parks, tourism and hospitality.
Aviva
Aviva is an AI startup following a unique approach to unsecured and productive credit for the underserved communities in Mexico.
Now imagine you are an unbanked person and all that you need to do for getting your first loan is having a face-time call. They have a great experience building Konfio (Mexican Unicorn). Founders:
Koban
A digital financial services platform for Bolivia, Paraguay, Ecuador and Peru; where the vast majority don’t have access to financial services or are drastically underserved by traditional banks.
Koban allows users to perform an array of financial services including online and offline payments, money transfers, budgeting tools and credit solutions, among other services for consumers and SMBs in the region.
Zenpli is an infrastructure focused SaaS working on putting a stop to the KYC and fraud challenge in LatAm.
Through 1-single integration, LatAm fintechs and other digital innovators seamlessly onboard more good customers by accessing best-in-class data across all domains and running accurate end-to-end identity decisions supported by advanced models that are hard to spoof.
We’re rolling our product with Mastercard in Mexico in Q4 2022 with the potential to generate ~500k in ARR over the next 12-months.
We’re backed by The Fintech Fund, Ralicap, Amador, Newtopia and world-class angels and advisors from C-level and VPs at Socure, EPAM, Konfío, R2 and Bureau.id.
Kashin
Kashin (YC S22) is Square with working capital for micro-merchants in LATAM.
We control risk with collaborative credit scoring and our vision is to become the primary financial platform for the masses.
Before Kashin, the founders led Cabify, the largest regional Uber competitor, and grew it from 0 to $50m in annual revenue.
Wibond
Buy now, pay later without credit cards.
WIBOND is a digital payment method to pay in small installments and without the need of a credit card.
It shows the best payment options according to each customer’s possibilities so they can enjoy their favorite products.
Tapi
Tapi is a Fintech B2B. Next-generation API-first network for billers, partners and their clients to re-envision the way bills get paid in LATAM.
Z1
Z1 is the Brazilian Gen Z neobank, where teenagers and young adults can begin their journey to financial independence.
Through Z1’s banking app, users can send and receive money from parents, employers or clients from their side gigs, as well as spend the money through a physical and virtual card.
Botin
BOTIN is an investment super app and a one stop shop to trade traditional and non-traditional assets; its vision is to make the wealth generation tools of the 1% available to all.
Through its Neo broker stock trading app gives users a simple and direct access to invest in different assets across multiple industries and territories (e.g., ETFs and stocks from USA, real estate, crypto, tokens, and others).
BOTIN is focused in helping 300 million people in Spanish speaking Latin America to protect their savings and have an option for retirement.
Yuno
YUNO wants to bring to Latin American companies an easy online checkout solution that solves the pain point of managing multiple payment methods, as well as fraud detection tools, which can be costly and painful to manage.
Fintech Latam Investments FAQ
Who are the key players in fintech Latam investments?
A.SVB, General Atlantic, SoftBank, QED Investors, and Kaszek Ventures.
What are the emerging markets for fintech investments in Latam?
Brazil and Mexico are leading the way, but other countries are also growing.
How is the fintech industry in Latam expected to grow?
The adoption of web3 technologies, regulatory changes, increasing talent pool, and international investment.
Who is investing in Latin American fintech startups?
International investors are investing in Latin American fintech startups.
What challenges do fintech startups face in Latam?
Fintech startups may face stricter licensing requirements and increased compliance costs.
How is the talent pool in Latam expanding?
The younger demographics in the region are driving growth in the fintech industry.
Objection: Is it safe to invest in Latam fintech startups?
Yes, the fintech industry in Latam is attracting significant investment from both local and international investors, with many successful startups already established.
