LatAm Fintechs: Attractive investments for venture capital

A study showed that the 1 166 Latin American Fintechs raised over $ 800 million from venture capital. Mexico and Brazil are the leaders of the region.

This year has been exceptional for Latin American fintechs. Some companies began their international expansion, such as Nubank, the Brazilian digital bank that has started operations in Argentina, Mexico, and Colombia. Other startups received global venture capital investment, as is the case of the Brazilian company Creditas, which was one of the companies blessed by the Japanese corporate Softbank.

Latin American fintechs became an attractive sector for investment, according to Latin America: Global Investors’ New Fintech Frontier study co-authored by Finnovista and LendIT, two agencies dedicated to promoting the industry. These startups carry mass financial services to markets unattended by the leading banks in the region, showing constant growth in an area that, until a few years ago, was exclusive to a few players.

Mexico and Brazil are the two countries that have stood out in this promising landscape for the financial technology sector. Despite being regions where the unbanked population abounds, it has consumers quite familiar with the digital world.

Investors have seen the promise of the fintech panorama in Latin America. These startups have been able to receive both venture capital, private equity, and corporate venture financing from early stages. The opportunities have been opened both for the founders and for the founders of these companies that have shown results that Latin America can highlight in technological innovation.

The study by Finnovista and LendIT explores the perspective of global investors who have opted for Latin American fintech, a faith that has translated into $ 800 million in venture capital for the 1,168 startups that existed in 2018

As an example of this interest, Rebel, one of the startup’s sponsors of the Finnosummit event, raised $ 10 million in a new round of financing, which includes Monashees and FinTech Collective and will allow them to continue offering accessible credits.

The incubators, accelerators, and venture capital of American origin were the ones that contributed the most capital to the region, being the sub-industry of payment methods, the one that attracted the most money. For example, PayPal invested $ 750 million to MercadoLibre, betting on the MercadoPago e-commerce payment system.

This interest of foreign capital for Latin American fintechs was present at the FINNOSUMMIT Miami, where more than fifty international investors gathered to learn about the opportunities offered by the region within the Fintech sector.

Adolfo Babatz, CEO of Clip, said that the needs of many entrepreneurs in Latin America are halfway between the seed and escalation stages. Marcelo Lima, Monashees partner, highlighted the growing interest in B2B2C solutions. Fabrice Serfati, of Ignia, pointed to the dynamism and internationalization of the funds: “60% of our investments take place outside of Mexico.”