LATAM Fintech | 2021 #16
Hi, there! Welcome back to another LATAM Fintech Newsletter. In this newsletter, I cover all the major news related to LATAM Fintech. Thank you for subscribing!
If you are in Amsterdam this week for the Money2020 event, let’s get coffee.
Another great blog/newsletter from Aika Ussenova: Fintech in LatAm: Banking the Unbanked.
Latin America is a huge market - 650 million people with a median age of 31, with GDP per capita reaching $15k, on par with China and ahead of India at $5k.
For a number of different reasons LatAm startup ecosystem lagged behind other developing markets, but make no mistake, this giant is waking up. Almost a week doesn’t go by without new funding announcements. From TechCrunch:
“Latin America is on pace for all-time records in venture capital dollars raised and venture capital rounds in 2021. According to CB Insights data, startups in the region have already raised $9.3 billion in 2021’s first six months from 414 deals. The same data set indicates that in all of 2020, startups in the region raised $5.3 billion across 526 deals.”
👉 Read more here
NOW, ON TO THE SUMMARY OF THE LATEST NEWS IN LATAM
NEWS HIGHLIGHTS
The e-commerce giant Mercado Libre and the VC firm Kaszek Ventures announced that their SPAC (special purpose acquisition company), named Mercado Libre Kaszek Pioneer Corp., has filed to go public.
This SPAC is sponsored by both entities and will have an IPO. With this SPAC, Mercado Libre and Kaszek Ventures will seek to acquire a Latin American tech company in a period no longer than 24 months.
It is expected that BofA Securities, Goldman Sachs, Allen & Company, and JPMorgan will act as underwriters for the offering, which will consist of 25 million ordinary shares with an initial price of $10 USD each. The SPAC will be listed on Nasdaq as MEKA.
👉 Read more here.
INDUSTRY HIGHLIGHTS
⭐️ Nubank announced the launch of a platform that allows customers to schedule the payment of their recurring accounts in automatic debit and receive notifications in case of eventualities, such as lack of balance or increase in account value. Link here.
⭐️ Softbank announced the launch of the SoftBank Latin America Fund II, its second dedicated private investment fund focused on tech companies located in LatAm. SoftBank is launching the new fund with an initial $3 billion commitment. Link here.
⭐️ 500 Startups, the world renowned accelerator and venture capital firm, announced the launch of 500 Luchadores III, a $17 million Latin American fund where they plan to invest in 130 early stage companies over the next 2.5 years. Link here.
⭐️ 56 Best Startups in Mexico. Link here.
⭐️ Nuvei Corporation announced the acquisition of Paymentez LLC, a leading payment solution provider in Latin America. Link here.
BRAZIL
Nubank and Creditas announced a partnership that will bring Creditas products to Nubank customers in Brazil.
Also announced, Nubank will make an investment to expand Creditas' capacity to offer credit in Brazil.
In addition, the agreement allows Nubank to, during the next two years, become a minority shareholder of Creditas, with up to 7.7% of the company's shares.
👉 Read more here.
Open banking is revolutionizing the market and poised to transform Brazil's financial system, but in order to implement this system, there are a number of factors that Fintechs, banks and other financial institutions need to understand and adapt.
Armed with extensive experience in open banking initiatives in Europe and Asia, Axway, a leading enterprise integration provider, launched the "Axway Open Banking Program" in Brazil at the end of 2020.
Nine companies are currently participating in the pilot initiative, including Brazilian bank Tribanco.
Axway’s open banking solution is built on its Amplify API Management platform, with technology that combines various tools to perform the necessary integrations between different partners’ systems.
👉 Read more here.
A rash of “lightning kidnappings” in Brazil has forced the country’s central bank to restrict use of the Pix payment platform.
As the Financial Times reported that these kidnappings involve people being grabbed off the streets and held until they made a cash transfer for ransom.
While these types of crimes aren’t new in Brazil, the launch of the Pix system last year had led to their resurgence. In response, the BCB, the country’s central bank, has imposed limits on the 24/7 system.
👉 Read more here.
MEXICO
PagoNxt, the payments fintech run by Banco Santander, has acquired a 70% stake in Mexican technology firm Mercadotecnia, Ideas y Tecnología (MIT).
The deal forms part of PagoNxt’s plans to expand the use of its proprietary payments franchise, Getnet - PagoNxt Merchant Solutions, across Mexico and central America.
The firm says the deal will enhance Getnet to become the payments option with the greatest functionality in the region. MIT, founded in 2004, has more than 35,000 customers and 125,000 retail partners. It claims to process more than 31 million payments a month.
👉 Read more here.
COLOMBIA
Buy now, pay later is officially everywhere, and Latin America is no exception.
Today, one startup in the region, Addi, is announcing a $75 million extension to its Series B, bringing the total round size to $140 million.
In late May, the startup announced it had raised $35 million in an equity round led by Union Square’s Opportunity Fund, and $30 million in debt funding from Architect Capital.
The company, which has dual headquarters in Bogota, Colombia, and São Paulo, Brazil, declined to reveal its new valuation other than to say it is “nearly triple” what it was 90 days ago when it closed on the first tranche of its Series B, and that it is now in the “hundreds of millions” of dollars range.
👉 Read more here.
If you are a fintech startup and have over 100 questions send me an email, maybe I can answer a few.
This ends my weekly LATAM fintech newsletter. Thank you for reading to the end! If you liked it, I invite you to like, share and/or leave a comment below.
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Let me know if there are any questions or news/insights worth mentioning in next week's newsletter. Until the next!
Regards,
Marcel van Oost
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