LATAM Fintech | 2021 #19
ARTICLE
In one of my previous posts published on Latamfintech Hub, I said that the Mexican fintech landscape will boom in 2020 as a result of opportunity, investment and regulation.
Compared to Brazil, Mexico has a larger unbanked population, with just over 40% of adults with a bank account.
The good news is, that Mexico’s lower house of Congress approved a bill that regulates its fast-growing fintech sector, and it also included crowdfunding and cryptocurrency firms.
As a result, we saw a considerable increase in new FinTechs and more importantly, higher investments in existing FinTechs.
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REPORT
During the pandemic, Latin America became a hot market for tech startups, with foreign venture capital flooding the region.
Latin America now hosts 23 private “unicorn” companies — valued over $1 billion — according to Crunchbase. Overall, these companies have raised more than $15 billion. Roughly two-thirds of them are based in Brazil, but data indicates other countries are catching up.
VCs continue to funnel money into the region. Brazil and Mexico, the two largest markets in terms of population and economic activity, have shown the biggest uptick in startup funding.
NOW, ON TO THE SUMMARY OF THE LATEST NEWS IN LATAM
NEWS HIGHLIGHTS
French employee benefits fintech Swile has secured $200 million in a Series D funding round led by SoftBank.
Previous investors Eurazeo, Index Ventures and Bpifrance Large Venture also participated, along with newcomer Headline.
Michel Combes, chairman of Softbank International Group, will join Swile’s board of directors as part of the investment.
Founded in 2018, the start-up offers an all-in-one card that brings together employee benefits such as gift cards and meal vouchers as well as an app dedicated to employee engagement, with clients ranging from small businesses to the largest private company in France, Carrefour.
Swile has now set its sights on launching new digital-led products including an all-in-one payment solution that manages corporate benefits and an app that focuses on team building and employee analytics and insights.
The firm also intends to expand its footprint in Latin America, which began with the acquisition earlier this year of Brazilian start-up Vee Beneficios.
INDUSTRY HIGHLIGHTS
⭐️ Bradesco, Brazil’s third-largest bank, announced its purchase of a 49.99% stake in digital bank Digio for $113.2 million. Link here.
⭐️ Nelo, a startup founded by former Uber international growth team leads, began offering buy now, pay later services to Mexico earlier this year. Its ultimate goal is to expand to all of Latin America. Link here.
⭐️ Brazilian digital bank Nubank will have good results to presents to its investors ahead of its initial public offering (IPO) in New York. Link here.
⭐️ Brazilian digital banks face a decline in the number of users and feel the pressure for profitability. Link here.
⭐️ Dock, an innovator in financial technology infrastructure across Latin America, announced the acquisition of BPP, a payment institution regulated by the Central Bank of Brazil that specializes in Banking-as-a-Service (BaaS). Link here.
⭐️ Top 10 neobanks LATAM by customer count. Link here.
BRAZIL
Pismo, a Brazilian core banking and payments systems provider, has raised $108 million in Series B funding from Amazon, SoftBank, and Accel. Pismo plans rapid expansion in Europe, the US, and Asia. The round also included participation from Falabella Ventures, Headline, PruVen, and Redpoint eventures. Pismo is set to use its new cash to fund an expansion into new markets including the US, Europe, the UK, and Southeast Asia. Link here.
Cybersource, a Visa solution, and Ebanx, global payments fintech company that specializes in Latin America, announced a new partnership for payments in Brazil. From now on, Cybersource’s clients around the world will be able to access EBANX's payment solutions for Brazil, and offer their customers in the country the ability to pay online for products and services with local payment methods, including domestic debit cards, credit cards and installments. Link here.
PERU
Just last September, the Mexican platform Jüsto started operations in Brazil with an investment of 40 million dollars. Now, the startup that promises to become a unicorn is expanding its expansion in Latin America with the purchase of Freshmart, the main online supermarket in Peru.
Jüsto, the first 100% digital Mexican supermarket, was already a minority partner of Freshmart since its last capital raise. Link here.
MEXICO
DriveWealth, LLC, a pioneer in fractional investing and embedded finance, announced a partnership with Grupo Bursátil Mexicano (GBM), the leading investment platform and brokerage firm that is transforming the investing landscape with the mission of democratizing investing in Mexico.
Leveraging DriveWealth’s real-time fractional trading technology and API-based brokerage infrastructure, Mexican investors will gain affordable and expanded access to investing in U.S. equities. Link here.
Kavak, a mexican startup, provides an elegant solution to a glaring problem: how to buy a used vehicle in a market that is both one of the world’s biggest and its most informal second-hand car markets. Few buyers trust a seller’s assessment of the good’s quality.
Few sellers trust the buyer to cough up the money. Transactions often involve “meeting someone at a corner store and seeing how it goes”, says Alejandro Guerra, Kavak’s general manager in Mexico. Link here.
COLOMBIA
According to a report by the Inter-American Development Bank (IDB), in Colombia, in 2020, the number of fintech companies increased by 26%, compared to the previous year.
With this, the country became the third Latin American market for this type of startups, after Brazil and Mexico. In addition, it is projected to be one of the best market players worldwide.
One of the factors that has promoted the growth of the fintech industry in the country has been regulation and investor interest in creative and innovative projects, which contribute to improving services, user experience, financial inclusion and literacy in the region.
This is the case of FinZi, a Latin American fintech that seeks to revolutionize financial services by offering products to a segment that historically has not been prioritized by traditional banks: teenagers.
Although, FinZi will also work hand in hand with the parents of these new generations, their main target customer is teenagers between 10-17 years old. Link here.
If you are a fintech startup and have over 100 questions send me an email, maybe I can answer a few.