FinSights LatAm: The Digital Gold Rush & The New Players in Financial Innovation
Find out who's who in the cryptocurrency market that is transforming Latin America's financial landscape. Plus, discover pioneering financial technology startups like Alza and more.
Welcome to our weekly newsletter covering the latest news and trends in the Latin American Fintech startup scene.
Game of Coins: Who is Who in the Cryptocurrency Market in LatAm?
Since the emergence of Bitcoin in 2008, cryptocurrencies have constantly evolved. Latin America has begun to experience its own “digital gold rush,” reflected in a 40% increase in cryptocurrency investments between July 2021 and June 2022, reaching an amount of USD $562 billion, according to the Latin American and Caribbean Economic System (SELA), as stated here.
Countries like El Salvador have adopted Bitcoin as legal tender, while Mexico is exploring ways to do the same. But to better understand this phenomenon, analyzing the context in which these digital currencies emerge is essential. For example, Dogecoin, created in 2013 by Billy Markus and Jackson Palmer as a parody, has gained ground and media attention, opening a window to the universe of cryptocurrencies in the region.
Vía Contxto
Quick News
Alza raised USD $6.6 million to benefit Latinos in the U.S.
Mexican Arturo Villanueva, who worked for more than four years in the United States with the financial partnerships team at Stripe, founded the fintech company Alza, which raised USD $6.6 million in an investment round led by Thrive Capital of New York.
In this round, angel investors Henrique Dubugras, co-founder and CEO of Brex, BoxGroup, Sebastián Mejía, co-founder and president of Rappi, Cristina Cordova, COO of Linear, and Sarah Heck, former advisor to the White House under President Obama and head of entrepreneurship at Stripe, participated.
Alza was created to provide financial services to all Latin American migrants who came to the United States to work and who, due to their status, do not have access to such services in the country. (Contxto)
Ebanx announces seventh edition of Payments Summit in Sao Paulo
Brazilian unicorn Ebanx will hold the seventh edition of its Payments Summit, to be held in the city of Sao Paulo, Brazil, from September 18 to 20.
This year's business event will bring together experts from around the world to discuss recent developments and forecast trends that will shape the digital economy and payments landscape of the future.
Growth markets such as Africa and Latin America will be at the center of these discussions.
The group of keynote speakers will bring together high-level executives from institutions and companies such as Microsoft, Uber, Sony, Canva, Ozow, Mastercard, the Central Bank of Brazil, Banorte, and Itaú Unibanco, which is also the event's partner for this year. (Tekiosmag)
Konfío Shuts Down Gestionix to Strengthen Focus on Financial Services for SMEs
Konfío, a leading player in Mexican fintech, announces the closure of Gestionix, its ERP software subsidiary. The move aims to strengthen its financial services offering to SMEs in a rapidly expanding fintech market.
The decision aligns with the company’s goal to focus its resources on bolstering its financial services offerings for small and medium-sized enterprises (SMEs) in Mexico.
Before Gestionix, the company acquired Astro in December 2019 and, more recently, Sr.Pago in August 2021. These acquisitions are part of a broader strategy to consolidate its presence in the Mexican fintech ecosystem.
Founded in 2013 by David Arana and Francisco Padilla, Konfío has benefited from investments from firms such as Tarsadia Capital, QED Investors, Softbank, among others, and focuses on providing quick online loans to SMEs using advanced technology, alternative data sources, artificial intelligence, and data science. (Contxto)
Payroll Lending Fintech Konsi prepares to close its first investment round in Brazil
The payroll loans market represents around 33% of the volume of credit with free resources for individuals in Brazil. Of the total balance of R$610.2 billion in payroll loans, R$568.7 billion (or 93.2%) are for INSS beneficiaries and civil servants.
By registering through the Konsi app, civil servants can consult all their payroll contracts, the payroll margin (the percentage of income that can be committed to paying off the loan) and the opportunities available at different financial institutions.
In operation for around one year and eight months, the fintech founded in Salvador (BA) works as a public payroll comparator.
The fintech currently has agreements with 16 banks, including large ones such as Bradesco, Banco do Brasil, Itaú, and Santander, and strong players in the modality such as Bmg, Daycoval, and Safra. (Latamfintech)
Food delivery and Fintech: fastest growing industries in Latin America
Kushki and Statista collaborated to develop research on the Latin American business landscape in five key industries: Fintech, Food Delivery, Tourism, Shared Mobility and Retail.
According to the study, the food delivery industry is accelerating, with 24% year-on-year growth by 2023.
Colombia shows significant results in multiple areas, with digital payments leading the region in 2023, with revenues exceeding USD $14.65 billion. (American Retail)
N5 raises Series A round of financing
During his career at the bank, he held leadership positions in several Latin American countries and at the bank's headquarters in Spain, and during his tenure was responsible for areas such as products and corporate customer service. All this occurred before leaving the bank with a new business in mind aimed at addressing what he identified as one of the main opportunities in the segment he knows so well: using software in financial operations.
The amount was not disclosed.
The round was led by Illuminate Capital, a venture capital firm whose limited partners include some of the world's largest financial institutions, such as J.P. Morgan, Citi, Barclays, BNY Mellon, S&P Global, and Jefferies. (BloombergLínea)
Paymentology and Nelo partner to facilitate in-person payments in Mexico
Paymentology, a global leader in card issuance and payment processing, announced today its strategic partnership with Nelo, an emerging consumer payment platform in Mexico.
The collaboration will include support for Nelo’s Mastercard for in-person payments through the ‘Google Wallet’ and the launch of physical cards.
Nelo, with more than 6 million online purchases made through its platform, aims to reinvent credit services in Mexico.
The alliance with Paymentology gives Nelo access to a fast and scalable infrastructure solution (Contxto)
Latin American payments industry to reach US$ 179 billion in revenues by 2027
BCG's Global Payments 2023 report notes that the expansion of this sector is likely to slow globally, estimating a compound annual growth rate (CAGR) of 6.2% through 2027.
Payments industry revenue volume grew by 8.3% between 2017 and 2022, reaching USD $ 1.6 trillion.
In Latin America, revenues in the payments sector increased at a compound annual growth rate (CAGR) of 12% between 2017 and 2022, reaching a value of US$120 billion. (América Economía)
Cartel insurance demand rises across LATAM region
Chaucer, a global specialty insurance group, has reported a surge in demand for insurance against cartel-related violence, especially in the LATAM region.
The outbreak of concern follows an uptick in high-profile incidents across nations such as Mexico, Guatemala, Honduras, and El Salvador.
This ‘organized crime cover’ adds to its Strikes, Riots, and Civil Commotion (SRCC) policy, safeguarding against physical damages caused by cartels.
In recent years, organized crime has risen significantly as a threat for businesses across the region, culminating in a cartel-led arson attack on 25 OXXO stores in Western Mexico last year. ( Fintech Global)
Fintech Education
University of Hong Kong: Blockchain and FinTech: Basics, Applications, and Limitations. Understand the design rationale of blockchain technology and its emerging platforms and applications and uncover the limitations and opportunities enabled by blockchain applications, particularly as they relate to finance.
The University of Texas at Austin: Fintech: AI & Machine Learning in the Financial Industry. This is the third in a series of courses on financial technology, also called Fintech. This course provides an overview of machine learning applications in finance.
FinTech for Finance and Business Leaders. The practical skills needed to understand and implement adequate cyber security, machine learning using Python and robotic processes, and intelligent automation in the finance function.
Food for Thought
Tax issues for Fintech and cryptocurrencies
Explore the fundamental tax issues for fintech and cryptocurrencies at the "DIA FINTECH 2023: Digital Finance and Technology Summit". Watch this special talk on "Tax issues for Fintech and cryptocurrencies" with Erik Estrada, Tax Partner at Ja del Río.
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