From Albo to Z: Navigating LatAm's Fintech Fin-Tide Wave
Discover the latest fintech trends in Latin America: from Albo's C series to banking transformation. Dive into the digital swell and surf the wave of financial innovations.
Welcome to our weekly newsletter covering the latest news and trends in the Latin American Fintech startup scene.
Albo raises USD$40 million in Series C investment round
The neobank Albo secured USD$40 million in a series C funding round, marking one of the latest investment rounds for startups in the Latin American region.
In a time of capital scarcity, financial technology companies in Latin America and Mexico continue gaining investors' recognition.
California-based venture capital firm Morpheus Ventures led the funding round. Also participating were Valar Ventures and Nazca Ventures, based in Mexico.
Their CEO and founder, Ángel Sahagún Fernández, stated that the goal was to reach a break-even point starting from next year.
Risk aversion in the investment markets has prompted fintech companies to swiftly steer towards profitability.
Vía Contxto
Quick News
The Superintendency of Industry and Commerce sets new rules for Colombian fintech
Colombia’s Superintendency of Industry and Commerce (SIC) has begun regulatory actions towards fintech in response to consumer complaints.
This decision comes after a series of complaints highlighting potentially harmful practices.
the SIC has set guidelines for those fintech companies that still need to be under the specific supervision of an administrative authority.
The complaints highlighted various issues: charging excessive interest, undisclosed fees, unauthorized disclosure of clients’ credit information, disbursing amounts less than approved, and including terms deemed abusive in contracts. (Contxto)
The Mexican fintech Baubap plans to reach 6 million users and launch savings products in 2025
Baubap, the renowned Multiple Purpose Financial Company (Sofom) from Mexico, has recently unveiled its short and medium-term growth vision in the financial sector.
Since November 2022, Baubap has been working with a substantial financing line amounting to USD $30 million.
The goal set for the following year is centered on expanding their services to a staggering 6 million users.
This translates to granting loans amounting to a total of MXN $12,000 million. (Contxto)
Investments in Fintech companies grow 183% in Argentina
According to the Report on Retail Payments by the Central Bank of the Argentine Republic (BCRA), between January and July 2023, balances invested through these platforms increased by 183%.
These virtual wallets offer investment accounts, allowing users to access their money at all times for payments or transfers while earning interest on the invested amount.
Various Fintech companies provide this service, ensuring their users an annual return of over 90% on the balances invested in Common Investment Funds (FCI), through the so-called investment or remunerated accounts.
Deposits from the private sector in traditional fixed-term deposits increased by 48%, from an average of ARS $8.03 trillion in January 2023 to ARS $11.93 trillion in July of this year. (Contxto)
Brazil dominates the cryptocurrency market in Latin America
The Brazilian market is one of the largest in Latin America for investing or buying cryptocurrencies.
According to a report from blockchain platform Chainalysis, Brazil currently ranks ninth worldwide in adopting digital assets.
Argentina ranks 15th in this ranking, followed by Mexico, according to the Geography of Cryptocurrency survey.
Brazilians have been using cryptocurrencies as a form of investment, making that market more sophisticated than neighboring countries, according to Chainalysis.(Contxto)
Payface buys SmileGo to boost biometric payments
Payface, the Santa Catarina-based startup leader in payments with facial biometrics in Brazil, has closed the acquisition of its competitor, SmileGo.
Payment through facial recognition is a reality and a success in countries like China, where up to a third of purchases are made using this technology.
SmileGo specializes in biometric payments with white-label cards marketed by retail chains.
In the last three years, Payface has created a network of 1,500 point-of-sale locations to enable facial biometric payments in physical retail (serving, for example, the São Paulo-based chain St. Marche, in partnership with Mastercard. (Contxto)
Chile reached 300 financial technology companies according to the Finnovista Fintech Radar 2023
Santiago de Chile positioned itself as the mecca of financial innovation in Latin America, thanks to the unveiling of the Finnovista Fintech Radar Chile 2023, an event co-hosted with Visa.
The report presented shed revealing data, highlighting that fintechs in Chile have experienced exponential growth, with an annual rise of 29.5% since 2021, reaching 300 companies.
Over half of these startups focus on payments, remittances, financial management, and lending.
This recent collaboration between corporations, startups, and critical players showcases the transformative potential when forces unite to reshape the financial landscape. (Contxto)
Nu México requests a license from the CNBV to operate as a bank
Nu México has emerged as one of the most prominent financial institutions in the country, experiencing consistent growth over the past four years since its arrival.
Nu México it has taken the initiative to officially request authorization from the National Banking and Securities Commission (CNBV) to become a bank.
Nu México’s strategy aims to expand its offering of products and benefits, both for its customers and investments.
This includes the possibility of offering payroll portability and higher deposit limits. (Contxto)
Airwallex strengthens its presence in Latin America with the acquisition of MexPago
Airwallex, a leading global financial company, has agreed to acquire MexPago, a firm based in Mexico.
This move is a clear intention of Airwallex to establish a strong presence in the burgeoning Latin American market.
The fintech industry has shown a growing interest in Latin America, driven by its predominantly young population and increased online transactions with rivals like PayPal, Stripe, and Block. Airwallex benefits by charging fees for each transaction made.
Airwallex’s CEO, Jack Zhang, mentioned that Mexico is a strategic point, especially given the current geopolitical and economic uncertainty between the United States and China. (Contxto)
Banking transformation in Latin America: the convergence of technology and customer experience
The financial landscape is profoundly transforming, driven by a technological revolution that has redesigned the relationship between this sector and other areas.
Frog, a leading design and strategy consultancy, has studied how these transformations redefine the client experience in bank branches.
The emergence and consolidation of fintechs and other tech companies have established a distinct paradigm regarding client experience. A prime example is Nubank, whose Net Promoter Score in 2019 was +90, overshadowing the Mexican financial sector average of 32.
Regarding Latin America, according to a study by the Inter-American Development Bank (IDB) and Finnovista, the region has seen exponential growth in the fintech sector, with standout countries like Brazil, Mexico, Colombia, Chile, and Argentina. (Contxto)
Fintech Education
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Food for Thought
Check out the intervention of Pablo Sprenger, CEO of Sura Investments, in his talk Investment Opportunities in Latin America: Innovation, Fintech and Trends.
Jobs
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