Poor financial services, huge unbanked population and high mobile app usage create the perfect environment for fintech adoption. Many new financial services users in LatAm are fintech natives. Teens and young adults represent 52% of the entire population, who are being rapidly onboarded onto fintech platforms, many having never used "traditional" banking. 40 million people in LatAm were banked between just May-September 2020 with online banking.
Government support and fintech-friendly regulation is also levelling the playing field for newer players. In 2018, Mexico created a framework for fintech companies (“Ley Fintech”) to compete with traditional financial institutions on regulatory requirements. Brazil approved its Open Banking project in 2019 and the first phase went live in early 2021, other countries, such as Peru and Argentina, are on their way too.
The fintech startup and venture scene is unsurprisingly booming. Funding has already reached nearly $6B invested in 2021, up almost 3x since last year and 24x since 2016, global investors are piling in to back the new successes in the region, more than 1,600 fintech startups are active in the region.
🇺🇸 Blockchain-based lending platform Celsius Network has extended its Series B from $400M to $750M. 🇮🇳 Slice raised a $220B Series B at a $1B valuation from Tiger Global, Insight Partners and Advent. It offers credit cards for tech-savvy young professionals in the country. Almost one billion Indians have a bank account, but most are not covered by the outdated credit scoring system and cannot access loans or credit. Slice is changing this with its own underwriting.
🇬🇧 Cloud-native core banking startup Thought Machine has raised a $200M Series C at a $1B valuation. Good time to check out our "Core banking: banks' defence against the fintech threat?". 🇬🇧 SME challenger bank Allica Bank has closed a £110m Series B. Allica is taking on the mainstream ‘high street’ banking market for established, growing SMEs instead of focusing on specialist lending markets or secondary payment accounts like many other challenger banks. It is projecting profitability by mid-2022. Binance in talks with sovereign wealth funds as it seeks investments (FT). Binance has a daily transaction volume of $170B, has billions of revenues and is profitable. Some estimate a possible company valuation in the range of $200-300B which would make it the 2nd most valuable private startup in the world after Bytedance (TikTok owner). Binance is looking at investments from sovereign wealth funds to tighten relationships with governments and set up a company headquarter.
Other notable fintech deals from around the globe: 🇧🇷 TruePay, a B2B BNPL startup, raised a $32B Series A led by Addition. The one-year-old startup has seen a 100-200% growth month-over-month and aims to streamline the commercial relationship between merchants and their suppliers.
🇲🇽 Jefa raises $2M to offer digital accounts for women in LATAM. In addition to this funding round, the startup has also signed a multi-year partnership with Visa.
🇩🇪 Alternative investments app Timeless Investments raised €12M from EQT. It uses NFTs to allow users to buy shares in exclusive assets such as rare sneakers, watches & luxury cars for as little as €50.
🇺🇸 NFT music platform Royal raised a $55M Series A from z16z, Coinbase Ventures, Paradigm, Nas and The Chainsmokers. Royal is allowing users to purchase shares of songs then earn royalties on the music they’ve invested. Music is one of the most exciting unlocks for NFTs.
Other notable fintech deals from around the globe:
🇲🇽 Mastercard acquired Arcus to expand support for real-time payments in Latin America. Arcus is a platform that enables any business to launch and offer innovative payment solutions across Latin America.
🇬🇧 Revolut acquired Nobly ePOS to expand its offering to serve the restaurant and hospitality sectors. Revolut mission is to offer a one-stop shop solution for merchants of every kind to manage their finances and run their businesses from a single platform..
Tip of the week
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