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The future of finance in LatAm & the Caribbean

December 05, 2021

Capital rounds: Chilean insurtech, Betterfly and Nubank announce major acquisitions this week

Sep 24, 2021

By Antony Pinedo
nubank

#FridayBriefing: Armed with new rounds of capital, two fintechs made major acquisitions this week.

Chile’s Betterfly swoops on startups 

Chilean insurtech Betterfly bought six startups to accelerate its expansion in the region: Chile’s Kunder, Heypay!, Nesto, ProSueños and Racional; and Brazil’s Xerpa.

The deals follow a US$60-million capital raising in June with the participation of large funds such as Softbank and QED Investors.

The purchases will allow the company to diversify into other verticals such as financial software development or savings and investment. Betterfly will double its number of employees to almost 400 this year and aims to have 100 million families as clients by 2025.

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Nubank buys Mexican micro lender

Nubank announced its third acquisition this month—the purchase of Mexican microfinance lender Akala. With the purchase of a regulated entity, the firm expands in traditional banking activities and will be able to offer - for the first time - savings products in the Mexican market.

“I believe the typical banking model—debit and credit—is the one that will end up permeating fintechs,” said Miguel López, senior partner at Addem Capital, a private debt fund.

Acquisitions are a pillar of Nubank’s growth strategy. This month alone the neobank announced the purchase of e-commerce instant payment platform Spin-Pay and the acquisition of up to 7.7% of Creditas shares by 2023.

  • The moves by Betterfly and Nubank are part of a trend of strategic acquisitions and mergers that’s fueling the expansion of fintechs in Latin America. The trend seems to be only getting stronger, as investors eye Latin America with interest and entrepreneurs look for bridges to new markets overseas. “The growing interest in fintech in the region and the excess liquidity in the markets has given fintechs that extra dry powder to grow aggressively. Only time will tell who puts the resources to good use,” said  Lopez.

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