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The future of finance in LatAm & the Caribbean

Investors zoom in on credit

Jan 21, 2022

By Antony Pinedo
Los inversionistas apuestan por las fintech de crédito

2022 is shaping up to be a year of growth and new business models for credit fintechs. About US$140 million flowed into the vertical this week via a series of debt and equity rounds, as mutual funds tossed their chips into the sector.

Investor interest in the sector will give impetus to new modes of lending, such as buy now, pay later (BNPL), market sources told iupana.

“The beauty of this new capital is that it drives innovation, especially in financial services, and allows agile models like BNPL to appear,” said Nicolás de Camino, CEO of Chilean fintech Xepelin, which raised US$80 million on January 18th. “We’ve seen BNPL develop a lot in the B2C segment and it’s starting to appear in the B2B segment,” he told iupana.

Commenting on the credit sector’s rapid growth, Gastón Vega, the CEO of Avanzo, a Colombian fintech that raised a US$1.3 million seed round, said:“ We’re growing like mushrooms on different fronts; if it was just one, it wouldn’t be so funny because it would be easy for banks to imitate,” Vega said.

Underlining the dynamism in the credit fintech sector, Brazil’s Creditas said this week it is preparing for an initial public offering (IPO) in the U.S. and expects to achieve a valuation of US$10 billion. The IPO is seen taking place at the end of the second quarter. The firm will surely be expecting a similar reception to the one Nubank received in December.

Other credit fintechs raising capital included Chile’s Xepelin, which provides financing to SMEs via factoring and other mechanisms. It received US$80 million from Community Investment Management (CIM) to bolster its expansion in Mexico.

Meanwhile, Fairplay, a Mexican fintech that lends to SMEs, raised US$35 million in a Series A split between equity and debt, with Dila Capital, Kayyak Ventures and Architect Capital putting up the cash.

And Agrolend, a Brazilian fintech that finances agricultural producers, closed a series A round for R$80 million (US$14.5 million) led by Grupo Valor Capital.

In addition, this week saw Guatemalan fintech Amigo PAQ raise US$5 million while in Argentina, Wibond closed a round for US$2.25 million

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