The amounts raised in investment rounds this year are a long way from the highs reached in 2021, underscoring the region’s complex financing climate
Latin American fintechs will need to continue lower their expectations for fundraising in investment round this year, as the rising cost of borrowing on international markets puts the brake on capital inflows into the region.
As 2022 approaches the halfway mark, a review of the largest capital placements shows Brazil’s digital bank Neon leading the field with a US$300 million fundraising. But that’s still a far cry from the US$1.15 billion and US$430 million raised by Nubank and Ebanx, respectively, in the first half of 2021.
It’s not just Latin America that’s feeling the pinch as international financial conditions tighten. Funding for the fintech sector globally fell 18% in the first quarter of 2022, compared to the fourth quarter of last year, according to CB Insight.
“There was a lot of capital deployment in 2021. That’s not going to be repeated in 2022,” says Rodrigo García, CEO and founder of Finnovating, a platform that connects investors with startups.
Against this backdrop, we’ve put together a list of the largest fintech investment rounds so far this year.
Largest fintech rounds of 2022
So far, no fintech investment process has surpassed the US$400-million level considered a mega-round. Here we concentrate on operations greater than US$100 million.
The list also highlights six new unicorns, a creature that’s becoming harder to spot.
Brazilian neobank Neon raised a total US$300 million in its series D, catapulting its valuation to unicorn status.
BBVA led the investment, continuing the Spanish bank’s strategy to participate in more digital ventures; its portfolio also includes the neobanks Solarisbank of Germany and Atom of the U.K.
Neon was founded by Pedro Conrade in 2016 and currently has 12 million customers.
Brazilian lending fintech Creditas closed a Series F investment round for US$260 million at the start of the year, adding Fidelity Investments as a shareholder. The total raised by the fintech in its six rounds reached US$829 million and saw its valuation rise to US$4.8 billion.
Creditas, founded by Spaniard Sergio Furio, was launched in 2012 and today employs more than 4,000 people in Brazil and Mexico.
Among its investors are SoftBank, QED Investors and Kaszek Ventures.
Colombian proptech Habi raised US$200 million in a Series C investment round in May and became the country’s second unicorn (Rappi was the first). The financing was led by Homebrew and SoftBank.
Habi was founded by Brynne McNulty and Sebastián Noguera and operates a lending vertical called Habicredit, which helps real estate buyers obtain financing.
The total raised by Habi since its founding in 2020 is US$315 million.
Nowports, a Mexico-based freight forwarder, received US$150 million in a Series C round led by Softbank in May, boosting its valuation to US$1.1 billion.
The now unicorn intends to expand its fintech operation and complete its offering by setting up a risk department to grant credit lines that use customer cargoes as collateral.
Founded by Maximiliano Casal and Alfonso de los Ríos, the startup also plans to expand in Latin America and open an office in Hong Kong.
Chilean insurtech Betterfly became Chile’s third unicorn (after Cornershop and NotCo) in February as it raised US$125 million in a Series C led by Glade Brook Capital.
Betterfly said it will use the funds for its expansion into seven new markets in LatAm and Europe. Founded by Cristóbal and Eduardo della Maggiora in 2018, the company operates in Chile and Brazil and has just branched into Ecuador.
Betterfly surprised the market last September when it announced the acquisition of Chilean startups Kunder, Heypay!, Nesto, ProSueños and Brazil’s Xerpa all in one day.
Brazilian financial technology provider Dock raised US$110 million in May in a round led by Lightrock and Silver Lake Waterman. The fundraising also turned it into a unicorn, with a valuation of US$1.5 billion.
Led by CEO Antonio Soares, Dock specializes in the development of technology for Banking as a Service and operates in Brazil and Mexico. It accelerated its entry into the Mexican market after acquiring Cacao Paycard last year.
The fundraising will speed up the fintech’s expansion and development of new products.
Chile’s Xepelin, which provides digital financial solutions to SMEs, raised US$111 million in a Series B in May, led by Avenir and Kaszek.
“Our business doesn’t depend on an economic cycle, whether it’s positive or negative,” Sebastián Kreis, co-founder and CEO of Xepelin, which operates in Chile and Mexico, told iupana.
Expanding in Latin America’s second biggest economy is this year’s challenge. “We continue to focus on growing in Mexico, on winning in Mexico, on being the most important B2B fintech,” says Kreis.
Ecuadorian fintech Kushki expanded its Series B round this year and added US$100 million to the US$86 million raised in June 2021. The latest capital raising converted Kushki into the country’s first unicorn.
“Reaching this milestone at a time of economic uncertainty is evidence of the quality and resilience of our entire team,” said Gabriele Zuliani, Kushki’s executive vice president of market development.
Kaszek Ventures, Clocktower Ventures, SoftBank and DILA Capital participated in the extension. The fintech started 2021 with 140 employees and now has 750.
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