#TopStory
Fintechs clip LatAm growth plans
Weak economic growth in Latin America is leading fintechs to restructure operations in some parts of the region and in some cases shutdown operations altogether. After years of growth and expansion, companies are now focusing on their strongest markets and boosting efficiencies.
This week, it emerged that German digital bank N26 fired some 20 employees in Brazil, or about 15% of its local workforce. The move fueled speculation the bank was withdrawing from the country altogether, something its CEO denied, according to the Brazil Journal.
Buy now, pay later fintech Addi is also scaling back its internationalization strategy: After just over two years of operating in Brazil, it plans to pull out of the country in order to focus on Colombia, in its effort to break even next year, the company’s co-founder told Forbes. It’s shifting its focus to a country where some 50 fintechs ceased operations in 2022, a “mortality rate” of 17.9%, according to Finnovista figures.
The developments are an indication of how credit-focused fintechs are struggling to stay afloat at a time when global interest rates have spiked and are dampening consumer demand.
Héctor Ortega, a fintech specialist based in Mexico, sees three factors behind the slowdown in expansions: business models, regulation and local culture.
“It’s not just about having local staff, it’s understanding how to integrate [local] rules into your operating model. It’s expensive, because you practically have to redo the model. That erodes your ability to enter the market,” Ortega said.
Used car marketplace OLX has also succumbed to the sluggish economy. It has been winding down operations in LatAm countries such as Peru, Colombia and Ecuador and recently announced that it’s in the process of exiting Mexico, where it also offered a financing service.
“We’ve been faced with macroeconomic and market challenges that have caused significant and persistent decline in the used car industry,” Roberto Villalobos, OLX’s Mexico manager, told iupana.
#Strategic Plays
dLocal gets ready to offer payment services in Brazil
dLocal, the Uruguayan fintech specialized in cross-border payments, received the all-clear from the Central Bank of Brazil (BCB) to operate locally as a payment company. The fintech will now be able to manage prepaid accounts and act as a payment initiator, competing with the likes of Ebanx, which also processes and manages international payments.
Bitso teams up with Stellar for international B2B payments
Crypto exchange Bitso joined the Anchor network operated by crypto payment specialist Stellar. The tie-up is designed to facilitate company remittance payments and allow transfers to Mexico, Brazil, Colombia and Argentina.
Besides…
- In Mexico, Ualá joined forces with Western Union to let users receive remittances via mobile phone.
- Also in Mexico, the markets regulator authorized Pretech and Quantum Pay to operate as payment platforms, bringing the number of licensed operators to 39.
- Diners Club Perú teamed up with BPC to bolster its technology solution for fraud detection.
#Investors
JP Morgan refreshes Konfío credit line
Mexican fintech Konfío renewed a MXN$1.5 billion (US$90.3 million) credit line with US bank J.P. Morgan to fund SME loans of up to MXN5 million each.
Mattilda raises US$19M in Series A
Mexican fintech Mattilda, which provides payment and financing solutions to schools, raised US$19 million in a Series A financing round. The investment was led by GSV Ventures, with participation from Fintech Collective and Dila Capital, and follows a seed round nine months ago.
Invariantes readies US$30M fund for LatAm and US
Venture capital fund Invariantes announced a third fund for US$30 million to finance investments in companies already in its portfolio as well as fintech, artificial intelligence and deeptech startups in Latin America and the U.S.
Also…
- The accelerator Rockstart will invest US$6 million in early-stage Latin American startups over the next three years.
- Huawei and the Mexican Agency for International Development Cooperation (Amexcid) launched Spark Accelerator, which has US$1.6 million available to invest in Chile, Mexico, Colombia and Peru.
- Brazil’s PlayBPO, Edmond, Tributei are among 13 fintechs selected for funding by Google’s Black Founders Fund, which has R$16 million (US$3.3 M) available for investment.
#People
Clara lands Big Tech alum in Brazil
Mexico’s Clara appointed Francisco Simon as country manager for Brazil. Simon, who will also be responsible for the sales and corporate teams, previously worked at Uber, Meta and Microsoft. He replaces Layon Costa, who remains Clara’s global director of business development.
Mónica Higuera named regulatory chief in Colombia
Colombia’s Financial Regulation Unit (URF) said Mónica Higuera Garzón will become the regulator’s new director. Higuera has 25 years of experience as an investment advisor and replaces Felipe Lega, who quit last year to join Deloitte. Ivonnie Edith Gallardo was serving as interim director.
Finerio Connect appoints new CTO for LatAm
Mexican startup Finerio Connect named José Santacruz López chief technology officer (CTO) for Latin America. A systems and IT engineer, he has also worked as a scrum master and product owner.
#iupanaExclusive
Banco de Guayaquil has a roadmap for its PeiGO wallet and it includes bolstering the platform with products such as nanocredits, investment and insurance. This week, the CEO of PeiGO, Rodrigo Andrade, details the the wallet’s plans, and says he is keeping a close eye on the evolution of peers such as Yape in Peru and Nequi and Daviplata in Colombia.
- Banco de Guayaquil plans to use PeiGO to serve Ecuador’s unbanked population.
- Andrade says the wallet expects initially to offer loans of between US$25 and US$50.
- The bank has made the wallet profitable by charging commission for its use.
Want to know more about PeiGO and its strategy for reaching new market segments with ‘nanocredits’? Read this week’s iupanaExclusive.