Fintech Snapshot: July 2019

7 August, 2019

Katie Llanos-Small

 

After a record-breaking June  – when Latin American fintech attracted US$ 237 million in equity investments – the region broke that record again in July with fewer, but larger, investments. Nubank announced a mega round of US$ 400 million lead by the growth equity firm TCV, increasing its valuation from US$ 4 billion to US$ 10.4 billion. Now, Nubank is one of the world’s largest unicorns – and top 3 in the fintech industry.

Although there were some rumors that Softbank would participate in this new Nubank round, in the end, it decided to bet on another digital bank – although not exactly a fintech: Banco Inter, which IPO’d last year. Softbank bought most of the US$ 341 million follow-on offering, which left Banco Inter’s valuation at US$ 6.6 billion.

Besides these massive investments, we saw three other smaller deals from leading fintechs from Brazil and Mexico. One highlight was Nexoos raising a US$ 6.5 million in debentures to increase its lending power.

In total, Latin American fintechs raised US$ 400.3 million in equity investment this month – not counting the capital raised by Banco Inter – in three deals and US$ 6.5 million in a debt round. In this month, Brazil raised 100% of the disclosed rounds, asserting its leadership in the region.

At the same time, the battle between the two largest ride hailing companies intensified in Latin America and started to enter the financial services: both companies started to offer debit cards to their drivers.

If you enjoy these columns, don’t miss my newly-launched Fintech LatAm Report 1H2019, for a complete picture of LatAm investment trends so far this year. The report summarizes and analyzes the data of the first 6 months of the year: Read it here

Well, let’s jump into the relevant fintech deals and news of July, and stay tuned for the next Fintech Snapshot next month! 

 

Main Investments

• Brazil – The challenger bank Nubank, received US$ 400 million in a Series F round led by TCV with participation of Tencent, DST Global, Sequoia Capital, Dragoneer, Ribbit Capital, and Thrive Capital
• Brazil –  The business lending platform Nexoos raised US$ 6.6 million in a debt round issuing debentures to increase its lending capabilities.  
• Brazil – Another lending platform, Peak Invest, raised US$ 317 thousand in a crowd-equity round from Eqseed
• Brazil – Although not a proper fintech and already a listed company, the digital bank Banco Inter received a US$ 341 million investment during a follow-on share sale from Softbank and other current investors
• Mexico –  The mexican consumer lending platform Smart Lending raised an undisclosed amount from Dila Capital, Jaguar Ventures and some angels

M&A

• Brazil – The fintech Creditoo was acquired for an undisclosed amount by a larger fintech also in the credit market, Creditas

Regulations

• Brazil – So far, nine fintechs have been approved to operate as a financial institution to provide credit. There are still 11 more applicants being evaluated.
• Mexico – The Mexican regulator CNBV, reminded the fintechs that they have until 25th of September to apply for a fintech licenses to keep operating, otherwise, they could be shut down.

Relevant Moves and Partnerships

• Brazil –  Temasek, a big investor from Singapore, is looking to invest more in Brazil after investing US$ 150 million on a venture capital fund managed by Monashees 
• Mexico – Beginning of July, Uber started to offer, in partnership with BBVA, a digital account and debit card, entering in the financial services market
• Brazil and Mexico – Didi didn’t take long to respond, it started to offer a debit card to its drivers in both countries later in the same month. 
• Brazil – Santander announced that would be launching platforms to compete directly with fintechs. 
• Brazil – BTG Pactual announced a partnership with Tezos to issue more than US$ 1 billion in Security Token Offers (STOs) using Tezos’ blockchain. 

Thiago Paiva is a partner at Liquia Digital Assets, an investment bank for the digital assets economy. He is passionate about the intersection of finance and technology.

He has 8+ years working with startups and innovation, investing in more than 60 startups through global accelerators Wayra (Telefonica’s global accelerator) and Startupbootcamp Fintech. He worked closely with more than 20 fintechs from 8 different countries for the past five years.