LatAm Fintech Snapshot – March 2019

3 April, 2019

Katie Llanos-Small

 

After a very calm beginning to the year, it seems that the fintech ecosystem in the region is finally taking off.

Although the number of investments in March wasn’t that impressive – only 8 – the total amount raised was almost 14x the one in February, with a total of US$ 80.9m in disclosed rounds.

This time, Brazil led the way with more than 94% of the amount raised. This was due to the Series B round raised by the fintech/real estate tech Loft, which raised US$70m at a US$ 350m valuation. Quite impressive! Also, Warren, a robo-adviser, landed a US$ 6.4m investment, reinforcing a trend on wealth management fintechs.

Although Mexico didn’t have a major equity investment this month, Credijusto closed a US$ 100m debt round with Goldman Sachs to expand its credit operations. That represented another massive debt round for credit fintech in the region, as you might remember that Portal Finance raised US$ 200m debt from BTG Pactual in September. Also this month, Fondeadora received a US$ 1.5m investment to join the starting-to-be-crowded neobank market in Mexico.

Still not much is happening on the M&A front. The only interesting almost-fintech deal was that First Data acquired a tech company for the financial industry called Software Express.

The big tech companies, on the other hand, are making some interesting moves in the region. Paypal closed a huge investment in Mercado Libre, US$ 750m, while Totvs announced it would enter the fintech game by creating a new department called Fintech Totvs.

Also, Nubank just surprised everyone again with some great news: They not only closed a US$ 130m fund to finance its customer credit card lending but also achieved 4 million bank accounts open on its NuConta. (As a comparison, N26 says it has 2.5 million customers).

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

Special thanks to Denisse Cuellar from BCP in Peru and Bruno Diniz from the Fintech Committee at ABstartup in Brazil.

Main Investments

• Chile – The Chilean fintech Destacame received a US$ 3m Series A round from Fen Ventures, Accion Venture Lab, and Mountain Nazca.
• Mexico –  Fondeadora, a new Mexican digital bank, raised US$ 1.5m in a round with IGNIA.
• Mexico – Goldman Sachs gave a credit of US$ 100m to Credijusto, an online lending platform, to increase its loans.
• Brazil – Loft, a Brazilian real estate/fintech startup, received a Series B round of US$ 70m from Fifth Wall Ventures and QED Investors at a US$ 350m valuation.
• Brazil – Firgun, a P2P lending platform for SMEs, and RocketPass, an event payment and management system, received an undisclosed seed round from Superjobs.
• Brazil – The robot advisor Warren just received a Series A round of US$ 6.4m from relevant investors, Kaszek and Ribbit Capital.

M&A

There were no announced exits of fintechs in March, however, First Data acquired a Brazilian technology company for the financial industry called Software Express for an undisclosed amount.

Regulations

• Brazil – The Brazilian senate approved the creation of an entity to provide credit to micro and small companies, Empresa Simples de Crédito (ESC), with the goal to lower the loan cost for those companies.

Partnerships

• Colombia – Rappi and the Colombian bank Davivienda closed a partnership but didn’t disclose details about it.

Relevant Moves

• Brazil – Nubank raised around US$ 130M for a fund to finance its customer’s credit card receivables and also recently achieved 4 million bank accounts opened in its NuConta.
• Brazil – Totvs, the leading software company in Brazil, just launched Fintech Totvs, a department focused on financial technology innovation.
• Brazil – Foxbit, one of the leading Brazilian crypto-exchanges, won a legal dispute against Banco do Brasil, the largest bank in Brazil, to be able to open a bank account. This is the first decision favoring the crypto-exchanges in the country, and is part of a broader fight with banks over accounts for crypto-related businesses.
• Argentina – Paypal is investing in Mercado Libre in a US$ 750M deal to expand its leadership in e-commerce in the region as well as in the fintech market.  
• US – Omidyar Network, an impact investment company backed by the Omidyar family, decided to spin-off its financial inclusion initiative, now called Flourish. Although it isn’t an initiative focused on Latin America, Omidyar Network participated in some prominent fintechs in the region such as Guia Bolso, Neon, and LenddoEFL

 

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.