The first half of 2017 has seen the number of deals to FinTech companies in Latin America rocket with 63 deals already closed.
- In 2016 FinTech companies in Latin America received more than 3 times the total investment in 2015, with three large deals to online banking platform NuBank totaling $188m. Excluding these three NuBank deals FinTech companies in Latin America still saw a 30.6% increase in total funding between 2015 and 2016.
- Latin America has had a strong start to the year. When considering only investments valued under $50m 2017 has already seen 77.2% of the total amount invested in 2016. The largest deal closed in H1 2017 was a $12m investment in Avante from Vox Capital Partners and Fiinlab. Avante operate within the marketplace lending space providing financing options to SME’s.
- The number of deals gradually grew at a CAGR of 3.87% between 2014 and 2016. Although this growth is small it has been steady and looks set to soar in 2017 as the number of deals closed so far this year is already 96.6% of 2016’s figure.
Investments in LatAm FinTech companies were down by 56.9% YoY in Q2 2017, despite increases in the number of deals closed.
- The total amount invested in deals valued under $50m has picked up since falling to $13.3m in Q4 2016, however investments are still down compared to Q2 2016. Even when discounting Nubank’s $56m debt financing round investments have still fallen by 22.7% YoY.
- Brazilian Nubank received 60% of the total amount invested in FinTech companies based in Latin America in 2016. The online banking company based in Sao Paulo received a total of $188m in 2016 across a $52m series C round raised in January, $56m from Goldman Sachs in April and a huge $80m Series D round in December. Nubank will use the money to expand its operations, hire new people and develop new products.
- The number of deals shot up in Q2 2017 as the quarter saw more than 5 times the number of deals closed in the previous quarter. This is partly due to NXTP labs, which announced their 2017 class in May.
Brazil and Mexico receive the highest share of investments, however the countries combined share has fallen progressively since 2014.
- Brazil and Mexico have the largest deal share in the LatAm Region. However, the combined deal share for these two countries has fallen progressively from 67.2% in 2014 to 58.4% in 2016. Despite this fall in deal share the two countries still received more than 50% of deals closed in the first half of this year.
- Argentina’s deal shares steadily increased from 12.1% in 2014 to 21.5% in 2016. The country has also had a good start to this year, taking 22.2% of deals to the region. This included a $4.3m deal to security software company VU Security which develops security solutions for mobile payments and the IoT.
- The share of deals to Colombian FinTech companies jumped to 12.7% in the first half of 2017 with companies such as Invoicing Provider Portal Finance receiving an undisclosed investment from Magma Partners in April.
More than 50% of deals in Latin America go to FinTech companies specialising in Payments & Remittances and Marketplace Lending.
- 50.8% of deals to companies based in Latin America went to companies specialising in Payments & Remittances and Marketplace lending. The largest deal to a Latin America based company in H1 2017 went to Marketplace lending company Creditas. The online lending platform raised $19m in a series B funding round in Q1.
- A further 26.8% of deals went to companies specialising in Infrastructure & Enterprise Software, WealthTech and InsurTech.
- In Latin America, the investment is much more focused on the two largest sectors than in North America and Europe. In these regions, the combined share of deals to Payments & Remittances and Marketplace lending companies sit at 33.2% in Europe and 29% in North America, around 20% lower than in Latin America. This is mostly due to companies trying to offer services to the large number of unbanked individuals in Latin America.
