FinTech companies in the region raised $9.7bn so far in 2021 boosted by huge funding rounds in Brazil
- The FinTech industry in Latin America experienced huge growth in funding between 2017 and 2019 as investors backed innovative startups making financial services more accessible for the large unbanked population in the region. Total capital invested grew from just $556.1m to $2.8bn during the period.
- FinTech investment growth in the region continued unabated in 2020 despite the coronavirus-caused economic uncertainty. Companies in the region raised more than $2.9bn last year, a growth of 4.65% year-on-year compared to 2019. The momentum in funding and deal activity was maintained by the increased demand for digital services especially in the WealthTech and Payments & Remittances sectors amid a surge for contactless payments and digital banking services due to the pandemic.
- FinTech funding growth in the region skyrocketed in 2021 as total capital invested is already more than three times last year’s total after just nine months. FinTech companies raised $9.7bn over that period as the region saw 23 deals over $100m compared to just 10 such transactions last year. Deal activity also increased sharply in the first three quarters to 268 transactions compared to 178 funding rounds completed in the whole of last year.
Brazilian companies raised the six largest FinTech deals in Latin America in 2021 so far
- The top ten FinTech deals in Latin America completed in the first three quarters of 2021 raised in aggregate $5.6bn, making up 57.7% of the overall investment in the region during the period. Brazilian companies led the way as they took seven of the spots on the list. Innovative solutions are quickly adopted by Brazilian companies and citizens alike, helping push technology forward. Mobile banking, for example, has been commonplace for most Brazilian clients for years and Covid-19 fast-tracked many of the trends already seen in Brazilian banking.
- As such, it is unsurprising that the three top deals this year have all been raised by challenger banks. The largest transaction was completed by C6 Bank, a full-service digital bank that offers a range of banking services to individuals and SMEs, which received $2bn from JP Morgan Chase in exchange for a 40% stake in the company. Marcelo Kalim, CEO and co-founder of C6 Bank said “With JP Morgan’s support, we will invest and scale our business in a way that continues to provide Brazilian customers with best-in-class digital banking products to help them accomplish their goals.”
- The largest deal outside Brazil was completed by Ualà, an Argentinian FinTech company, which raised $350m Series D round led by SoftBank Latin America Fund and Tencent. The company offers a Mastercard branded prepaid card and an app that allows users access to a number of financial services including sending and receiving money, online shopping, withdrawing cash at ATMs and requesting loans. he company, which reached a valuation of $USD2.45 billion, intends to use the funds to expand operations, with plans to have a team of 1,500 employees by the end 2021, and its business reach, developing new business verticals, providing innovation and technological development in Latin America.
The data for this research was taken from the FinTech Global database. More in-depth data and analytics on investments and companies across all FinTech sectors and regions around the world are available to subscribers of FinTech Global. ©2021 FinTech Global