This Week in Fintech Latam (16 Oct)

This Week in Fintech Latam (16 Oct)

Hola amig@s fintech,

Libra season is almost over, where’s my Scorpio crew? Jorge here with the hottest fintech news reporting from rainy Mexico City🌧️ Shoutout to writer dream team Andrea, Elena, Daniela, and *virtual hugs* to Christine, who is celebrating her birthday somewhere in France. That being said, let’s dive in!

tl;dr:

  • $128.1 million in fintech financing (equity and debt)
  • The Chilean Congress has approved the fintech bill, which is now ready to be enacted as a law.
  • 5 Latam countries will successfully implement an Open Finance regulatory framework by 2025, according to Finnovista and MercadoPago's latest report on Latam fintech.

Please find below this week’s front page of Latam fintech news.  If you’re reading this on the web, we’d appreciate your support by sharing and subscribing.

💛 Y’all be good out there. ¡Saludos! Até a próxima!


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📊 Stat of the Week

Global venture funding reached $74.5B in 3Q22, hitting a 9-quarter low. The new funding level represented a 34% drop QoQ, the largest quarterly percentage drop in a decade, and a 58% decline from the investment highs reached in 4Q21, according to CB Insights' The State of Venture Q3’22 report.

💬  Quote of the Week

“There is room for a lot of disruption in this market, both with existing companies able to grow more and ones that are left to be created. Even at fintech’s peak in LatAm so far, venture capital dollars as a share of GDP were a small fraction of what we’ve seen in the U.S. There’s a long way to go compared to what the U.S. and other developed markets are seeing.” - Bill Cilluffo, Partner at QED Investors.

📖  Read of the Week

Finnovista and MercadoPago co-published the report “Agenda Fintech Rumbo a 2025” where predictions are made regarding the fintech sector in Latin America. The report highlights the tech stack that Fintechs will integrate into their product offering over the next three years, and provides the most straightforward analysis of the state of Open Finance regulation and dynamics in the region.

🦉 Tweet of the Week


💸 Venture Financing

AleFi, the Miami-based social investment platform, raised a $600,000 pre-seed round from RevTech and CEO Investors with the participation of angel investors. The company connects US and Latam retail investors and their portfolios.

Transa Tu Auto, the Chilean digital payments platform for used vehicles, raised a $1.2 million seed round with the participation of a group of angel investors. The company allows users to safely buy and sell used cars by holding the payment amount until the transaction completes.

Nobli, the Brazilian banking-as-a-service and lending platform, raised a $1.3 million seed round led by Domo Invest and Redpoint Ventures. The company allows banks, brokers, and fintech to offer investment-guaranteed credit (CGI) platforms. Nobli leveraged the regulatory changes made by the Brazilian Central Bank to provide security for the use of an investment as collateral when transferring from notaries to financial institutions.

Arch, the Chilean DeFi (decentralized finance) asset management platform, raised a $5 million seed round led by Upload Ventures, Digital Currency Group, Soma Capital, Techstars, Devlabs, and Ripio Ventures. The company develops tokenized index products to build and manage diversified crypto portfolios.

Zulu, the Colombian-based digital wallet, raised a $5 million seed round with participation from Cadenza Ventures and Gaingels, among others. Zulu’s app allows users to save in dollars via Circle’s USDc stablecoin.

Fidu, the Argentina-based financial solutions platform for schools, raised a $5 million seed round from Lightspeed Venture Partners, NFX, among others. School administrators can use Fidu’s app to send tuition and pay slips to parents, and the company is currently piloting revenue-financing products.

💵 Debt Financing

Avista,  the Colombia-based pension advance platform, announced a $110 million credit vehicle structured with Alianza Fiduciaria, the Colombian investment manager. Multiple Alianza’s alternative vehicles fund the credit structure. The company disclosed having 60,000 users, and more than 80% of the retirees are earning minimum wages.


☯️ Exits

🤝 M&A - Fintech

Aplazo, the Mexican BNPL (buy-now-pay-later) platform, announced the acquisition of the machine learning-powered data platform Sensai Metrics. This acquisition will expand Aplazo’s data services, providing its clients with insights into sales figures, marketing performance, and customer demographics. The company did not disclose transaction details.

🏦 M&A - Bank and FinServ

IHC (NYSE: IHC),  the Abu Dhabi-based conglomerate, announced an investment of $200 million for a 49.9% stake in Lulobank, the Colombian neobank. Lulo, Colombia’s first regulated neobank, has reached 120,000 users since its June launch.

Arco Educação (NASDAQ: ARCE), the Brazilian educational software company, acquired the remaining 75.1% of Isaac, the Brazilian financial platform for private K-12 schools. Isaac manages the billing and collection of tuition fees; offering schools guaranteed revenue. The company had $35 million in ARR, and General Atlantic, Kaszek, and SoftBank were among its investors. The share exchange deal was worth $125 million.


🚀 Product Launches & Partnerships

💻 Fintechs

Kavak, the online used-car marketplace, announced its expansion to the Middle East. It plans to invest $130 million over the next two years in Dubai, Oman, and Saudi Arabia, which will represent the 7% and 10% of the business.

Kapital, the Mexico-based neo-bank focused on SMEs, freelancers, and entrepreneurs, announced the start of operations in Colombia, offering various "all-in-one" business account products.

Flink, the Mexico-based consumer trading platform, and The Interactive Museum of Economics in Mexico announced a partnership to develop financial education in the country, creating the first digital investment laboratory.

PicPay, a Brazil-based digital wallet, announced the launch of a product focused on payments to achieve end-to-end

Resuelve Tu Deuda and Soy Yo, announced a partnership to promote education and access to financial tools in Colombia. Currently, Colombia ranks 39th among countries with financial inclusion.

🏦 Financial Services & Banking

Adyen, based-Netherlands platform that integrates gateway, risk management, processing, acquisition and settlement of payments, announced the start of operations in Mexico, offering a unified commerce solution that will allow companies to make more decisions based on data.

Chubb and Tenpo, a neobank that belongs to the corporate venture capital of the Peruvian group Credicorp, announced a regional partnership to co-create personalized digital insurance.


📰 Other News

FinTech Magazine published its global  Top 100 Fintech Leaders list, featuring Nubank co-founder Cristina Junqueira in the #1 spot and Sergio Furio of Creditas at #8.

Women make up nearly a third of FinTech Top 100 Leaders list

According to the Latino Donor Collaborative's 2022 LDC U.S. Latino GDP Report, the GDP of US Latinos is more significant than Brazil’s and Mexico’s combined. From 2010 to 2020, their GDP grew 65%, 2.6x the amount of non-Latino GDP. If they were their own country, it would be the 5th largest economy in the world. The Latino population grew more than 22% in that same 10-year period, reaching 62 million. Almost one in five Americans are now Latino or Hispanic.

Elenas, the Colombian female-focused social commerce platform, raised a $20 million series B round led by DILA Capital, with the participation of FJ Labs, Endeavor Catalyst, the IDB Lab, Broadhaven Ventures, Mercado Libre, Grupo Bolivar and Leo Capital. The platform has empowered thousands of women in Colombia and Mexico to start online businesses and earn additional income by selling products on WhatsApp, Facebook and other social media sites.

CERC, the Brazilian factoring platform, raised a $106.6 million growth round led by Mubadala Capital, Abu Dhabi's state investor. Earlier this year, the company announced its plans to IPO amid the rapid growth experiment due to regulatory changes introduced by Brazil’s central bank, making registering credit card receivables on electronic platforms mandatory.


📜 Policy

It’s official! The Chilean Congress passed the bill that regulates Fintech companies, and is ready to be enacted as a law. Updates by Congress approved this week include reinforcement of data protection rules, taxation schemes, and an Open Finance base-layer framework.

Mexico’s banking commission issued a controversial proposal for policy reform regarding “abandoned” accounts in the financial system. Under the new set of rules, the Mexican government would now be able to confiscate money from bank accounts with no record of transactions in over 3 years.

Brazil’s Securities and Exchange Commission (CMV) issued an official statement and set of guidelines regarding the agency’s treatment on crypto assets. This is the first formal statement from a regulatory agency on the treatment of crypto assets as securities in Latin America.

Guest post by Lorena Buzón:

Americanas Fintech (AMER3) starts operating as a payment institution.(Source)

Brazilian fintech Ame receives authorization from the Central bank to operate as a payment institution. (Source)

The Head of the Colombian central bank, Leonardo Villar, has announced that they are working on the development of an immediate digital transfer system (SPI). (Source)


📚 Deeper Reads

Brazil's instant payment Pix and the future of cross-border payouts

International study reveals that at least 60% of people do not understand anything about cryptocurrencies (ES)

Development Banks Should Reform Their Lending Practices

Neobanks: Disruptive technology, elusive profits

This is how Nu became the largest credit card issuer in Mexico, without being a bank (ES)


Made in Latam with 💛 by Elena, Daniela, Jorge, and Andrea

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