Fintech investments are on the rise in Latin America, growing 31% (in terms of dollars) and 81% (in terms of deal count) in 2016.
Startups in Latin America raised US$500m in venture capital in 2016, according to LAVCA data. Most of that money (US$342m) was invested in the IT sector. Within the IT sector, fintech was the most popular category of investment, capturing 55% of IT dollars, and representing about 25% of all IT deals.
Key trends from LAVCA’s presentation at the 2017 FINNOSUMMIT in Bogotá
Local investors are teaming up on fintech deals. Syndicates of local investors (two or more locally based VCs) were responsible for 63% of fintech deals in 2016.
- VARIV Capital, Jaguar Ventures, FEMSA Comercio, and Conconi Growth Partners led a US$6.6m Series A in Conekta, an online/offline payments startup in Mexico City. INTERESTING READ about the founding engineers and the deal that got them in OXXO stores (the largest convenience store chain in Mexico) in our Entrepreneur Profile with co-founder and CEO Hector Cardenas.
- KaszeK Ventures joined Redpoint e.Ventures, Quona Capital, and QED in a R$15m investment in Brazilian lending startup BankFacil. KaszeK, Quona, and QED also co-invested in Mexican lending platform Konfio.
- The IFC led a R$60m Series C in GuiaBolso, with previous backers KaszeK Ventures, Ribbit Capital, and QED Investors. This is the IFC’s first investment in a Brazilian fintech startup. GuiaBolso raised US$1m in seed financing in 2013 from Valor Capital, e.Bricks and angel investors. Valor and e.Bricks returned for a US$3m Series A in 2014, led by KaszeK Ventures. In 2015, Ribbit Capital led a US$7m Series B with Omidyar Network, QED Investors, Ed Baker, head of growth for Uber; Mark Goines, and early investor in Mint.com; and Peter Kellner, co-founder of Endeavor.
Major international funds are making some of their first investments in LatAm fintech. Local investors partnered with international investors for 26% of fintech deals in 2016.
- General Atlantic made an undisclosed investment in PayClip (formerly Clip). Luis Cervantes, General Atlantic’s head of Mexico, joined the board. PayClip raised an US$8m Series A in 2015 led by Alta Ventures, with participation from AMEX Ventures, Sierra Ventures, Endeavor Catalyst, and Angel Ventures Mexico. General Atlantic’s current portfolio in the region includes Argentina’s Despegar.com and Brazil’s SAS Sistema de Ensino.
- DST Global, the investment firm started by Russian venture capitalist Yuri Milner, led a US$80m round in Nubank, with participation from Redpoint Ventures and Ribbit Capital. Prior investors include Sequoia Capital, QED Investors, Tiger Global Management, and Founders Fund. Nubank raised US$80m in 2015 over two rounds, and separately raised a R$200m debt round from Goldman Sachs.
- Kueski, a lending platform for middle-class Mexicans, raised US$35m in equity and debt funding. The US$10m equity investment was co-led by Variv Capital, Richmond Global Ventures, Rise Capital and CrunchFund, with participation from Victory Park Capital and existing investors Angel Ventures Mexico, Core Ventures Group, and Auria Capital.
- Accion Frontier Inclusion Fund led an US$8m investment in Konfio, a Mexican online lending platform, joined by Quona Capital, QED Investors, KaszeK Ventures, and Jaguar Ventures. Accion and Jaguar also invested in 2014. Konfio is KaszeK and QED’s first investment in Mexico.
- QED Investors partnered with Scotiabank to launch a dedicated fund for fintech investments in Latin America. QED partner Bill Cilluffo tells LAVCA: “We’ve been investing in Brazil for a little over two years, with four portfolio companies (BankFacil, GuiaBolso, Pitzi, Nubank), and we did our first investment this year in Mexico in Konfio. With this new fund, we are actively looking at other opportunities in these markets, and will be exploring other countries within Latin America.”
For more information about fintech activity in Latin America:
- DOWNLOAD LAVCA’s presentation at the 2017 FINNOSUMMIT in Bogotá
- Read LAVCA’s interview with Finnovista covering key trends in fintech investments in 2016
- Check out Finnovista’s Fintech Radar for lists of fintech startups by country in Latin America