FINTECH MARKET IN LATIN AMERICA 2021 Q1:

Investment and deals

By Thiago Paiva
Thiago Paiva
Index
1. Intro
2. The Author
3. Fintech Ecosystem
4. Investments
○ Total Investments in the Region
○ Investments per Country
○ Investments per Month
○ Investments per Industry Segment
○ Main Investments Rounds
○ Debt Financing Deals

5. Merger & Acquisitions

6. Final Thoughts
7. Resources
○ Fintech Radars
Thiago Paiva
Intro
First of all, thanks for reading this material! My name is Thiago Paiva and I'm a fintech entrepreneur, investor,
and columnist. I've been working with startups and innovation for the past 10 years in Latin America, US, and
Singapore.

I have invested and accelerated more than 60 startups from which more than 20 were fintech startups from 8
different countries while working at Wayra in Brazil and Startupbootcamp Fintech in Mexico.

Since I started to invest in fintechs, in 2013, the market radically changed. In less than 7 years, we saw the birth
of the first fintech unicorns in the region, as well as IPOs from Stone (NASDAQ) and Pagseguro (NYSE) in the US.
Now Latin America is one of the hottest places worldwide for fintech investments and Nubank is the most
valuable neobank in the world!

My goal with my reports has always be to shed light to the region as it was undervalued; now things has turned
and my goal is to support the region with relevant information to interested investors and entrepreneurs.

Finally, if you like this material, please, share it!

Thiago Oliveira de Paiva

Thiago Paiva
The Author I'm a fintech entrepreneur, investor, and columnist! I have been actively engaged
in the Latin American ecosystem since 2010. During this period, I have evaluated
2,600+ and invested in 60+ startups from 9 different countries while working at
Wayra Brazil and Startupbootcamp Fintech Mexico. I studied Fintech at MIT and
Business with Concentration in Finance at UCLA.
I write about fintech in Latin America in international and regional publications
and also develop reports analyzing the ecosystem.

I'm currently a Product Manager at Oyster Financial, a Neobank for SMEs in

Latin America.

Thiago Paiva
FINTECH ECOSYSTEM

Thiago Paiva
Fintech Ecosystem in Latin America
Since Nubank showed the potential of the fintech market in the region, the Latin American ecosystem has
been growing at a breakneck speed.

We have seen world-class VCs investing in the region (Andreessen Horowitz, Sequoia Capital, SoftBank, and
more) as well as the rise of outstanding local VCs such as Monashees and Kaszek.

The region still has half of its population as unbanked with the marked still controlled by large financial
institutions oligopolies; however, that scenario is changing fast as neobanks and credit fintechs are
challenging those oligopolies while onboarding population outside the financial system.

Even though Latin America has been one of the hardest hit regions by the COVID-19, the startups in the
region, specially fintechs, have been thriving due to a forced digital adoption and financial inclusion caused
by the pandemic.

In the region, Brazil is now a quite mature fintech ecosystem with many unicorns but Mexico and Colombia
are evolving quite fast following similar paths.

Thiago Paiva
Number of Fintechs per Country
771 Updated Aug/20

441
Even though data from some countries are not up to
Updated Mar/20
date, Brazil (771) and Mexico (441) remains the two

200
strongest fintech ecosystems in the region.
Updated Apr/20

Colombia has secured third place in the region but

112 Updated Aug/19 other countries are also moving to expand their
fintech ecosystem.

110 Updated Mar/18

Source: Fintech Radars from Finnovista and Fintechlab Fintech Radar Brazil
Thiago Paiva
Highlighted Fintechs in the Region

Thiago Paiva
Fintech Adoption
Consumer Fintech Adoption Index - EY

Latin America is one of the regions with fastest

fintech adoption, according to EY Consumer
Adoption Index 2019. Average
64%

It had 3 countries in the Top 10 (Colombia, Peru,

and Mexico) and all of the largest economies
above the average, 64%, of the 27 researched
countries.

Source: https://fintechauscensus.ey.com/2019/Documents/ey-global-fintech-adoption-index-2019.pdf
Thiago Paiva
Most Funded Fintechs
● BR - Nubank (US$ 1.6B): The largest neobank outside of China with more than 20M customers, worthing US$ 10 billion;
● BR - Loft (US$ 688M): Is a proptech that facilitates the purchase and sale of properties;
● BR - Creditas (US$ 569M): A secured online loan to consumers;
● BR - Neon (US$ 420.3M): A neobank with personal and business account;

● BR - Quinto Andar (US$ 335M): An unicorn proptech that facilitates the rent of properties by offering financial services;
● UY - dLocal (US$ 207M): Is a cross-border payment processor;
● AR - Ualá (US$ 194M): Neobank for personal accounts;
● MX - Clip (US$ 160M): A card payment provider similar to Square;
● BR - Conductor (US$ 150M): Is a banking-as-a-service infrastructure provider;
● MX - Konfio (US$ 143M): An unsecured online loans to SMEs;
● MX - AlphaCredit (US$ 125M): A digital credit provider for individuals and SMEs;
● BR - Acesso Digital (US$ 117.6M): A KYC provider using facial recognition and biometrics;
● MX - Albo (US$ 72.1M): A neobank for personal accounts;
● MX - Agibank (US$ 72M): A neobank for personal accounts;
● MX - Bitso (US$ 66.4M): A cryptocurrency exchange;
● BR - GuiaBolso (US$ 66M): PFM and lending, similar to Mint;
* Only equity deals were considered

Source: Crunchbase and startup press releases

Thiago Paiva
INVESTMENTS

Thiago Paiva
Investments in Latin America
Since 2011, venture capital investment
in Latin America has boomed,
achieving more than 150% average
compound annual growth until 2019.
Even though 2020 startup investment
data in the region isn't available yet, in
2019, the region reached a total of US$
4.2 billion raised in 430 equity deals.

On the fintech market, even with the

pandemic, the investment in 2020
slightly overcome 2019 with US$ 3.12 B.
In the first quarter of 2021, the region
raised a total of US$ 1.47 B.

Source: Data from LAVCA (2011-2018), Crunchbase (2019) and proprietary data
Thiago Paiva
Total Investments in the Region

Latin American fintechs raised a total of US$ 1.47 B (US$ 1.22 B in equity and US$ 248 M in debt) in 41 deals
in the first quarter of 2021.

Source: proprietary data from deals Thiago Paiva

Number of Equity Investments per Country
In the first quarter, Brazil is keeping the
lead in investments in the region with
48.6% of all the deals in the region, a small
decrease from 53.5% last year.

Mexico (25.7%) and Colombia (14.3%)

established themselves as the second and
third most active markets in the region,
respectively.

Source: proprietary data from deals Thiago Paiva

Volume of Equity Investments per Country

Considering the volume of investments, the

Brazilian fintechs are dominating with an
impressive 85.8% of all the disclosed
investments in the region while Mexico
remained in the second position with 9.6%.
Colombia followed with 3.2%.

Source: proprietary data Thiago Paiva

Volume of Equity Investments per Month

The number of deals were similar across the first 3 months of the year but January and March saw
the most amount of money due to two mega rounds in those months.

Source: proprietary data Thiago Paiva

Equity Investment by Industry Segment

In 2020, Payments & Remittances and Digital Banking were the most actives with 19 deals each
(16.7%) but digital banks raised most of the total amount raised with US$ 1 B, representing 38.4% of the
total. This first quarter, consumer lending fintechs had the most activity but with digital banking
(39.2%) and Mortgage and Real Estate (39%) competing as the most funded segment

Source: proprietary data Thiago Paiva

TOP 5 Deals and Unicorns

This year, we started with gigantic rounds from two of the most valued fintechs in the region: Nubank
raised an additional US$ 400M at an impressive US$ 25B valuation while the proptech Loft raised the
highest amount with an astonishing US$ 425M round. This first quarter, we saw no new fintech unicorn
in the region.
Source: proprietary data Thiago Paiva
TOP 5 Deals - Share of Equity Investments

As we have consistent seem, the total amount raised on the top rounds outweigh all the other
investments. This quarter, the TOP 5 equity rounds raised 75.9% of the total equity raised.

Source: proprietary data Thiago Paiva

Debt Financing Deals

On the debt side, Brazil also led in the region with US$ 140 M and Mexico followed with US$ 108 M,
representing 56.5% and 43.5% of all debt round raised. The highlight here are Trademaster raising US$ 100 M
from BV and Konfio getting an additional US$ 60 M credit line from Goldman Sachs.

Source: proprietary data Thiago Paiva

Merger & Acquisitions

Thiago Paiva
Merger & Acquisitions
In the first quarter of 2021, we saw 5 M&A deals in the region,
all of them in Brazil, in a total of US$ 62.2 M disclosed.

The two most relevant were:

● The acquisition of Konduto by the credit bureau
Boavista by US$ 31.1 M
● The merge of Geru and Rebel forming the largest
unsecured lending in the region, Open Co.

Source: proprietary data Thiago Paiva

FINAL THOUGHTS

Thiago Paiva
Final Thoughts
Even though the year 2020 was a quite challenging one for everyone worldwide, especially in Latin America, the
region saw a record breaking amount of fintech investments.

This year, the pandemic is hitting even harder the region with Mexico and Brazil as two of the most affected
countries in the world. Even with all that struggle, the region is keeping the strong pace and attracting more and
more attention from global investors.

The renowned fund Andreessen Horowitz recently wrote an article about Latin America’s Fintech Boom,
highlighting the opportunity on the region; therefore, we should expect more and more investment from them
around here as well as from other global investors that should follow. As I wrote in 2018, Latin America has the
perfect storm for the rise of the fintechs.

I expect Latin America to keep attracting record breaking amounts of fintech investments this year even with
the COVID-19 pandemic keeping hurting the region. Even so, the vaccination effort can restart the economy in the
region by the end of the year and setting the path for the fintechs in the regions to keep the strong pace in 2022.

Thiago Oliveira de Paiva

Thiago Paiva
RESOURCES

Thiago Paiva
Materials by the Author
● Report:
○ Fintech Investment Report Latin America 2019
○ Fintech Investment Report Latin America 2020
○ Banking and Fintech Market in Latin America 2019
○ Fintech Investment Report Latin America 1H2019
○ Fintech Investment Report Latin America 3Q2019
○ Fintech Market in Singapore 2018
● Articles:
○ Techcrunch - The Emergence of Super Apps in Latin America
○ Techcrunch - The Battle to Become the Mexican Nubank Just Started
○ Techcrunch - A Look at Latin America's Emerging Fintech Trends
○ LatamList - Meet the Candidate to Become the Mexican Nubank

Thiago Paiva
Resources
● Andreessen Horowitz - Latin America Fintech
● Latin America Digital Transformation Report 2020
● LAVCA Report - Latin America Startup Heatmap
● GSMA Intelligence Report - The Mobile Economy Latin America and the caribbean 2018
● Finnovista Fintech Radar Mexico 2020
● Fintechlab Fintech Radar Brazil 2020
● Finnovista Fintech Radar Colombia 2019
● Finnovista Fintech Radar Argentina 2018
● Finnovista Fintech Radar Chile 2019
● ALLVP - Early Stage VCs Active in Latin America
● Crunchbase
● EY Fintech Adoption Index 2019

Thiago Paiva
Fintech Radar - Mexico

Source: Finnovista Fintech Radar Mexico 2020

Thiago Paiva
Fintech Radar - Brazil

Source: Fintechlab Fintech Radar Brazil 2020

Thiago Paiva
Fintech Radar - Colombia

Source: Finnovista Fintech Radar Colombia 2020

Thiago Paiva
Fintech Radar - Argentina

Source: Finnovista Fintech Radar Argentina 2018

Thiago Paiva
Fintech Radar - Chile

Source: Finnovista Fintech Radar Chile 2019

Thiago Paiva
THANKS FOR READING!
Please, don't be shy and share this material!

Follow me at: @ThiagoPaiva

ThiagoPaiva

Thiago Paiva