Historically speaking, Latin America has always been challenged economically and politically, which held the region back from technological advancement. But today, Latin America is the hottest FinTech market in the world, and in this article, we’ll tell you why.
FinTech investments are growing at a record breaking rate in Latin America. We’re talking about a region that is now home to more than 20 unicorns. In a nutshell, this comes down to 3 primary reasons: right time, right place, and right people.
The World Bank reports that 135 million people in Brazil, Colombia, and Mexico alone were unbanked in 2017. At the same time, the region had massive mobile internet usage. In 2019, there were 343 million mobile internet users in Latin America. That number is expected to increase to 424 millio n by 2025
But there is a silver lining here, the combination of a largely unbanked population with the massive consumption of mobile apps provides a perfect environment for FinTech platforms. So can you imagine the market potential for Fintech projects in this region? We would say the sky's the limit!
The combination of a largely unbanked population with the massive consumption of mobile apps provides a perfect environment for FinTech platforms
The fintech startup and venture scene is unsurprisingly booming as global investors are piling in, to back the new successes in the region.
Most of this success is driven by megarounds which made up almost 70% of the funding in 2021. It’s worth to mention that this number of funding rounds is higher than ever
Megarounds made up almost 70% of Latin America's funding in 2021.
Fintech investments in Latin America also account for a stunning 37% of all VC funding in the region, compared to 26% for Europe and 17% for the US. And don't get us wrong, Fintech funding in Latin America is definitely still lower than in Europe and the US, but it is growing faster than ever and has even surpassed South East Asia.
Amongst the FinTech frenzy in Latin America, banking, payments and lending have definitely been the superstars in the region. However, crypto, mortgages and wealth management are also making their way up the biggest FinTech sectors in the region.
We obviously cannot talk about the Latin American FinTech success story without mentioning NuBank. The neobank which has certainly driven the world’s attention to the LatAm fintech scene. It also lately turned to profit, which is very rare for a challenger. And we wonder how much the bank contributes to the fintech success in the region.
What fintechs do you think are the biggest contributors to this success?
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