13 FinTech Startups Disrupting Latin America
By: Katie Griffing, Co-Founder and Head of Operations at Launchway Media, a digital marketing agency that creates customized marketing strategies for Latin American and global startups. twitter: @ktagriff
According to the World Bank’s Global Financial Inclusion Database, only 51% of the population in Latin America and the Caribbean has a bank account. However, the largely unbanked population in Latin America is undergoing a transformation thanks to friendlier policies for digital money and financial inclusion as well as innovation solutions offering alternative solutions to traditional banking.
Finnovista reports there are more than 1,000 fintech startups in Latin America innovating across all financial services — from payments and lending to crowdfunding and wealth management. Traditional banking entities are also turning to fintech solutions to reduce their costs and reach untapped markets. Today, Latin America is building a vibrant fintech startup scene, with a number of ventures emerging as regional leaders. Here’s a look at the fintech startups in Latin America with the most potential for success, from early-stage startups on the rise, to more established names.
1. Ripio (Formerly BitPagos)
Founded in Buenos Aires, Argentina in 2014, BitPagos has attracted a lot of attention and recently closed a $1.9 million Series A round to expand its bitcoin and digital payment services in South America. On the back of its recent funding, the startup also renamed itself to Ripio — the name of its bitcoin wallet and credit service — as it shifted its focus to its consumers-facing services.
In 2017, Ripio has set its sights on expansion across not only South America but also Mexico, its primary location expansion site for the first quarter of this year.
2. Afluenta
Afluenta is undoubtedly one of the leading peer-to-peer lending networks in Latin America. Founded in Buenos Aires, Argentina, the company recently completed its Series B round of funding from the International Finance Corporation (IFC), and Elevar Equity, a leading impact venture capital firm, who each invested $4 million. As Afluenta plans to use the money for its regional expansion, we’re certain to see the company continue revolutionizing the financial markets by making finance cheaper and more accessible than traditional banks in emerging markets.
According to Salem Rohana, IFC country manager in Argentina, Chile, Paraguay, and Uruguay, “Afluenta has built a world-class technology and solid track record in the challenging Latin American economies to demonstrate that the peer-to-peer business model works and efficiently delivers value to both borrowers and lenders.”
3. Mesfix
Mesfix is a Colombian-crowd factoring marketplace that connects small- and medium-sized businesses with investors, helping them improve their cash flows by allowing them to sell pending receivables at a discount to Mesfix community members. Over the past few months, Mesfix picked up the grand prize at Santander InnoVentures’ fintech event in São Paulo and was selected as the winner of the Seedstars World Colombia competition.
4. Bitso
Bitcoin adoption continues to rapidly accelerate in countries like Mexico, where a large population is said not to have bank accounts. Because of this, Bitso, the first bitcoin exchange platform in Mexico, is making big waves as an easy way to perform bitcoin transactions with the Mexico peso. The company has distinguished itself from the competition in the bitcoin trading space by providing customers with the highest levels of security and professionalism.
In addition to bitcoin, Bitso also operates a traditional currency exchange with a central limit order book, utilizing the Ripple network to make transfers. The startup has raised at least $4.35 million to date, and currently has 20,000 customers processing an average $2.5 million worth of transactions a week, according to Coindesk.
5. RecargaPay
Brazil’s leading mobile payments platform for everyday purchases, RecargaPay, lets users top up their phone credit via mobile, pay their utility bills, and send money to friends and family — eliminating the need to queue up and make these transfers in person.
Founded in Argentina, based in Miami, and with Brazil as its largest market, RecargaPay has raised around $8 million to date and was recently selected as part of MasterCard’s Start Path Global program 2016 as it continues to expand into financial services for the unbanked.
6. QueroQuitar
QueroQuitar is a Brazilian startup that provides financial planning services and allows consumers to locate, negotiate, and repay all of their debts in a better way. The startup was recently selected for the Wayra accelerator program and came out on top at the Seedstars World Brazil competition.
QueroQuitar is dedicated to helping consumers solve their financial problems through a friendly, online service. The secure, private online platform is accessible at any time of day so customers can get the information they need when they need it. It was also selected to participate in the Bradesco innovation program, operated by Brazil’s largest national bank and 3rd largest company.
7. Nubank
Nubank, one of the leading fintech companies in Brazil, is making startup history. The company has an estimated three million customers and recently completed an $80 million funding round led by DST Global. Nubank also took home the ‘Marketers That Matter Award’ in Silicon Valley, an award that goes to highly innovative marketing teams (past winners include Google, Netflix, and GoPro), making it the first Latin American company to do so.
The company is now rapidly expanding the adoption of its services throughout Brazil with its no fees credit card that charges a monthly interest rate depending on a customer’s credit history.
8. Kueski
Kueski has grown seven times annually since its launch in 2012 with its service that offers real-time, micro loans to Mexican consumers. In April 2016, the Guadalajara, Mexico-based startup nabbed the largest fintech investment in Mexico’s history, $35 million.
The massive Series A funding, led by Richmond Global Ventures, Rise Capital, the CrunchFund, and Variv Capital, has enabled Kueski to advance its leadership in Latin America and it is definitely one to watch as the startup continues to position themselves as the leading online lender for the middle class in Mexico.
9. Conekta
Conekta, another leading online payment company in Mexico, closed a $6.6 million Series A funding round in October 2016 and is moving quickly to consolidate its position in the online payments industry in the country.
Founded in 2012, Conekta provides a variety of online payment methods and antifraud tools to Internet businesses in emerging economies. It enables businesses to create a payment solution with their own design for any app or website, which in turn, allows more businesses to accept online payments from their customers successfully.
10. Bit.One
Banco Bradesco, one of Brazil’s largest banks, is implementing new digital wallet and mobile finance solutions that leverage blockchain technology for payments and money transfers. One of the technologies they’ve chosen to work with is Bit.One.
Based in Rio de Janeiro, Bit.One is a blockchain solution for cross-border payments. It provides users with a set of bitcoin-related products and services such as a prepaid debit card, a mini ATM machine, and a complete cryptocurrency solution that includes a bitcoin wallet and an innovative exchange platform.
Bit.One was accepted into the bank’s InovaBRA 2016 class and selected as the first runner-up at the Seedstars World Brazil competition. To better serve customers, banks must consider working with startups to innovate and discover the full potential of new technologies. The partnership between Bradesco and Bit.One will definitely be one to watch.
11. Kubo.Financiero
The micro-finance company that connects regional lenders with borrowers, Kubo.Financiero, aims to help consumers receive better interest rates on their loans. Coming off a $7.5 million Series A funding round led by Bamboo Finance, the company is accelerating the growth of Kubo’s highly-disruptive model to promote the personal and economic development of its customers.
Bamboo Finance’s investment director for Latin America, Bernhard Eikenberg, commented,
“By combining technology and data, Kubo connects credit applicants with high-quality investors, making them a more accessible financial service and will reach new markets.”
12. Konfio
Konfio grants small businesses in Mexico loans of up to 150,000 pesos to help them grow their operations and develop their businesses, with competitive rates and through an online process. During its first two years of operations, more than 200,000 businesses across Mexico approached Konfio to apply for a loan. This technology-driven approach to financing also led Konfio to secure an $8 million investment in May 2016 to strengthen its operations and grow its user base across the country.
Small businesses represent roughly 95% of businesses in Mexico and have not been a priority for larger financial institutions, and fintech solutions like Konfio are safe bets in the coming year.
13. PayClip
Mexico’s PayClip, developers of a card reader that enables users to accept credit card payments through their smartphones and tablets, has drawn many comparisons to Square in the United States. The startup is on a mission to level the playing field for small-to-medium sized businesses in Mexico by allowing any individual or business to take all card payments via its proprietary card reader and Apps for the iPhone, Android, and iPad devices.
With $8 million-plus in funding, PayClip is bound to be a major driver of commerce in emerging markets by empowering businesses to grow through seamless point-of-sale experiences.
The fintech startup landscape in Latin America is intensifying as more and more startups are redefining the rules of banking and financial inclusion in the region. And as the number of mobile-first consumers and investments in Latin America’s fintech startup continue to rise, there’s no doubt the region will become an increasingly large force to be reckoned with on a global scale.
Want to know more?
If you happen to be in Europe in April and would like to hear more about these trends, consider joining the Seedstars Summit on April 6 in Lausanne, Switzerland. There will be a workshop dedicated to disruptions in fintech in emerging markets that will impact how you live and do business — regardless of where you’re based. Check it out.
