$15.8 million in fintech funding

Hola amig@s fintech,

Feliz domingo tod@s!  Anyone catch this gem on SNL last night?  Que risa 😆

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.  

💛 Until next weekend. Até a próxima! - Team TWIF Latam

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📊 Stat of the Week

🦉 Tweet of the Week

💸 Venture Financing

There were 3 deals in the fintech space across Latam since the last post, with a total investment of $15.8 million.

💸Equity

🇧🇷 Payfy, the Florianópolis-based corporate card and expense platform, raised a seed round of $800,000, with investment from BB Ventures, Banco do Brasil's corporate venture capital fund.  Founded in 2018, Payfy serves more than 500 clients in Brazil, including LG, Havaianas, and P&G.

🇨🇴 Kala, the Colombia-based lending-as-a-service platform that enables financial institutions to launch and operate their own credit products, raised a $4 million seed round led by Cometa, with participation from existing investors such as Canary, Acrew, Clocktower and 99 Startups. This round brings Kala's total funding to $6 million.

🇧🇷 Z1, the São Paulo-based digital bank for teenagers, raised a $10.8 million Series B co-led by Homebrew, Parade Ventures, and Kindred Ventures with participation from Costanoa, Newtopia, and existing investors Y Combinator, MAYA Capital, Clocktower, and Gaingels, amongst others. Z1 currently offers prepaid credit cards to teens and will no expand its target audience to include young adults over 18 years old.

💰 Venture funds

🌐 Clocktower Ventures announced a $25 million fund dedicated to Latam fintech.  The Santa Monica, CA-based fund has invested in more than 90 companies in North America and Europe since inception in 2015.  The firm's current Latam portfolio includes Kushki, Flink, Habi, and Ontop.  Clocktower plans on investing in 40 companies in the region through the new fund.

☯️ Exits

🤝 M&A - Fintech

🇧🇷 DM, the Brazilian manager of private label credit cards, announced the acquisition of its competitor FortBrasil. DM is buying 49.9% of FortBrasil for an undisclosed amount in cash, subject to approval by the Administrative Council for Economic Defense. Simultaneously, DM is buying an option to hold 100% of FortBrasil after receiving approval from the Central Bank. The acquisition will create a company with a total of 9 million issued cards.

💻 IPOs & SPACs

🇲🇽 Covalto, the Mexican digital banking and services platform for SMEs, and Liv Capital Acquisition Corp II, a blank-check or SPAC company, agreed to extend their merger agreement, which will allow the fintech to be listed on the US stock exchange. The companies made modifications to the agreement, including the extension of the termination period from May 10, 2023 to February 10, 2024.

🚀 Product Launches & Partnerships

💻 Fintech

🇧🇷 Nubank, the Brazilian digital bank, launched NuConsignado, a payroll loan offer for federal public servants in Brazil. The service will be tested in a 100% digital experience, with rates varying based on the customer’s profile. Nubank has also expanded its offer of collateralized credit, allowing customers to use their investments as collateral.

🌐 Parra, the Argentinean SaaS, and Teip, the Salvadoran platform offering B2C solutions through a virtual wallet, announced a partnership to promote QR payments in Central America, with the aim of promoting financial inclusion. Parra Marketplace users will be able to expand their sales using Teip's digital wallet and QR payment solutions. Teip will begin operations in Guatemala, Honduras, and Costa Rica and already has 1,500 merchants on its platform.

🇨🇱 UPago, the Chilean fintech that simplifies payment and collection platforms for small businesses, announced it is expanding its payment and collection platform operations to Mexico and Colombia, with the aim of consolidating its position as a major player in the Latam recurring payments market. UPago provides automation and personalization of payment wallets, payment and bank reconciliation traceability, and preventive and delinquent collection management.

🏦 Financial Services & Banking

🇲🇽 Monterrey-based Banca Afirme announced a partnership withClara, the corporate expense management platform, to provide financing solutions to SMEs in Mexico. Banca Afirme will provide credit lines up to nearly $826,000 to Clara's clients, complementing the startup’s credit card and expense management products. The partnership aims to support over 200 businesses this year, with total funding of over $55 million.

🇧🇷 Meta Brazil announced the official launch of operations for individual to business WhatsApp payments after a three year wait for regulatory approval by the central bank.  Consumers can pay small merchants via WhatsApp with their credit, debit, and prepaid cards from Visa/Mastercard, 15 banks, and 3 acquiring companies, including Mercado Pago, Banco do Brasil, Bradesco, Santander, BTG Pactual, Neon, Next, and Nubank..

📜 Policy

🇦🇷 The Argentinian National Securities Commission (CNV) adopted a resolution aiming to encourage the development of innovative financial products by regulated entities in the capital market. The CNV plans to create a Bitcoin index using information provided by various price providers for the BTC/ARS pair, subject to the condition that they have a valid contract with a registered payment services provider in Argentina.

🇧🇷 The Central Bank of Brazil announced that it will focus on issues such as digital currencies and crypto, considering the launch of Real Digital, Brazil's CBDC. Additionally, the finalization of Open Finance, which enables customers to access banking products and services through different financial institutions, is also a priority.

🇲🇽Kushki, an Ecuadorian company that provides a payments platform for businesses, was appointed as a non-banking acquirer in Mexico by the mexican regulatory agency CNBV. The company acquired Mexican Billpocket last year.

🇲🇽The regulatory Mexican Banking Commission (CNBV) denied authorization to three companies, Koibanx, Efevoo, and JP 3 Financial (Paycaster), to operate as depository institutions (IFPE) due to breaches and inconsistencies in their requests. These companies are added to the 28 others previously rejected by the authority to operate under the Fintech Law.

📰 Other News

🇨🇴Nubank and Ualá, the two leading digital banks from Brazil and Argentina respectively, are facing challenges building a customer base in Colombia. Local competition, cultural preferences for cash, and limitations in the digital payments ecosystem are some of the hurdles they face. However, both companies remain optimistic about the market's potential and continue to roll out new products.

🇦🇷Ualá, the Argentinian digital bank, became the newest member of Colombia Fintech, the association that brings together the most important fintech companies in the country. Ualá aims to bring financial services to Latin America using a 100% digital, secure, low-cost, and easy-to-use solution. The company currently has more than 5 million users in Argentina, Mexico, and Colombia, and aims to reach more than 25 million users in the next 5 years.

🇧🇷The Brazilian Institute of Consumer Protection (Idec) notified Nubank about reports of fraud suffered by customers due to the hacking of their cell phones. The Institute has questioned how the neobank ensures consumer safety and sent a report on the functioning of the crime. Nubank sent an email alert to customers regarding the issue.

🇧🇷Kakau, a Brazilian insurtech, was granted authorization to begin operations as a digital insurance company, following its approval in the Superintendence of Private Insurance (Susep) sandbox in November 2022. Kakau can now issue its own risks for bicycle and smartphone insurance.

📚 Deeper Reads

How the SVB collapse helps DeFi

How alternative data is driving financial inclusion

Uruguay is losing its reputation as Latin America’s success story | The Economist

Look at Latin America. This Is How Democracies Fail. - The New York Times

Why Latin American Leaders Are Obsessed With TikTok | Time

In Latin America, Fiscal Policy Can Lighten the Burden of Central Banks

Adorable Puppy Refuses to Go For Walk Because Owner Forgot Treats

📖  Read of the Week

Made in Latam with 💛 by Daniela, Lorena, and Christine

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