$175.9 million in fintech funding (equity and debt)

Hola amig@s fintech,

Big fundraising news week after a bit of a pause following Semana Santa.  For those who have Monday off for International Workers’ Day, enjoy the long weekend (and remember to take a break).  Happy May Day!

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!

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📊 Stat of the Week

📖  Read of the Week

In recent years, startups in LataAm experienced their first significant VC boom, in 2021 the region had 34 unicorns, however, as of 2022 they are experiencing their first real downward cycle. Capital volume has dropped, but is still 63% above pre-pandemic levels and is available primarily to early-stage startups.  The Latam Digital Report (2023), shows us an exhaustive investigation of the current context of startups in LatAm and what to expect for the following years.

🦉 Tweet of the Week

💸 Venture Financing

💸Equity

🇧🇷 EmpreX, the São Paulo-based consumer credit credit app, raised a $2.2 million angel round from investors such as Hugo Mathecowitsch of a55.  The funds will go towards hiring more engineers, branding and marketing.  The company uses open banking data to offer loans to middle-class Brazilian workers.

🇧🇷 DieselBank, the Brazilian credit platform for truck drivers, raised a $157,000 bridge (pre-seed) round from UniAngels.  The company has financed more than $7 million to over 20,000 account holders.  It also offers free digital accounts, debit cards, and cashback for gas.  

🇸🇻 Cubo, the El Salvador-based payments platform focused on SMEs, raised a $3.5 million seed round from BID Lab (IDB), Amador Holdings, Soma Capital, Latin Leap, and Seedstars, amongst others.  The startup offers micro, small, and medium-sized business in El Salvador and the Caribbean the ability to accept payments via point-of-sale (POS) devices as well as via links, QR codes and bitcoin.

🇧🇷 FinanZero, the São Paulo-based credit marketplace, raised a later-stage round of $1.5 million from undisclosed Swedish funds and family offices.  This is following a $4.1 million round in July of last year from VEF, Dunross & Co, Atlant Fonder and Webrock Ventures and a Series A round in 2021.  The company was founded by Swedish-Brazilian investment firm Webrock Ventures to provide personal, car, and home loans.

🇲🇽 Clara, the Mexico-based corporate expense management platform, raised $60 million in a Series B extension led by GGV Capital, with participation from new investors such as Acrew Capital, Citi Ventures, and Endeavor Catalyst, amongst others, as well as existing investors monashees, DST, General Catalyst, and Coatue.

🇲🇽 Fairplay, the Mexico-based platform offering revenue-based financing credit solutions, raised a $8.5 million Series A extension from existing investors such as DILA Capital, Elevar Equity, Speedinvest, Nazca, and Kayyak Ventures.  It also announced a $100 million debt facility from Community Investment Management (CIM) to continue providing financing options to e-commerce businesses.  Fairplay has originated more than $125 million in working capital loans since founding in 2019.

☯️ Exits

🤝 M&A - Fintech

🇧🇷 Belvo* announced the acquisition of Skilopay, the Brazilian provider of Pix solutions, in order to accelerate the Spanish firm’s expansion into Brazil.  This complements its status as a Payment Transaction Initiator (TPI), for which it received authorization from the Brazilian Central Bank last year, and is meant to enable account to account payments.  Details of the transaction were not disclosed.  This is Belvo’s first acquisition.

🚀 Product Launches & Partnerships

💻 Fintech

🇧🇷 InComm Payments, the US-based end-to-end payment platform, launched InComm Payments Brazil Technology Ltda, an IT hub in Brazil focused on developing payment solutions for retail, financial services, and mobile payments. The new hub aims to create opportunities for students and professionals to enhance their skill sets and explore new career possibilities.

🌎 IXOPAY, the European payment orchestration platform, and EBANX, end-to-end payment platform, announced a partnership to provide global companies with access to local payment solutions in Latam. The partnership aims to improve accessibility to new regions and enable the growth of international merchants by offering local payment methods to consumers in the Latam region.

🇨🇴 Resuelve tu Deuda, the Mexican platform focused on over-indebtedness, announced the launch of Go Bravo in Colombia. The company has evolved to offer a complete range of easy-to-adopt products and services to help more people return to financial stability.

🇨🇴 SoyYo, the Colombian platform providing personal digital identity services, announced a partnership with DataCrédito Experian to offer Colombians free monthly access to their credit score through their app. The app also allows users to verify their identity digitally, view a summary of their open accounts, and receive notifications about new financial obligations to detect fraud or identity theft.

🇦🇷 Personal Pay, the Argentinian virtual wallet of Telecom, announced a partnership with OpenPass to boost the fintech market, with a strong focus to offer B2B solutions to new markets, expanding its presence in Argentina, Paraguay, and other countries. Personal Pay has introduced a new functionality that allows users to generate daily profits with the money deposited into their accounts.

🇲🇽 Bitso, the Mexican crypto exchange, and Despegar, the Latam online travel agency, announced a new rewards program with crypto, allowing travelers in Despegar's "Pasaporte Despegar" program in Mexico to redeem their points for crypto that will be automatically credited to their Bitso wallet.

🇲🇽 Nu Mexico announced Guaranteed Card, a new type of credit card to facilitate access to credit for individuals without a credit history or with low credit scores, using a reserved amount from the user's Nu account as a guarantee. With 3.2 million customers and an annual growth rate of 129%, Nu aims to improve financial inclusion in Mexico.

🏦 Financial Services & Banking

Chubb, the European insurance company, and Betterfly, the Chilean digital health and insurtech company, announced a new financial protection product for SMEs in Latam. The new product aims to democratize access to financial protection for millions of people in the region which only needs to be paid when it's used.

🇵🇪 BBVA and Kavak, the Mexican platform for buying and selling certified pre-owned cars, announced a partnership to finance used cars in Peru, aiming to provide a safe and trustworthy platform to access car loans to purchase used vehicles. The partnership will offer customers a catalog of over 350 verified used cars and a range of financing options from BBVA, as well as personalized attention and discounts for financed car purchases.

📜 Policy
🇧🇷 The Brazilian Ministry of Finance announced that it will introduce a bill to Congress to make it easier for financial institutions to obtain the regulator’s authorization to operate. This will positively impact the fintech and traditional financial sectors, opening more the space for authorized operations and increasing competition.

🇨🇴 Colombia’s new government has sent to Congress its National Development Plan 2022-2026, which will delineate this administrations’ priorities and programs and contains relevant Open Finance provisions. If the Plan gets Congress’ approval, it will consolidate Open Finance through two articles that address data openness and portability of financial accounts and products.

🇲🇽 The president of the House’s Committee of Science, Technology and Innovation introduced a bill seeking to create a Cybersecurity Law. The bill’s draft has been under discussion between the private sector, government agencies, and Congress. The Army, Navy, and National Guard have participated in its elaboration. Critics argue that the bill promotes militarization, and claim that it shows a lack of understanding of basic digital human rights, technology, and the digital economy.

📰 Other News

🇧🇷 Justos, the Brazilian insurtech, raised $5.5 million (post-Series A) bridge round from an unnamed reinsurer.  The platform offers auto insurance using machine learning to create more personalized products.

🇧🇷 Nubank, the Brazilian digital bank, reported that its customer base grew 33% year over year reaching 79.1 million clients in Q1, making it Latin America's largest fintech. Of those clients, 75.2 million are in Brazil, while the remaining clients are in Mexico and Colombia. Nubank's user base in both countries grew by 66% in the same period.

🇲🇽 Flink, a Mexican investment app, conducted a survey and found that 70% of young people in Mexico (18 to 36 years old) invest through fintech products and companies. Their main motivation is to have a better retirement or to acquire real estate, and the most popular investment instruments are the stock market and government debt-related options. The survey also found that 67.5% of respondents prefer to invest their money, compared to 32.5% who prefer to save.

📚 Deeper Reads

In Latin America, Fintech is Driving Banking Innovation and Improving Financial Inclusion

Why Chinese Companies Are Investing Billions in Mexico

Even street vendors accept digital payments for avocados (ES)

How a Latin American startup can raise investment in the United States, without a network or 'pedigree' (ES)

Three out of four global banks plan to connect with fintechs in the next 18 months to drive digitalization (PO)

Fintechs created or led by WOMEN generate more income than those founded by men (ES)

🎙️  Listen of the Week

🌱 ClimateTech Corner by Daniela

Hey there! As we look towards a greener future, there's no doubt that ClimateTech will play a crucial role in achieving our sustainability goals. And while the demand for such innovations continues to grow, so does the need for funding to support their development. That's why we're excited to kick off this corner by delving into the world of climate funding.

Last year investment in ClimateTech accounted for 25% of all venture spending and investments, with start-ups in sectors responsible for 85% of emissions attracting 52% of climate tech investment. This represents overall aggregate funding of $260 billion since the start of 2018, over which more than US$50 billion has come in 2022.

However, research from The Rockefeller Foundation, BCG and Climate Policy Initiative reveals that this is still insufficient:

📉 Only about 16% of climate finance needs are currently being met, leaving a formidable gap to achieving net-zero emissions by 2050.

💰To achieve net-zero emissions, public and private sector entities across the globe will need approximately $3.8 trillion in annual investment flows through 2025. But only a fraction of this capital is currently being deployed.

📊 An estimated $3.4 trillion in mitigation finance is needed annually across sectors in 2020–2025.

📈Emerging markets and developing economies, excluding China, require approximately $1 trillion in climate finance per year but are currently receiving only 27% of necessary flows.

💸And to meet our climate objectives, climate finance must increase by at least 590% – to $4.35 trillion annually by 2030.

And do not forget to give us feedback on what topics you want us to cover for future editions. Let us know so we can make sure to deliver the content that matters most to you!

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

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