Latin America

TWIF Latam Jan 28 - Mexico’s fintech ecosystem grew 26% last year

Rio de Janeiro advances plans to foster crypto usage including using digital assets to make tax payments. Source/credit: https://br.beincrypto.com/rio-de-janeiro-avanca-com-planos-da-criptomoeda-carioca/‌ ‌

$17.3 million in fintech funding (equity and debt)

Hola amig@s fintech,

29 days into 2023 - how’s it going so far? As TWIF continues to grow in the region as well as globally, we’d love your input. Would you take a couple of minutes to fill out this brief survey? Muito obrigada!

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!

Feedback? Reach out to us anytime! This week we're Andrea on funding, venture funds and read of the week; Daniela on exits and other news; Elena on stat, product launches & partnerships, and deeper reads; and Lorena on policy, quote, and editing.

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📊 Stat of the Week

As of 2023, Mexico has 650 fintechs identified in the Finnovista Fintech Radar, representing a 26% growth compared to 2021, with the lending and payments segment being the most representative.

📖 Read of the Week

Rockstart published a study on Why do Latin American Startups Fail. The four main reasons developed throughout the study are capital raising, product-market fit, the founding team, and the founder on an individual level. It gives an interesting human-centered approach to the consequences of startup failure.

🦉 Tweet of the Week

💸Equity

🇲🇽Zenfi and Yotepresto, the B2C lending platforms, collectively raised an $8.5 million round led by Magma Partners with the participation of Cometa, Redwood Ventures, Poligono Capital, Conny & Co., and an AngelList syndicate. The companies have a combined user base of 3 million, $100 million in loans with a default rate of 3.4%, and an ARR (Annual Recurring Revenue) of $10 million and are both founded by Luis Ruben Chávez.

💵 Debt

🇧🇷Juvo, the consumer lending platform, raised an $8.8 million credit line from SRM Ventures. The company loans between $170 and $1,120 and uses the customer's cell phone as collateral. If payments are delayed, the app can temporarily block the phone until the overdue payment is made. The company disclosed having originated over $71.5 million for 11 million Brazilians in the last 18 months.

💰 Venture funds

🇲🇽DILA Capital announced the second close of its $115 million fourth fund, having already invested in 11 companies. The firm plans to invest in 10-15 more startups, with initial investments between $1 and $4 million in pre-series A and series A rounds. Notable portfolio companies are Fairplay, Cicada, Mattilda, and Mezubo.

🇺🇸FJ Labs raised $260 million in a pre-seed fund and an opportunity-style "Series B and beyond" fund. The funds have support from family offices, institutional investors, and founders from LinkedIn, PayPal, Supercell, TransferWise, MongoDB, and Wayfair. Latam portfolio companies include Belvo, Buenbit, Habi, Cuenca, and Elenas, amongst others.

☯️ Exits

🤝 M&A - Fintech

🇲🇽Mendel, the corporate expense management platform, announced the acquisition of TeFacturo, the digital tax receipts company. This purchase will allow the validation of the invoices against the tax administration system of Mexico and the verification of expenses. Details of the transaction were not disclosed.

🚀 Product Launches & Partnerships

💻 Fintech

🇨🇱 Xepelin, the SaaS platform for SMES, announced the launch of its new product focused on international payments for exporting and importing companies.

🇵🇪Astropay, the UK-based payment solutions provider, announced the launch of a debit card in Peru, as part of its expansion to Latin America.

🇨🇱SumUp, the UK-based company that enables card payments at point of sale or on the go, announced the launch of its prepaid card in Chile.

🇦🇷123Seguro, the digital insurance platform, announced its arrival in Mexico after beginning the process to obtain an insurance broker license from the CNBV, regulatory agency.

📰 Other News

🇨🇱Jeeves, the expense management and credit card platform, announced that, as of February, it will no longer provide its credit card service in Chile, but clients can still use other fintech services. Companies that want to continue using their credit card must have operations in the United States, Brazil, Colombia or Mexico.

🇧🇷Bankme, the credit-as-a-service platform for SMEs, announced it will launch its first Credit Rights Investment Fund (FIDC). Their “mini bank” product allows companies to build their own financial structures.

🇲🇽Rumbo Ventures, the climate-tech firm, launched its first fund, looking to lead or co-lead from pre-seed to series A rounds with a value-add focus on each investment. Notable portfolio companies are Nilus, Cultivo, Thalasso, and Tycho.

🇨🇱Screen Capital announced a $20 million fund to invest in video games, VR, OTTs, XR, Apps.

📜 Policy

🇧🇷The Brazilian National Federation of Central Bank Employees’ Associations (Fenasbac) aims at finding new stablecoin, blockchain, and CBDC projects and solutions. So Fenasbac has opened the application process of the fintech acceleration program “Next” (on its second edition).

🇧🇷In Brazil, Rio de Janeiro authorities’ are the first ones moving forward to have their own local cryptocurrency. The municipal government published a decree so that companies interested in payment processes and crypto can apply to work together with the local authorities.

🇨🇱The Financial Markets’ Commision of Chile will close the consultation process for secondary under the Fintech Law. Mainly, those regulations are on the Registry of Service Providers, and on the investment advisors services.

🇨🇴The Financial Superintendence of Colombia authorized Bloom as the first supervised financial crowdfunding.

🇵🇾The Fintech Chamber of Paraguay is working on a Fintech bill project. The Chamber is formed by several Brazilian crypto companies, so the project will cover crypto mining and trading.