Taking advantage of the health situation where consumers discovered greater speed as well as reliability in electronic commerce and payments, many FinTechs are looking to expand to neighboring territories in search of scaling into new business markets.
According to the consumer habits measurement company Nielsen, the frequency of online purchases increased by 250% among users in Latin America, in parallel with a greater demand for digital financial services.
In this context, looking for possible local allies that allow identifying the competition and consumption characteristics of each country, becomes essential for FinTechs that seek to enter new markets.
Currently, 1,858 startups are identified in the Fintech ecosystem in Latin America, of which Brazil and Mexico are awarded 53%, according to Finnovista data.
Until June 2020, Latin American FinTechs raised a total of US $ 525M (US $ 249.3M in the capital in 74 operations in the first half of 2020), according to Latam Fintech Hub.
This was also driven by the rise of digital financial systems to which millions of Latin Americans had to integrate to keep their transactions up to date.
Mexico continues to stand out as one of the most attractive markets for FinTech investment due to its legislation, large population size, dissatisfaction with traditional financial entities, and social characteristics. Only during 2020 did FinTech arrive in this country as Nubank from Brazil, Ualá from Argentina, and Venio from the Philippines.
Also, according to data from KoreFusion Brazil, it represents 77% of total investment in the Fintech sector in Latin America during 2020, and also stands out as the country with the most unicorns, eight of the 10 most valuable in the region.
On the other hand, Colombia stands out in the FinTech ecosystem as the third market in Latin America in the development of fintech initiatives, below Mexico and Brazil as well as the 14th nation in the world. In the latest Finnovista Fintech Radar study, 200 startups were identified with an annual growth rate of 26%.
Among the main markets that report the highest investment growth in the FinTech ecosystem are: electronic payments and remittances, loans, business finance management, and crowdfunding.