Latin American financial technology startups are getting attention from market participants who see potential in the region.
Another Lending Business Raises Millions
Brazilian lending business Creditas has raised $255 million in fresh financing - following earlier financing that raised $570 million.
Those that paid in were Sunley House Hospital, Tarsadia Capital, LGT LiThose, e.ventures and Wellington Management.
The lending business already has SoftBank, Amadeus Capital Partners, VEF and SoftBank Vision Fund 1 on its investors list among others - further cementing the company's potential in managing the demand for technology-powered financial services in the region.
Creditas saw 139 deals this year. Industry analysts said the interest in the region's financial technology efforts was expected to keep growing in the coming years.
European Startups Exploit Latin America's Growing Market
Latin America is a growing market in financial technology services - prompting startups from Europe to view the region as a potentially lucrative farm of demand.
One is ID Finance, based in Barcelona. The consumer lender now has 490 employees spread across both Latin America and Europe.
Earlier studies estimated that around 70% of Latin America's population does not have accounts with traditional banks, indicating the need for better financial services that do not require in person contact or in-bank transactions.
Other European financial technology companies that are already operating in Latin America include SalaryFits, Prodigy Finance, Creamfinance, Microwd, WorldRemit, Azimo, TransferGo and more.
Increased Connectivity Opens Opportunities
The World Bank said in its latest report of Latin America's internet connectivity that almost 70% of the region's population now has access to the internet.
The improvements in internet connectivity, as well as increased use of smartphones, has opened doors for the financial technology industry to expand its vision in the steadily growing market.
Strategy consulting company KoreFusion said in its LatAm Financial Technology Report 2020 that around 90% of investments in Latin America's financial technology ecosystem went to digital banks, virtual lending and financial technology payment segments.
The report also found that the drivers for financial technology growth in the region are Latin Americans' adoption of e-commerce, growing smartphone ownership, advancements in digital services infrastructure, and reports about some people being unsatisfied with the service they receive from traditional banks.
So far, Brazil accounts for the highest concentration of financial technology activity in Latin America, with 33%, followed by Mexico, with 23% and Colombia, with 13% of concentration.
