Chloé Novène
Investment Associate
ALLVP
/
Startup Contributor

Who Were the Most Active VCs in Spanish-Speaking Latam Fintechs?

By Chloé Novène | Wed, 02/10/2021 - 09:10

(Please note that this analysis excludes Brazil, and ranges from July 1, 2019, to Dec. 10, 2020)

It’s no secret that the fintech space in Latam has been booming recently. What would have been difficult to forecast when COVID-19 hit was that although many sectors had to be shut down to contain the pandemic, many startups somehow kept operating. It was “business as usual”  but with their face masks on.

It would have been even more difficult to anticipate that during this storm, investors would keep investing and betting on even more Latam startups than in the past. And yet, here we are. At ALLVP, we’ve been backing new fintechs more than ever. We’re bullish on their potential to help build the new normal, and we’re obviously not the only ones.

Our Research

Who has been supporting the shakers and shapers of the future of financial services? Here is our overview of the most active investors in fintech in Spanish-speaking Latam since July 2019:

allvp

The list of active VCs in the region has grown impressively since we started this research a few years ago, as well as the number of startups financed. In the past 18 months, fintech startups have raised more than 75-plus different funding rounds.

Kudos to all the amazing founders re-shaping financial services in Latam, like Konfio, Bitso, Fondeadora, D-local, FINTUAL, Sofia, ADDI, Belvo, Oyster, Alphacredit, and many more. 

Here are some of our key findings:

  1. 2020 marked Spanish-speaking Latam as a new strategic battlefield for international investors

Since we published our latest research on this topic in 2019, many non-Latam international investors, especially Americans, have entered the Latam fintech game. Accel, defy, Founders Fund, Gradient Ventures, Anthemis and Clocktower Ventures are some examples. This clearly demonstrates the increasing investor confidence in the region. 

We can mention some recent deals that illustrate the appetite of foreign investors, and the large amounts of capital that are currently being deployed in the region:

  • The battle between the neobanks has been fierce – and it’s not over yet. Many “wallet” players have raised record amounts of funding: Albo closed a $45 million round with Valar Ventures, Greyhound Capital and Mountain Nazca; Klar raised an additional $15 million round led by Prosus Ventures; and Fondeadora a $14 million round led by Gradient Ventures (Google), to name a few. At ALLVP, we had mapped this incredible wallet wave last year, and this surely deserves a big update.
  • Index Ventures made its first commitment to the region by backing the insurtech Sofia, alongside Ribbit Capital and Kaszek Ventures.
  • We were proud to back Flink alongside Accel Partners, Clocktower and Raptor Group in Q4 2020.

There is no need to mention that Brazil has been covered by these investors for a long time now, but what really has changed from ALLVP’s standpoint is how the Spanish-speaking countries, especially Mexico, are now considered. We saw Mexico truly take off as the strongest fintech ecosystem in the region in the past 18 months, followed by Colombia.

  1. Step by step, the ecosystem has been evolving and gaining structure

The list of VCs investing in seed and Series A has been growing, as the ecosystem evolved and started to get some structure over time. For example, the list of seed investors went from 25-plus to 45-plus in less than 18 months. At ALLVP, one of our wishes would be to see the list of “discovery” and angel investors keep on growing too – we still feel there is a lack of capital at this stage.

  1. Fintech is among the industries receiving the largest amount of investment dollars in Latam

These past months have confirmed fintech as one of the sectors (if not the leading one) receiving the largest amount of investment dollars in Latin America. 

One of the rationales behind this is surely the potential of fintech to really reshuffle the cards of financial inclusion in Latam. Nubank in Brazil demonstrated it well, reaching 25 million-plus accounts in 2020 across Brazil and Mexico. This example and simple facts such as the high number of people still lacking access to basic financial services in Latam confirm that fintech is now hotter than ever.

At ALLVP, we’re proud to have partnered recently with amazing fintech companies and entrepreneurs, such as Flink, FINTUAL and MIBO. As mentioned, we’re very bullish on the potential of fintechs to make a true impact for millions of people in Latam. 

We’re looking forward to what’s coming next.

Don’t hesitate to contact us to keep this research updated at cnovene@allvp.vc

To all Latam fintech founders, we’re actively investing, especially at the Series A stage. Feel free to reach out directly!

Photo by:   Chloé Novène