Weekly update #34
Up to 24th June, 2024.

Weekly update #34

Michele Mattei Michele Mattei

Michele Mattei

Fintech expert | Manager | Investor | Advisor

Published Jun 24, 2024
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Welcome to this edition of the weekly newsletter. The idea behind this activity is to gather all the information in the startup ecosystem in one place, with a special focus on the fintech market.

Before jumping to the main piece of content I’ve read this week, a quick note from my side. On Tuesday 2nd I will be the guest of Agicap to talk about banking connectivity and how PSD2 ties in with the ERP industry. You can watch the live broadcast here.

Coming back to us, I’ve been reading a very interesting report about the Latin America fintech market named “Fintech en America Latina y el Caribe: un ecosistema consolidado con potensial para aportar a la inclusion financiera regional”, by Finnovista and IDB Invest .  

Someone a while ago asked me if I had to choose two regions where to invest in fintech, which ones I would have selected. And my answer was pretty quick: Latin America and MENA. Recently, I am trying to study a little bit more the first one, in order to understand the dynamics of this market. In this report, which you can read in full here, there is a complete study of the last 6 years of this industry in that region.

Between 2017 and 2018, there was a notable 66% increase in the number of companies, reflecting a rapid adoption of financial technologies. From 2018 to 2020, sustained interest fueled a 57% growth. However, the following years showed a moderation in the growth rate, decreasing from 35% in 2021 to 23% between 2021 and 2023. This progression is typical of emerging markets, which after an initial phase of rapid adoption, enter a maturation phase characterized by more stable growth.

An analysis of year-on-year growth between 2017 and 2023 shows a trend towards consolidation. During the 2017-2021 period, the sector grew by 253%; by 2023, this figure had reached 336%, demonstrating the sector's capacity for sustained growth over time. The average annual growth rate of the ecosystem was 34% from 2017-2021, then settled at 28% in 2023. This phenomenon reflects a stabilization of the market towards long-term solidity and resilience.

During the analyzed period (2017-2023), the segments of Payments and Remittances (632 companies, 21% of the total in the region), Lending (591 companies, 19%), and Enterprise Financial Management (413 companies, 13%) remained the undisputed leaders. These segments continuously held the top three positions, experiencing average annual growth rates of 24%, 31%, and 28%, respectively.

The Financial Institution Technology segment (368 companies, 12%) rose from sixth place in 2017 to fourth place in 2023, with an average annual growth rate of 34%, indicating a significant integration of innovative digital solutions into the traditional financial sector. Meanwhile, the emerging segments of Insurtech (169 companies, 6%) and Digital Banking (94 companies, 3%) have shown the highest growth rates, with average annual increases of 35% and 45%, respectively. This growth highlights the expansion into adjacent industries and a broader, more diverse range of digital banking experiences, underscoring a trend towards integrating financial solutions into everyday life.

In 2023, Brazil and Mexico remain the leaders in the fintech sector, hosting 722 (23.53% of the total) and 618 (20.14%) companies, respectively. Together, these markets account for nearly 44% of all fintech companies in Latin America and the Caribbean (LAC). They are followed by Colombia with 409 companies (13.33%), Argentina with 312 (10.17%), and Chile with 305 (9.94%), which together represent 33.44%. In other words, these five countries concentrate 77.1% of the region's fintech companies.

Peru (5.31%), Ecuador (3.03%), the Dominican Republic (2.12%), Uruguay (1.69%), Costa Rica (1.56%), and Guatemala (1.11%) show emerging growth, collectively accounting for 14.8% of the total. Lastly, the group comprising Panama, Bahamas, Paraguay, El Salvador, Bolivia, Jamaica, Honduras, Venezuela, Belize, Barbados, Nicaragua, Guyana, Haiti, Trinidad and Tobago, and Suriname represents 8.1% of the total.

But the domestic market is only part of the equation. The Latin America market is pretty wide, and fintechs try to go international as fast as they can. The analysis shows how Mexico is the favorite destination, with 30,94% of companies expanding there, followed by Colombia and Chile with 18,56% and 9,65%. Both of them implemented very friendly regulations for startups in fintech. Something very interesting to note here: Brasil, by far the richest market in the country, is way down in this category, and my feeling here is that many companies fear the big elephant in the room there, Nubank .

To summarize, I strongly believe Latin America to be one of the greenest fields for fintech to proliferate in the world at the moment, for multiple reasons. From the number of unbanked people, to overall population, to low entry barriers and lack of high investment, this could be a new Eldorado for financial companies.

Before jumping to the latest news, a quick request from my side. I will start a small series of podcasts to interview fintech founders and VC managers active in the ecosystem. If you want to be part of it, feel free to drop me a line on Linkedin!

Anyway we saw some very interesting news in the market this week. Apple shocked the market this week discontinuing Apple Pay Later, its BNPL feature, because is planning to introduce an installment feature. Mubadala a is trying to sell wefox , but facing blockers from the founders. Revolut ut introduced a loyalty program, and can face a $40 billion valuation in an internal stocks sale for employees. In the VC industry, General Catalyst is expanding in India through a merger with Venture Highway , while Wind and Breega raised respectively $90 and $75 million. In the italian market, we saw Swan opening an office in Milan and Finom launching italian Iban, while Banca AideXa closed a $16 milion funding round. Finally, some very interesting funding rounds from fintech startups like Clip , Ramify , Finaloop , BayaniPay , Spiko , Zilch , Amartha , CleverCards and many others.

But let's take a closer look at the main news of the last seven days:

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Closed deals

Insights on the VC industry

News on the market

A special look in the Italian market

And here some useful resources for everyone involved in the ecosystem:

Events you don’t want to miss

You have a cool event you want to mention or to sponsor? Feel free to send me a DM.

Startups raising funds

  • Fantalegends - a Fantasy Football free-to-play mobile game that aims to provide an enjoyable and safe experience, user-centered, with more than 2k daily active users. Raising $1M.

  • PopulaRise - The platform that allows companies of every dimension to promote themselves on social media through the collaboration with their clients. B2B2C SaaS. Raising $1M.
  • Bitcoin People - Fintech company focused on crypto payments between corporate and cross countries. B2B, SaaS. Raising $500k. Round closed!
  • Tutornow - Edtech that provides an online tutoring platform for students with learning disorders. Raising $500k to $1M.
  • Recivu - Fintech  startup trying to digitize the receipt flow by getting rid of papers. Looking for $150k in SAFE, already $50k committed.
  • Weagle - B2B Tech startup that provides the very first browser designed for company, with total security for sensitive data. Raising $6 millions for their seed round.

  • Reach Finance - Reach is the fintech platform for wealth accumulation for the Y&Z generations, they provide users with the tools to build wealth such as a budget tracker, a financial plan and a systematization of investments. Looking for $700k, with already $500k committed.
  • wrapp.ai - A fintech startups that offers a virtual accountant and CFO that can help SMEs scale globally. Looking for $1 million, $750k already granted from public funds, looking to close the last $350k.
  • Shoppy Code:Gift card platform that offers a points based loyalty program. They share part of the profits coming from marketing budgets with their customers. Raising $500k.

You want to be present in this list? Feel free to shoot me a DM on Linkedin.

Take also a look at the last edition of the newsletter, Weekly update #33

Finally I am exploring partnerships with the newsletter. So this edition is sponsored by Notion , which is offering a 6-months free plan of its plus product to all founders submitting an application for their startups program.

In order to redeem the free trial, submit an application using this link https://ntn.so/michelemattei, select Michele Mattei as partner and include the following partner key: STARTUP4110P62416. I really hope it will be helpful for many founders out there!


Weekly update on Fintech Weekly update on Fintech

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