FIntech Investment in Latin America tripled over the last year

Around 15.3 billion dollars in funding was invested by Venture capitalists in Latin American firms during 2021

FREMONT, CA: In 2021, venture capitalists invested a record 15.3 billion dollars in Latin American companies, more than tripling the amount raised in 2020. According to the Financial Times, almost 75 percent of investments went to fintech, proptech, and ecommerce companies. Preliminary figures from the Association for Private Capital Investment in Latin America (Lavca) showed that VCs sponsored 650 acquisitions in Latin America in 2021. Six unicorns were formed in the fintech sector, accounting for 39 percent of financing. With 25 percent of the capital, ecommerce came in second, followed by proptech with 9 percent.

Mega-rounds, which accounted for about 70 percent of all investment in 2021, drove the majority of this, according to Dealroom. The top three hauls are as follows: The largest fundraiser in Latin America in 2021 was 1.15 billion dollars, which went to the Brazilian neobank Nubank. Nubank was valued at over 40 billion dollars when it began trading on the New York Stock Exchange in December 2021. Following that was eBanx, a payment technology company based in Brazil, which received 430 million dollars from Advent International. Ualá, a fintech super-app, has raised 350 million dollars in the largest private investment round in Argentina's history.

Latin America and the Caribbean now have a population of 663 million people spread across 33 countries. Brazil and Mexico, the two largest countries in the region, have populations of 210 and 130 million people, respectively, and GDPs of 1.8 and 1.3 trillion dollars. Despite this vast potential market, according to World Bank data, just 56 percent of Latin American customers hold traditional bank accounts. Latin American banks cater to the wealthy by enforcing rigorous underwriting guidelines that prevent a huge percentage of the populace from obtaining credit: Through 2019, the number of bank accounts supplied by traditional banks rose at a rate of only 3 to 5 percent per year.