1、Latin America is a giant.Our numbers speak for themselves:we have a GDP that surpasses US$5T,over 600 million habitants,and a territory that stretches from Tijuana to Tierra del Fuego.These big numbers also come with challenges to overcome.This could be a deterrent,but weve seen time and time again

2、that it works much like the opposite.Startup founders are diving head-first into opportunities as vast as The Amazon River,finding to borrow from our friends at NFX the fast-moving waters that allow them to use technology to build amazing solutions.Not just incrementally better ones,but rather marke

3、t-changing.This journey of discovery can be a solitary one,often with unexpected storms.When the skies are clear once more,how to know if youll spot a shore to explore?In this first edition of The LatAm Tech Report,we hope to provide new coordinates for your opportunity map.All of us in the startup

4、ecosystem have been seeing a brand-new Latin America.After more than two years of pandemic life,the leap in digitalization has persisted beyond global trendlines.And even though 2021 brought an atypical boom in the number of deals(and high valuations),the region keeps on thriving.Latituds opening le

5、tter2022 is already the second largest year for investment in LatAmPrivate Capital Investment in Latin America(USDb)Capital Invested(USDb)Number of DealsSource:LAVCA.Data as of September 30,2022.Note:Private capital investment includes PE,VC,private credit and infrastructure&natura resources.Latin A

6、mericas various industries feel this transformation,stemming from their customers new digital habits.So,we took a deep dive into the present and future of seven of these industries,which are also the ones that have been gaining investors attention the most in recent years:Fintech B2B,Fintech B2C,E-c

7、ommerce,SaaS,Proptech,Healthtech,and Climate tech.Through data analysis and interviews with experts in each industry,we aim to answer a few questions:Context setting:what happened in the past few years?Looking back at the challenges and the founders and investors that pioneered each industrys transf

8、ormation in the world and in Latin America is an essential step to understanding not only how weve arrived at the present moment but also how the future will play out.Trends:what are the common threads between segments and business models?Some industries follow trends globally,while others produce t

9、heir own regional trends.Taking into account new market needs and each verticals maturity stage and funding history,we highlight the macro and micro trends that presented the highest growth.Opportunities:whats next?For the founders and investors looking to the medium-term and long-term,weve also exp

10、lored what players in each segment can leverage:underserved markets,infrastructure gaps,new technology,behaviors,and more.And since there are two sides to every coin,we also present the challenges they will need to face in the following years.This report could be your first or just another step into

11、 this expedition.In every case,knowing the seas is essential to know when you should keep your hands on deck and when you should be fearless when navigating the tempest.For good captains,a rising tide is a chance to lift all boats.LatitudLatitud is building infrastructure to support the next generat

12、ion of tech startups in Latin America.From community to software,were creating a suite of solutions to help tackle the highest friction points for early-stage entrepreneurs starting companies in Latin America:About LatitudLatitud Go,an automated company formation product to help founders be venture-

13、ready:LatitudFellowships,with educational and networking programs for entrepreneurs and angel investors.Explore: has already invested in 100+startups: America:Future of B2C Fintech13Latin America:Future of B2B Fintech68Latin America:Future of E-commerce138Latin America:Future of SaaS174Latin America

14、:Future of Proptech228Latin America:Future of Healthtech274Latin America:Future of Climate tech316Henrique is a partner at Steamboat Capital Partners,an Investment Banking boutique focused on capital raise and M&A for startups/tech.He is based in So Paulo,Brazil.Prior to Steamboat,Henrique spent his

15、 career in SaaS tech companies and in the venture capital world,working in a variety of roles from corporate development and product to investment.Henrique worked as Head of Strategy&Corporate Development at Greenplat,a B2B SaaS Cleantech focused on sustainability.Prior to that,he worked at TOTVS,th

16、e largest B2B SaaS company in Latin America,and Accenture.He has worked in Brazil,Chile,and France,with experience in VC(Canary,Atlantico,and Latitud),IB(BTG Pactual and Scotiabank),and SaaS Fintech(Palico),respectively.Henrique holds an MBA from INSEAD in France and a B.B.A from Universidad del Des

17、arrollo in Chile.Henrique OliveiraAbout the authors B2C FintechAlejandro is a part-time consultant at Latitud,focusing on special projects.He is based in London,United Kingdom.Alejandro has extensive experience in the investment world,having worked for leading investment banks and private equity fir

18、ms in Colombia.Prior to Latitud,Alejandro worked as an investment associate at Altra Investments,the leading Andean region PE fund.Before that,he worked at Vistra Advisors and Banicol,leading investment bank boutiques in Colombia.He also worked part-time/interned for Finkargo,an early-stage fintech

19、focused on enabling international trade for LatAms SMEs through financing.Alejandro is pursuing an MBA at London Business School and holds a BS in Industrial Engineering from Universidad de los Andes in Bogot,Colombia.Alejandro RestrepoIn collaboration with.Marcial Gonzalez Fraga.Daniel is a part-ti

20、me consultant at Latitud,focusing on special projects.He is based in Madrid,Spain.Daniel has extensive experience in financial risk management,having worked as an FX&Derivatives Trader at two leading financial institutions.Prior to Latitud,Daniel worked at the trading floor of both Citibank and Grup

21、o Bancolombia structuring FX and interest rate to reduce market exposure on corporate clients.He has also been fun of startups,having invested in the first micro-mobility startup in Colombia.He has worked part-time/internships on two search funds focused on buyouts in EdTech,IT,and software companie

22、s in Spain and Colombia.Daniel holds an MBA from IESE Business School in Barcelona and a B.B.A from Colegio de Estudios Superiores de Administracin(CESA)in Bogot.About the author B2B FintechDaniel BallesterosAlejandro has extensive experience in the investment world,having worked for leading investm

23、ent banks and private equity firms in Colombia.He was an investment associate at Altra Investments,the leading PE fund in the Andean region,and led investment bank boutiques at Vistra Advisors and Banicol.He also worked part-time at Finkargo,an early-stage fintech focused on enabling international t

24、rade for LatAms SMEs through financing.Alejandro is based in London,United Kingdom,where he is pursuing an MBA at London Business School.He holds a BS in Industrial Engineering from Universidad de los Andes in Bogot.About the author E-commerceAlejandro RestrepoHenrique is a partner at Steamboat Capi

25、tal Partners,an M&A and capital raise boutique,leading the startup VC fundraising advisory practice.He is based in So Paulo,Brazil.Prior to Steamboat,Henrique spent his career in SaaS tech companies and in the venture capital world,working in a variety of roles from corporate development and product

26、 to investment.Henrique worked as Head of Strategy&Corporate Development at Greenplat,a B2B SaaS Cleantech focused on sustainability.Prior to that,he worked at TOTVS,the largest B2B SaaS company in Latin America,and Accenture.He has worked in Brazil,Chile,and France,with experience in VC(Canary,Atla

27、ntico,and Latitud),IB(BTG Pactual and Scotiabank),and SaaS Fintech(Palico),respectively.Henrique holds an MBA from INSEAD in France and a B.B.A from Universidad del Desarrollo in Chile.About the authors SaaSIn collaboration with.Marcial Gonzalez Fraga.Henrique OliveiraJulio Viana is a finance and st

28、rategy specialist turned tech entrepreneur.Passionate about building companies and solving complex problems,Julio has been building tech products for the real estate industry since 2017,firstly as an entrepreneur at InfoProp and later as an operator at the iBuyer Grupo ZAP VivaReal.Julios also an an

29、gel investor in companies such as Latitud,Yuca,AoCubo,Material Agora,PartYou,Pay2Sell,MaisMu,and Shamballa Beach.Currently,hes building the next generation of real estate fintech for Latin America.About the author ProptechJulio VianaThales is a part-time consultant at Latitud,focusing on special pro

30、jects.Prior to Latitud,he spent his career working within the technology,consulting,and financial services sectors.Thales worked in companies such as Palico,Nubank,Safra Bank,McKinsey&Company,and Goldman Sachs across several roles,such as Strategy,User Acquisition/Growth,Operations,Customer Success,

31、and Investments.Thales holds a BS from University of So Paulo and an MBA from INSEAD.About the authors HealthtechIn collaboration with.Marcial Gonzalez Fraga.Thales CoelhoDaniel was born in Miami(Florida,US)and grew up in Bogot(Colombia).Second-time and a technical founder,he is currently a co-found

32、er and the CEO of Superplants,which is battling climate change with technology.He has been awarded as one of the 35 Innovators under 35 LatAm 2022 by the MIT Technology Review.Besides his startup,Daniel is currently pursuing a degree in entrepreneurship at Babson College.Hes also a professor for You

33、ng Entrepreneurship at Platzi.Daniel has been a speaker at events like the World Biodiversity Forum in Davos,Switzerland,and the UNFCCC Climate Week in The Dominican Republic.Finally,Daniel is a community member of the Latitud Fellowship.Daniel SalinasAbout the author Climate techLatin America:Futur

34、e of B2C FintechLatin America:Future of B2C FintechContext Setting Overview of the region Funding per country Fintech as a VC driver in the region Top players in the fintech industry Funding per segment Funding in 2021 Diversity in fintech funding Funding in 2022The TrendsGlobal TrendsGlobal Trends

35、Cash is still king in Latin America Household income is increasingly more compromised by debt Latin America became mobile-first after Covid-19 Users are migrating to digital banks Embedded finance is rising Payments are being rapidly digitized Theres a shift from savings to higher-yield investments

36、Crypto adoption in Latin America is growing,in spite of lagging regulation Fintechs are born on top of existing infrastructure Consolidation is a key factor in the B2C Fintech segmentSegment TrendsSegment Trends Digital Banking Digital Lending Payments&Remittance Investments&Wealtech Personal Financ

37、e&Education InsurtechThe Opportunity Adoption of Open Banking Financial services penetration opportunity Fertile environment for disruption Historical flaws of incumbents and expansion of e-commerce and digital payments New solutions across all segmentsContentsThe Challenge Challenges B2C Fintech st

38、artups are facing in LatAmCase Studies Nubank PIX CoDi Transfiya,Yape,PLINExecutive SummaryLatin Americas fintech market has experienced exponential growth in the last decade,with more than 1,000 players distributed across the region.Factors such as low penetration and poor quality service from incu

39、mbents will continue to drive growth in the coming years.The report organizes the B2C Fintech ecosystem into 6 different verticals:digital banking,digital lending,payments&remittances,investments&wealth management,personal finance&education,and insurtech.2021 was a record year for global funding wor

40、ldwide.LatAm grew the most,led by consumer fintech,which grew by nearly 500%YoY.Looking forward,the early stage will continue to have momentum and attract capital from worldwide investors.Executive SummaryGrowth in the industry will continue to be driven by trends such as Open Banking,migration to d

41、igital banks,embedded finance,digitalization of payments,shift to high-yield investments,adoption of cryptocurrencies,innovation on top of the existing financial infrastructure,and M&As.With increased funding in the industry,new players are breaking in and offering new kinds of solutions and feature

42、s for different financial products.Among the top innovations,we highlight new payment gateways,alternative credit scoring models,automation of processes,and the emergence of autonomous finance,biometrics,and voice commands.Despite all the development weve seen,the B2C fintech scene and its players s

43、till face relevant challenges,such as a lagging regulatory environment,lack of trust from consumers in financial partners,a scarce talent pool for data analysts,data security concerns,rising inflation and interest rates,and problems when relying on imperfect information.Context Setting486 FintechsPo

44、pulation:126MGDP:US$1.22TFinancial Development Index:0.40Mexico.179 FintechsPopulation:18MGDP:US$0.298TFinancial Development Index:0.50Chile.273 FintechsPopulation:44.5MGDP:US$0.519TFinancial Development Index:0.34Argentina.689 FintechsPopulation:209MGDP:US$1.88TFinancial Development Index:0.59Brazi

45、l.270 FintechsPopulation:49MGDP:US$0.331TFinancial Development Index:0.38Colombia.Source:KoreFusion LatAm Fintech ReportThe region has more than 1,000relevant fintech companies,with new players emerging every dayDistribution of LatAm fintechs by categoryDistribution of LatAm fintechs by countryPower

46、ed by Bing GeoNames,Microsoft,TomTomCategory distribution varies among each geography(for example,the most relevant category in Mexico is lending).US$413,453,1871US$3,257,602,3932US$2,290,147,1503US$853,950,0004US$799,924,724NubankC6 BankCreditasBanco Inter5US$720,333,92267US$1,400,000,0008US$250,30

47、0,000Neonmeutudo.Provu2TM9US$536,632,26810US$155,000,000GeruSolfcilTotal:US$10,066,062,122US$53,000,0001US$378,350,0002US$249,557,0003US$147,500,0004US$72,125,000BitsoStori CardKlaralbo5US$70,000,00067US$51,130,0008US$42,250,000FlinkNexuTe CreemosAplazo9US$38,750,000Kubo.financieroTotal:US$1,366,138

48、,400Total fundraised since 2014Source:Crunchbase,as of March 2022,Latitud AnalysisBrazilrepresents nearly 80%of all funding raisedin the region since 2014,followed by Mexicowith roughly 10%of the totalBrazilMexicoUS$4,000,0001US$54,920,0002US$33,050,0003US$16,300,0004US$5,629,497FintualComparaOnline

49、Global 66Capitalizarme5US$4,000,00067US$3,165,0008US$2,790,000Migrante46 Degrees TechologiesFintocFloid9US$2,000,00010US$1,625,000MentoEncuadradoTotal:US$133,796,545US$6,477,0001US$376,300,0002US$101,000,0003US$38,776,0004US$34,000,000AddiAvistaAcasaCredivalores5US$15,070,00067US$6,375,0008US$5,500,

50、000TpagaValiutriiMezubo9US$4,800,000PuntoredTotal:US$605,895,950Total fundraised since 2014Source:Crunchbase,as of March 2022,Latitud AnalysisArgentina,Colombia,and Chile have raised a total amount similar to that of Mexico,and the remaining countries represent less than 1%ChileColombiaUS$2,400,0001

51、US$544,000,0002US$25,525,0003US$17,350,0004US$5,498,000UalAfluentaLemon CashMoni5US$3,000,00067US$2,250,0008US$1,750,000123 SeguroInvestolandWibondQuiena Inversiones9US$1,250,000CryptoMateTotal:US$610,009,800Argentina#of DealsSelected DealsY Combinator56Trii;Fintual;Z1;TiendaDlarmonashees55Neon;Ual;

52、Addi;Open CoKaszek54Creditas;Remessa Online;Bitso;Warren#of DealsSelected DealsNXTP Ventures49Pods;SecuritizeQED Investors44Creditas;Nubank;Bitso50037Mujer financiera;Apurata;magnetisB2C Fintech has been a dominant playerin the evolution of venture capital in Latin AmericaInvestorInvestorAs of March

53、 2022Digital BankingDigital LendingPayments&RemittanceInvestments&WealthtechPersonal Finance&EducationInsurtechWhat are thetop playersin the industry?US$2 out of every US$3 invested in B2C Fintech went to Digital Banking,the category with the most unicorns such as Nubank,C6 Bank,Inter,Neon,and Ual.U

54、S$1 out of every US$5 went to Lending,represented by new categories such as BNPL(Addi)and digital lending(Creditas,Provu,Geru,and others).Asset management represented roughly 7%,led mostly by the crypto exchanges Bitso and 2TM(Mercado Bitcoin)and by the investment platforms Warren and Fintual.The re

55、maining 5%is represented by Insurance,Payments&Remittance,and Personal Finance&Education.88%ofall consumer fintech fundingsince 2014 went to Digital Banking(67%)and Lending(21%)Source:Crunchbase,as of June 2022,Latitud AnalysisCapital raised breakdown by subcategory(USD M,%of total)%Total$RaisedLatA

56、m total fintech funding hit a record US$12.9B across 315 deals in 2021-consumer fintechs represented more than half of that amount,at US$7.2B and 247 deals.Despite an impressive hike,LatAm consumer fintech still only represents about 5.5%of the record total global fintech funding of US$132B in 2021(

57、CB Insights).According to investors,the early stage will continue to have momentum,while later stages(Series B and later)may suffer more scrutiny and challenges when fundraising.LatAm is the fastest growing region in the world not only for fintech funding but also for overall venture capital funding

58、.Capital raised&deal count in consumer fintech(USD M,#deals)2021 was a record year for global funding worldwide.LatAm grew the most,led by consumer fintech,which grew by nearly 500%YoYSource:Crunchbase,as of June 2022;CB Insights;Latitud Analysis;Gabriel Vasquez-a16z$Raised Deals247In 2021,about 20%

59、of all funds raised by B2C Fintech startups went to women-founded startups.But approx.80%of that(US$1.2B)was just from Nubanks Series G.In 2020,a year that Nubank didnt raise any rounds,total funding for women-founded startups was just US$29M,or 2%of the total raised.Out of that amount,US$22.5M came

60、 just from Warrens series B.Other women-founded fintechs with US$50M raised include Geru and Keycash from Brazil and Storifrom Mexico.Women-founded B2C fintech startupsraised around 20%of the total in 2021,but 80%of that came just from NubanksSeries GSource:Crunchbase,as of March 2022,Latitud Analys

61、is Women-founded funding%Total of total funding2022 is not quite up to speed with last year in terms of consumer fintech,and planned IPOs should be delayedOverall,fintech funding in Latin America saw a decline of 29%in the first half of 2022,in comparison with 2021s average(Dealroom).Still,it should

62、 be noted that the volume of investment in the first three quarters of 2022 has already surpassed 2020s investment.With rising inflation and interest rates,consumer fintech was one of the most affected verticals in the fundraising landscape.After the record-breaking fundraised amount of just over US

63、$7B(Crunchbase)or just over US$9B(Dealroom),led by the massive rounds of Nubank and C6 Bank,2022 is not quite up to speed so far.In Q1,we have seen major rounds,including Creditas US$260M Series F and Neon US$300M Series D.In Q2,the largest round for fintechs in the B2C space was Solfcils Series C.T

64、he credit fintech for solar energy systems raised US$100M in May.Nubank,which went public in late 2021 at a roughly US$23B,a fall of about 40%.This outcome,added to the harsher market environment,will likely postpone most consumer fintech planned IPOs.Source:Dealroom;Crunchbase,Fintech Global$353m$1

65、25m$284m$2.5b$67.7m$47.3m$442m$2.2b$1.4b$636mQ1 2020Q2 2020$273m$91.8m$796m$3.1b$256m$86.2m$895m$2.3b$477m$360mQ3 2020Q4 2020$4.3b$5.6b$7.0b$5.5bChinaAfricaLatin AmericaEuropeSoutheast AsiaUnited States$552m$60.6m$715m$5.8b$392m$238m$3.5b$8.5b$1.2b$1.2bQ1 2021Q2 2021$1.0b$962m$2.7b$7.0b$650m$486m$2.

66、3b$7.2b$2.0b$2.1bQ3 2021Q4 2021$14.8b$13.5b$16.3b$17.1b$824m$501m$1.8b$9.7b$181m$270m$925m$6.4b$1.7b$2.6bQ1 2022Q2 2022$237m$161m$655m$3.7b$636mQ3 2022$15.4b$9.0b$5.3bIn Latin America,the path to IPO is much clearer now versus a few years ago-especially in Brazil.IPOs are important to keep the entre

67、preneurial flywheel going:ideas and capital help attract talent,talent leads to good exits,and capital and talent go back into the ecosystem.We are seeing this play out as we speak.The top quality of companies and talent in Latin America is as good as anywhere in the world,and one of the reasons we

68、continue to focus on the region.Of course the market has shifted in 2022.Through most of 2023,we expect companies will continue to focus more on milestones and runway instead than growth at all costs.”Mike Packer,Partner at QED Investors“The TrendsMacro TrendsCash is still(very much)king in Latin Am

69、ericaAverage household income is increasingly more compromised by debtAfter the covid-19 pandemic,Latin America became mobile-firstMigration of users to digital banks is acceleratingRise of embedded financeMacro TrendsThe rapid digitalization of payments continuesShift from savings to higher-yield i

70、nvestmentsCurrency depreciation and low trust drive crypto adoption2nd wave of innovation,on top of developed infrastructureConsolidationis playing a key factor in the fintech consumer segmentCashis still(very much)king in Latin AmericaEven though e-commerce is surging in the past two years(with dou

71、ble digits growth),cash usage also grew in the region.This underlines several problems across the region,from the unbanked or underserved populations to concerns and lack of trust around online and digital payments.Average household income is increasingly morecompromised by debtIn Latin America,bank

72、ing lending interest rates have always been much higher than in developed markets.The rise of inflation as a consequence of the covid-19 pandemic and easier access to fintech products are also leading to these unprecedented levels of debt across the region.After the covid-19 pandemic,Latin America b

73、ecamemobile-firstIn Latin America,smartphones are more affordable and numerous than desktop computers.In some countries,even more widespread than bank accounts.After the pandemic pushed digitization forward,smartphones have also become Latin Americans preferred way to shop.Rise of embedded financeRe

74、tailers dont need to go through the complex process of getting a banking license and being subject to regulatory duties.Instead,they can pay for BaaS offered by different fintechs.Migration of users to digital banks isacceleratingThe lockdowns and quarantines during the covid-19 pandemic caused more

75、 people to adopt online services.At the same time,legacy customer service from incumbent banks is considered to offer poor quality of service and leads to unsatisfied customers.Therapid digitalization of payments continuesDigital payments have been playing a crucial role in the growth of e-commerce

76、in LatAm.Consumers seek solutions that are easy to adopt,free,with real-time confirmation,and non-bureaucratic,such as Pix in Brazil.Shift from savings to higher-yieldinvestmentsImproving levels of financial education combined with middle-class expansion and lower interest rates during the last year

77、s in the region have contributed to a shift of Latin American retail investors away from saving products toward higher-yield investments(i.e.equities).Currency depreciation and low trust drivecrypto adoptionLatin America is quickly becoming a role model for how cryptos future will look like for seve

78、ral reasons:lack of trust in governments,instabilities,high inflation rates,low financial inclusion,and high reliance on international transfers.Consolidationis playing a key factor in the fintech consumer segmentConsolidation through M&As reached an all-time high record of 26 deals in 2021,given we

79、ll-funded fintechs integrating new services or expanding to new markets and incumbents defending their positions and overcoming regulatory burdens.2nd wave of innovation,on top ofdeveloped infrastructureToday,there are many fintech companies with platforms to facilitate payments,issue financial prod

80、ucts,and offer embedded finance,enabling faster time to market for emerging fintechs.The regions economy is still highly reliant on cash.It accounted for 85%of all in-person retail spending in 2020,according to PYMNTS.The percentage has surprisingly increased in relation to another study shared by A

81、MI in 2018(on the right),which points to 81%penetration.Even though e-commerce is surging in the past two years(with double digits growth),cash usage also grew in the region as,particularly in Mexico and Colombia,it is also often used as online payments in e-commerce through voucher-based services s

82、old in physical stores.Still,cash usage is expected to drop by 36%by 2024,according to Worldpay(FIS).These numbers underline several problems across the region:the unbanked or underserved populations,low penetration of POS and e-payment acceptance,high banking fees for consumers,and concerns and lac

83、k of trust around online and digital payments.Penetration of cash vs.cardsin brick-and-mortar retail spend,2018Source:Public domain sources and AMI analysisCashis still(very much)king in Latin AmericaSource:PYMNTS Global Cash Index,CashMatters,Instituto Locomotiva,AMI analysis,Maia Eliscovich(Ual)Ca

84、sh CardsIn Latin America,banking lending interest rates have always been much higher than in developed markets due to higher inflation rates,uncertainty,bank oligopolies,and higher risk because of a lack of credit scores for a large part of the population.In Brazil,as of November 2021,the average ho

85、usehold income was 51.9%compromised by debt,an all-time high figure.The average credit card interest rate was 350%per year.The Central Banks interest rate is now at 13.75%per month.Two years ago,it was 2%per year.The rise of inflation as a consequence of the covid-19 pandemic and easier access to fi

86、ntech products are also leading to these unprecedented levels of debt across the region.Debt payments in BrazilShare of household income*Source:Central Bank of Brazil*Figures as of each NovemberAverage household income is increasingly more compromised by debt,reaching all-time levels in BrazilSource

87、:XP Investimentos,Brazil Central BankIn Latin America,smartphones are more affordable and numerous than desktop computers and,in some countries,even more widespread than bank accounts.After the pandemic brought millions of new consumers to e-commerce and pushed digitization forward,smartphones have

88、now also become Latin Americans preferred way to shop.Shopping apps were among the most downloaded mobile applications in 2021.In terms of user experience,buying on mobile can also feel easier than on desktops.Since most smartphones are personal devices,consumers can load and save their card informa

89、tion,connect with digital wallet apps,and use biometric identification.Mobiles share of total e-commerce salesAfter the covid-19 pandemic,Latin America became mobile-first,as smartphones became a bridge to the worldSource:Ebanx 202173%of international digital buyers in Latin America downloaded a mob

90、ile shopping app during the coronavirus pandemic.The lockdowns and quarantines during the covid-19 pandemic also caused more people to adopt online services for their everyday needs,accelerating the growth of digital banks in general.Legacy customer service from incumbent banks is considered to offe

91、r poor quality of service and leads to unsatisfied customers due to long response times,bureaucratic processes,high rejection rates,and other problems.As a result,the share of digital banks is rising rapidly.For example,outstanding retail credit attributable to digital banks in Brazil went from 2%to

92、 6%between December 2017 and December 2021.That is expected to reach 13%by 2025.Total outstanding balance of retail credit(Brazil)Poor quality service of incumbents and covid-19 lockdown are accelerating the migration of usersto digital banksSource:Nubank IPO Prospectus;Oliver Wytman ReportDigital b

93、anks and fintechs are gaining share both by attracting customers away from incumbents and by incorporating new individuals into the financial system.Digital banks&fintechs Traditional consumer banks Incumbents OtherPreviously,many of our financial interactions,such as loans or payments,were only pos

94、sible through the use of banks.Nowadays,non-finance companies can provide financial services to their customers by connecting banks and fintechs to their platforms through APIs.We call this embedded finance.Retailers dont need to go through the complex process of getting a banking license and being

95、subject to regulatory duties.Instead,they can pay for BaaS offered by different fintechs.As companies accumulate data and learn more about their customers,they will be able to add financial services to their value offer,improving the customer journey and increasing their wallet share.How embedded le

96、nding worksThe rise of embedded finance is allowing non-financial institutions to offer financial products and capture more valuefrom their customersSource:Ebanx 2021;Gabriel Vasquez-A16ZAs mentioned by Angela Strange(A16Z),“Every company will be a fintech company thanks to embedded finance.Users ba

97、nkOpen Banking providerConsumer lenderUserThird-party using embedded lendingDigital payments have been playing a crucial role in the growth of e-commerce in LatAm,bringing new consumers to e-commerce even in a region where cash is still king.E-commerce sites and marketplaces must offer customers a v

98、ast array of payment options.Consumers seek solutions that are easy to adopt,free,with real-time confirmation,and non-bureaucratic,such as Pix in Brazil.Specific market nuances are enabling the rise of new and disruptive payment methods,such as mobile wallets or BNPL.Invisible/automatic payments are

99、 the next wave of innovation.Authentication protocols and security standards also evolve,in line with payments.The rapid digitalization of payments continues,serving as a major facilitator of e-commerce growth.Still,5.5%of sales are paid with cash on deliverySource:Statista,E-Commerce Report 2021;Da

100、niela Cadena,Director of Business Development at ChiperDistribution of e-commerce payments methods in Latin AmericaSource:FIS,The 2021 Global Payments Report;Ebanx Report 2021Superior customer experience and low-cost open platform distribution models employed by D2C independent brokers are allowing

101、them to rapidly gain market share from retail investment managers.The expansion of smartphones allowed new entrants to acquire customers outside the walls of traditional banks.Improving levels of financial education combined with middle-class expansion and lower interest rates during the last years

102、in the region have contributed to a shift of Latin American retail investors away from saving products toward higher-yield investments(i.e.equities).There is still significant room in Latin America for further assets to shift away from banks into investment accounts,compared to developed regions.Cha

103、nge in investment by asset classCustomer experience,financial education,and lower interest rates aredriving the shiftfrom savings to higher-yield investmentsSource:Ebanx 2021Share of high-yield investments such as equities and investment funds are expected to continue increasing,at the cost of savin

104、g accounts and fixed income.Fixed Income Savings Accounts Private Pension Investments Funds EquitiesLatin America is quickly becoming a role model for how cryptos future will look like for several reasons:lack of trust in governments,instabilities,high inflation rates,low financial inclusion(number

105、of unbanked citizens),and high reliance on international transfers.Regulation is one important trend to look for in the next years,with the main objectives of reducing potential money laundering and risks for investors and creating tax rules.El Salvador is leading not only the region but also the wo

106、rld as the first country to implement wholesale adoption of crypto,with its acceptance of Bitcoin as a legal tender.Paraguay,Cuba,Argentina,and Panama are all considering similar adoption.Brazil is currently discussing a bill that creates ground rules for digital currency funds and their day-to-day

107、use.If approved,Brazil will become the largest country in the region to regulate crypto.Currency depreciation and low trust in the financial system and governments have driven crypto adoption in LatAm.However,regulation lags behindSource:Statista,Yahoo!Finance,Bloomberg LineaDeveloped economies have

108、 significantly lower adoption of cryptocurrencies:US(10%),Russia(8%),China(7%),Germany(7%),and Japan(4%).Share of respondents who owned or used cryptocurrenciesEight to ten years ago,there was no existing infrastructure for new financial services.Neobanks and other players,such as Nubank,had to buil

109、d the infrastructure from scratch.As of today,there are many fintech companies with platforms to facilitate payments,issue financial products,and offer embedded finance in general,enabling faster time to market for emerging fintechs.The region is experimenting a second wave of innovation,which will

110、enable B2C fintechs to build on top of developed infrastructureSource:Gabriel Vasquez-a16z;Maia Eliscovich-UalOffers infrastructure and financial services to fintechs and embedded finance firms,which in turn allows them to issue prepaid and credit cards and launch digital accounts.API that offers in

111、stant access,full coverage,integration of multiple banks,and security encryption for data safety.This enables businesses to make secure financial transactions without having to develop the necessary infrastructure.The first wave of B2C fintech,like neobanks and BNPL,figured out that there wasnt any

112、infrastructure available at the time they rose,such as novel payment processes.So,they had to build it in-house.This created a massive barrier to entry for serving their customers,particularly the underbanked.In the 2nd wave of innovation,businesses are building on top of existing infrastructure and

113、 going to market faster and cheaper.The infrastructure allows these B2C fintechs teams to be more focused on their product rather than building their business from the ground up.”Gabriel Vasquez,Andreessen Horowitz“Consolidation is playing a key factor in the B2C Fintech segment:48 acquisitionssince

114、 2014,with more than half taking place just in 202126654NubankCreditas2TMNeon322TC-TradersClubUalFoxbitWarren Brasil2ComparaOnlineNumber of acquisitionsOrganization nameConsolidation through M&As reached an all-time high record of 26 deals in 2021.The momentum can be explained by well-funded fintech

115、s integrating new services or expanding to new markets and incumbents defending their positions and overcoming regulatory burdens.Most relevant M&As:Nubank:Olivia,Easynvest,SpinpayCreditas:Volanty,Bcredi,Minuto SegurosPicPay:GuiabolsoOpen Co:merger of Geru and RebelSegment TrendsDigital BankingDigit

116、al LendingPayments&RemittanceInvestments&WealthtechPersonal Finance&EducationInsurtechDefinitionStartups in this space provide services similar to traditional banks such as savings accounts,debit cards,credit cards,and other point-of-sale credit products.TrendAbility to easily compare financial prod

117、ucts and services,focusing on distinct demographics,and providing specialized offers.DefinitionConsists primarily of non-bank companies or platforms that provide a range of consumer loans,business loans,and related underwriting services.TrendLimited regulations for these lenders,lack of legacy infra

118、structure,pricing,customer demographic,and ancillary product offerings.DefinitionStartups in this space facilitate transactions,from an an e-commerce payment to an international transfer.TrendThis category is becoming blended across all the others and vice versa.DefinitionNew capital market players

119、have emerged offering high-speed trading capabilities,automation,transaction routers,AI-based algorithms,pre-trade analytics,order execution,and portfolio management.TrendHigher demand for alternative assets,making investment a social experience,and creating network effects.DefinitionStartups in thi

120、s space provide ways for the population to receive education and create better habits concerning their financial well-being.TrendIncreased offering by the top digital banks and lending apps,and Open Banking as a way to unlock new products and opportunities.DefinitionStartups that are bringing innova

121、tion to the insurance sector,in subcategories such as Health,Car,Phone,and Life.TrendIncreased offering by digital banks.But the reverse is not true:insurtechs are not offering fintech products to their customers.Segment TrendsLast RoundIPO(2021)Total RaisedUS$3.9BGeographyBrazil,Mexico,ColombiaFoun

122、ded2013Lead InvestorsSequoia,Kaszek,DST,TigerUS$300M Series D(2022)US$720MBrazil2016Quona,Monashees,EndeavorUS$350M Series D(2021)US$544MArgentina,Mexico,Colombia2017Monashees,Tencent,SoftbankUS$45M Series B(2020)US$72MMexico2016Magma Partners,Nazca,GreyhoundTrends by segment:Digital BankingStartups

123、 in this space provide services similar to traditional banks such as savings accounts,debit cards,credit cards,and other point-of-sale credit products.Todays consumers are more discerning when it comes to choosing financial products.They value the ability to easily compare things such as savings acc

124、ount interest rates,credit card offers,and mortgage rates.Fintechs in this segment differentiate primarily by focusing on distinct customer demographics(for example,Gen-Z-focused products)and by providing specialized financial services that can be tailored to the needs of individual consumers.Last R

125、oundUS$260M Series F(2022)Total RaisedUS$1.1BGeographyBrazilFounded2012Lead InvestorsKaszek,QED,Softbank,NubankUS$200M Series C(2021)US$376.3MColombia,Brazil2018a16Z,QED,Monashees,SoftbankUS$115 M Series D(2021)US$140MBrazil2013Monashees,Softbank,Fintech CollectiveUS$202M Series C(2021)US$323.3MMexi

126、co2012StepStone,Cathay,FJ Labs,EndeavorTrends by segment:Digital LendingConsists primarily of non-bank companies or platforms that provide a range of consumer loans,business loans,and related underwriting services.Limited regulations for these lenders,such as capital reserve requirements,and the lac

127、k of legacy infrastructure,such as physical branches,provide significant competitive advantages over traditional banks.Their primary differentiators include pricing,customer demographic,and ancillary product offerings.Pitchbook Q4 2020 Emerging Tech Trends Fintech;Morgan Stanley,The Rise of the E-Co

128、mmerce Ecosystem 2021;Daniela Cadena,Director of Business Development at Chiper;Dominique Oliver,Co-founder at AmaroCompetition is really tough and differentiation is even tougher.Find the right edge to get a piece of the pie.And a rule of thumb for all fintechs:dont spend money on what is not makin

129、g money.”Guilherme Esquivel,Strategy Partner at EY Parthenon“Last RoundAcquired by J&F,holding that owns JBS and Banco OriginalTotal Raised-GeographyBrazilFounded2012Lead InvestorsN/ALaunched by MercadoLivre,leading e-commerce player in the region-LatAm2004N/AUS$80mm Series C(2021)US$118.6MBrazil201

130、0IDB Invest,Fuel Venture Capital,IDC Ventures,The Venture CityAcquired by EBANX for US$229M(2021)US$25.7MBrazil2016Kaszek,GFC,MAR Ventures,Bewater VenturesTrends by segment:Payments&RemittanceWith just over US$200M in total funding received,this category has the peculiarity of both market leaders in

131、 terms of customers(PicPay and Mercado Pago)being owned by large holding groups(JBS Holding and Mercado Livre,respectively)and having never raised money from external investors.RecargaPay accounts for more than 50%of the total funding raised.Remessa Online represents the largest exit to date,being a

132、cquired in December 2021 by EBANX for around US$250M.This category is becoming blended across all the others and vice versa.PicPay and MercadoPago now offer credit cards,lending,and even crypto solutions.Source:Crunchbase,as of March 2022,Latitud AnalysisLast RoundUS$250M Series C(2021)Total RaisedU

133、S$314.5MGeographyLatAmFounded2014Lead InvestorsKaszek,QED,Tiger,CoatueUS$53M Series C(2021)US$104.6MBrazil2014Kaszek,QED,Ribbit,SpectraUS$39M Series B(2021)US$55MChile,Mexico2016ALLVP,Y Combinator,KaszekUS$11M Series B(2020)US$17.4MBrazil2012Monashees,Redpoint,500 GlobalTrends by segment:Investments

134、&WealthtechNew capital market players have emerged offering high-speed trading capabilities,automation,transaction routers,AI-based algorithms,pre-trade analytics,order execution,and portfolio management.The participants generate revenues principally through software licensing for deployment on clie

135、nt servers and systems,cloud-based SaaS,and/or transaction-based fees.The segment is also driven by demographic shifts and changing preferences.Rather than focusing on budgeting and savings,the next generation of Latinos is predicted to place more importance on investing,with higher demand for alter

136、native assets.The trend is making investment a social experience,by creating network effects within the product.The combination of social platforms and financial products creates an active and engaged audience.Source:Coatue FIntech Revolution;Pitchbook 2021 Annual Fintech ReportLast RoundAcquired by

137、 PicPay for an undisclosed amount(2021)Total RaisedUS$66MGeographyBrazilFounded2012Lead InvestorsKaszek,Ribbit Capital,VEF,QED,IFC,Valor Capital Group,Igah VenturesUS$24M equity and financing round(2020)US$24MMexico2009Alloy Merchant Finance,DILA CapitalUS$3.6M Seed Round(2020)US$5.1MMexico2019Y Com

138、binator,Dux Capital,Hetz VenturesUS$7M Series A(2017)US$15MMexico2014QED Investors,Seaya Ventures,Founders FundTrends by segment:Personal Finance&EducationRoughly US$120M was raised in the past years,with more than 50%of the money going to Guiabolso,acquired in 2021 by PicPay.Personal Finance Manage

139、ment(PFM)and education are increasingly being offered by the top digital banks and lending apps.New Open Banking trends and regulationswill unlock new products and opportunities.This is the only category in which the main players are not from Brazil but from Mexico.Source:Crunchbase,as of March 2022

140、,Latitud AnalysisLast RoundUS$20M Series B(2021)Total RaisedUS$42.1MGeographyBrazilFounded2018Lead InvestorsMonashees,Raiz Investimentos,Canary,BTG PactualUS$127M Series C(2021)US$174.8MBrazil2019Canary,Kaszek,SoftbankUS$36M Series A(2021)US$38.6MBrazil2020Kaszek,Ribbit CapitalUS$16M Series A and ex

141、tension(2021)US$18.3MBrazil2020Prosus Ventures,Kaszek,MAYA Capital,Propel Venture PartnersTrends by segment:InsurtechWith around US$300M in funding raised,Insurtech is heavily dominated by Brazilian players:Alice with US$175M,Pier with US$42M,Justos with US$39M,Pitzi with US$30M,and Azos with US$18.

142、3M.The main subcategories for insurance are Health,Car,Phone,and Life.Like most of the other main categories,Insurance is increasingly being offered by digital banks,but Insurtechs are not offering fintech products to its customers.Source:Crunchbase,as of March 2022,Latitud AnalysisUS$10M Series D(2

143、019)US$29.8MBrazil2012QED Investors,Valiant Capital Partners,Thrive Capital,Flybridge,KaszekThe OpportunityNew regulations in Latin American countries such as Mexico or Brazil are allowing individuals to share their financial information with third parties through APIs.Given the low penetration of b

144、ank accounts,Open Banking is ideal for the region.Financial players can now rely on data from other sources,such as marketplaces.This information can be used to expand eligibility for new products or services for many Latin Americans bank accounts,credit cards,loans,etc.it can also be processed usin

145、g data science and machine learning to create relevant and tailored services for the customers,adjusted to their needs and risk profile.Expected adoption of Open Banking by countryFinancial inclusion is expected to increase in the region thanks to theadoption of Open BankingSource:BelvoNo regulation

146、 yet,but has advanced a series of regulations that favored interoperability.In phase IV of implementation,where institutions must share all their users information.Low adoption so far.Signed financial portability act in 2020.Currently designing the Open Banking framework.Expected to be defined durin

147、g 2022.Passed Fintech Law in 2018,but expected to expand requirements in 2022.Carrying out working groups to share perspectives and insights on Open Banking.Source:Statista,World Bank Data,NubankFinancial services still offer a significant penetration opportunityahead,as electronic payments and cred

148、it offerings to consumers continue to deepenCredit card penetrationBank account penetrationSource:The World Bank Database,Nubank IPO ProspectuHigh lending interest rates and market concentration create a fertile environmentfor disruption from new entrants who can level the playground with tech,data,

149、and customer serviceHighly concentrated marketLending interest ratesHigh rates in countries such as Brazil and Argentina have deprived consumers of access to credit Brazil Argentina Mexico Colombia United States China70%85%The largest 5 banks in Brazil,Mexico,and Colombia control 70-85%of all loans,

150、deposits,and banking revenue,with 20%historical ROEs.Lack of competition has resulted in less innovation,a more limited selection of products,and higher feesIncumbent banks have high costs to serve,a product of expansive and extensive branch distribution supported by large workforces.New players are

151、 able to drastically reduce costs thanks to digital-native solutions and leaner processes.Given historically high concentration and low competition,incumbent players offer poor service,which results in unsatisfied customers and a lack of trust.This has reduced the switching cost to neobanks which le

152、ads to higher trust in alternative finance:70%of Latin Americans believe in the positive impact of crypto and decentralized finance,which reflects in higher adoption rates of the former.E-commerce in LatAm grew by 37%in 2020.Fintech plays a crucial role in e-commerce transactions,becoming indispensa

153、ble to travelers,from cross-border currency exchange to payment solutions.Historical flaws of incumbent players and expansion of e-commerce and digital payments give rise toall kinds of opportunitiesfor B2C Fintech playersSource:NubankConstant innovation in Payment Gateways is allowing consumers to

154、access different payment methods,such as credit(BNPL options)and cryptocurrencies.Theres also an opportunity for payment methods to integrate loyalty programs in their systems since they are the touchpoint between customer and merchant.Using targeted discounts and rewards,they can improve the UX for

155、 customers and the ROI for merchants.In the future,blockchain-based payments hold the promise of real-time,decentralized settlement.Alternative Credit Scoring considers alternative data points,such as education history and phone records,into their credit risk model.Combined with an intelligent and s

156、elf-learning algorithm,it can lead to better lending decisions over time.Some of the alternative lending market has been clawed away by the BNPL space.Still,loan volume growth has continued to expand and alternative models continue to proliferate.We expect to see more business model efficiencies,suc

157、h as automated data collection and technology-powered and streamlined credit decision-making processes.That way,the segment will continue to grow in importance.When it comes to innovation,fintech outstands as one of the most disruptive industries,with new solutions across all segmentsSource:Pitchboo

158、k Q4 2020 Emerging Tech Trends FintechInnovations in Biometrics will allow users to replace PINs and passwords as the primary authentication method when executing payments or transactions.This is an addition to technologies like GPS and data mining combined with predictive modeling,artificial intell

159、igence,and machine learning.These are already improving verification,authorization,and fraud monitoring while also promoting faster payment initiatives.Theres an emergence of Autonomous Finance,which uses artificial intelligence features to enable an app to autonomously create and execute a financia

160、l plan based on a persons goals,risk tolerance,age,and other factors.Like autonomous vehicles,“self-driving”finance apps eliminate management processes and decision-making.They can integrate users multitudinous sources of financial and transaction data,including debt,income,spending,investments,and

161、any other financial products or services to maximize financial performance.Several neobanks and traditional banks are currently developing autonomous finance applications.Using Voice Commands to authenticate and authorize transactions and other operations promise to deliver an even better customer e

162、xperience.Other improvements in the customer experience when making digital financial transactions segment are seamless payments,recurring payments,one-click checkout,and order ahead.These developments are driving and will continue to drive growth in the digital transactions volume,especially when t

163、alking about payments in omnicommerces.When it comes to innovation,fintech outstands as one of the most disruptive industries,with new solutions across all segmentsSource:Pitchbook Q4 2020 Emerging Tech Trends FintechThe ChallengeDespite significant progress in Open Banking and fintech regulations i

164、n countries like Mexico and Brazil,countries in the region are still in the first stage of proper implementation of their regulation.54%of Latin Americans think this is the main barrier.For historical reasons,Latin Americans dont rely on financial institutions,such as traditional banks,as they feel

165、they are being ripped off with hidden fees or their capital is not safe.As of today,“friends and family remain the most influential source of information and validation.Fintechs need to innovate their interactions with consumers to change this.The increasing rate of fintech solutions in the region h

166、as been higher than the increasing rate of new talent being developed,which creates fierce competition for talent.This is relevant,as talent determines the level of funding available to build fintechs.In virtual security,vulnerabilities are more discreet and can have a higher impact on users,as they

167、 can affect not only users money but also their data.To establish a high-security platform,fintechs may implement the following solutions:two-factor authorization;biometric authentication;data encryption and obfuscation;real-time alerts and notifications;and behavior analysis.Latin Americas regulato

168、ry environment lags in relation to developed countriesLack of trust in financial partnersScarce talent pool for data analysts and new age technologiesData SecurityWhat are the challenges that startups in the industry are facing in LatAm?Source:FIS,The 2021 Global Payments Report;Statista Database;Am

169、ericas Market IntelligenceSource:FIS,The 2021 Global Payments Report The rising inflation and interest rates are starting to severely impact digital banks and lenders as default rates are growing at alarming rates.Lack of access to credit,insufficient banking infrastructure,high rates of inflation,c

170、oncerns about fraud,and reluctance to pay high fees for electronic transactions all contribute to the persistence of cash,which is still king.While still with plenty of room to grow,LatAm has become one of the most well-funded fintech regions in the world,and the competition for talent and customers

171、 is sacrificing the previously known nice margins.Many lenders leverage their innovative credit assessment process in access to alternative data.Such data must be carefully assessed,as it can lead to subprime lending and high default ratios,as already seen in fintech lenders in developed economies.P

172、ersistent challenges limit financial inclusion and expansion in consumption,driving the use of cashFierce competition across the regionReliance on imperfect informationWhat are the challenges the startups in the industry are facing in LatAm?Despite all the challenges encountered,both founders and in

173、vestors agree on one point:differences in relation to developed markets are precisely the main opportunities to innovate.Inflation and interest ratesUals objective is for everyone to be included in the financial system with,at least,an account.In Latin America,it is not fighting for people to drop a

174、nother bank.Its a fight against cash.Theres a lack of trust.Customers are four times more likely to trust you if youre not a traditional financial institution.So how to communicate with them?Show that you are not like the incumbents.”Maia Eliscovich,Head of Merchant Acquiring at Ual“Case Studies2013

175、Founded with the purpose of offering a banking alternative,in the midst of a market with high fees,low penetration,and poor tech systemsNubanks IPO in Q4 2021 represented a new milestonefor Latin Americas business ecosystem,attracting international investment and increasing access to alternative inv

176、estments for Latin Americans9/12/21Debut date in the NYSE.US$2.6BCash raised during the IPO to further accelerate geographic and product expansion.+50MCustomers across Brazil,Mexico,and ColombiaUS$41.5BValuation after first day closing,making Nubank the most valuable financial institution in Latin A

177、merica at the time800kNubanks customers with investment accounts that bought Nubank shares,helping to expand the number of equity investors in Brazil.Brazil is leading the way in the instant payments revolution:PIX is the most successful initiative in the region,by far,and may even be the leading ca

178、se in the world too.This happens within a highly regulated environment,directly controlled by the Brazilian Central Bank(BACEN),and where the top five banks concentrate massive powers.Officially launched in November 2020,PIX works on a 24/7 basis,with real-time clearing and settlement,and has a huge

179、 development roadmap ahead.The Brazilian instant payment system was the payment method with the highest growth rate in Latin American e-commerce in 2021.With fast adoption,PIX has outstanding statistics:20%month-over-month growth average in one year.More than 364 million registered keys and 120 mill

180、ion registered users.More than US$700B transferred in one year.60%of the Brazilian population is already using Pix and the number keeps growing.The number of PIXs was 3 times the number of traditional transfers in June 2021.More so,PIX already surpassed the credit card ownership in the country,which

181、 is at 25%,according to the World Bank Global Findex.It has also outpaced boleto and card growth volumes when we talk about e-commerce payment methods in Brazil.Pix is gaining market share rapidly in a growing digital payments marketSource:https:/ 9th 2022)Debit Card PixThe instant paymentsrevolutio

182、n has taken off in the region,led by Brazils Central Bank PIX launch and exponential growth Bill payments Bank transfer Pre-paid card Other Credit cardThe PIX revolution in Brazil has been sending a really good message to regulators and stakeholders across LatAm,becoming a role model.However,other i

183、nitiatives are not taking off just as easily,with Mexicos initiative being government-led and Colombias and Perus initiatives being private-led.Mexico:CoDi was designed by the local regulator with the goal to be a cash substitute and has been available since 2019.The issue here is that it was not de

184、signed for the online world and it was thus negatively impacted by the pandemic,losing the trust of millions of users as a result.Adoption is still the main pain point.CoDi also struggles to bring merchants,consumers,and banks to its platform.While no total failure,it just hasnt grown exponentially

185、like PIX and largely missed two of its main goals:the number of registered accounts(2019s goal was 18M,only 13M to date)and the number of transfers(2019s goal was 28M,only 4M to date).Cash will remain king in Mexico-at least until Codi really takes off.Codi has largely missed both its main initial t

186、argetsSource:https:/ Linea Cuentas validadas acumuladas Meta de ususriosIn Mexico,CoDi missed its initial targets and customer adoption has becomethe main challenge Operaciones totales acumuladas Meta de transferenciasColombia:the countrys solution is called Transfiya and was designed by Minka,a Col

187、ombian fintech.Transfiya was launched in February 2020 and is a real-time transfer in partnership with ACH Colombia,an institution responsible for bank-to-bank operations in the country.So far around 7 million transfers with government subsidies were made via Transfiya and there are 14 traditional f

188、inancial institutions and banks integrated into the system.This has enabled Transfiyas growth and nowadays the system has over 1 million users,besides 4 million transactions registered.While these numbers are significant,in 2021 total transfers grew only by 20%,a sign that shows that Transfiya is st

189、ill far from PIXs exponential growth.Source:https:/ Colombia and Peru,the private-led initiatives aremore successful,particularly in the latter,with two growing different solutionsPeru:the country has not just one but two private and exportable payments solutions Yape,an app by Perus largest bank,Ba

190、nco de Crdito del Per;and PLIN,owned by YellowPepper in partnership with Peruvian banks BBVA,Interbank,and Scotiabank.Yape started its operations in 2017,having only Banco de Crditos clients as its customers and offering them an easier way to make P2P payments.Later,in May 2020,when its rival PLIN w

191、as launched,all Peruvians were able to use it.Both solutions seem to be doing just fine and growing in a similar fashion:Yape and PLIN have around 4 to 5 million users each and the race is now aimed at partnerships,merchants access,and adding financial institutions.The only clear winner so far is th

192、e customer:digital payments and transfers adoption rates in Peru are growing steadily and have reached nearly 50%penetration.Latin America:Future of B2B FintechLatin America:Future of B2B FintechContext SettingOverview of the regionRelevant milestones for B2B FintechB2B Fintech unicornsFunding and d

193、eals in 2021M&A in B2B Fintech Investors in B2B FintechSegmentsSegmentsOpen Banking or APIsBaaS or Embedded financeLendingPOS financingPayment processors and networksAccounting,Finance,and ProcurementFinancial data platforms for AML and KYCPayroll and benefitsSpotlight of important players in 2021Th

194、e TrendsPayments:payment processingPayments:B2B payment solutionsAlternative Lending:revenue-based financingAlternative Lending:BNPLSME Software Tools:expense management,accounting,and procurementOpen Banking:infrastructureOpen Banking:API-based banking softwarePayroll&Benefits:advanced salaries and

195、 reward programsContentsThe OpportunityEconomic ContextYoung PopulationMobile PenetrationInternet PenetrationFinancial Product Penetration SME Financing GapWrap up:opportunities for B2B Fintech aheadExecutive SummaryFintech companies all over the region are booming,driven by a relentless need to pro

196、duce financial equality and social impact.World-class talent in LatAm is producing creative solutions and creating companies that are changing peoples lives while solving deep structural problems in the region.Fintechs are still coming up on top from the ongoing health and economic crisis,which has

197、been reaffirmed by the immense financing volume poured into all kinds of fintechs in 2021.These digital-first companies have made great use of real-time data and technology to better understand their customers needs and adapt their solutions to their re-evaluated customer segments.There are a couple

198、 of B2B Fintech sectors that stand out and that are driving profound changes in the region;these are the enablers and often unseen players in the open banking,API,and BaaS space.As collaborations and partnerships between incumbents and fintech players consolidate,these infrastructure companies will

199、become key in making these alliances as smooth and frictionless as possible.On top of that,embedded finance will continue to surge with non-financial players offering payments,lending,and processing solutions to customers,with the aim of becoming a full-stack service provider while reducing churn an

200、d increasing their lifetime value.Throughout this report,we hope to provide a clear picture of the B2B Fintech landscape in Latin America.We discuss our view ofsome of the trends happening across different verticals,analyzed the reasons for the high influx of capital to the region as well as identif

201、ied challenges and opportunities certain business models might face.“Fintech is the gateway drug to venture financing in Latin America”Brian Requarth,Co-founder&CEO at LatitudContext SettingThe way we understand B2B Fintech companies in this report istwo-fold.On one end,we consider those companies w

202、hose clients are other fintech players(i.e.,API fintechs,payment processors&networks,etc.)and at the other those whose clients are non-fintech companies(i.e.,SME lending,payroll,etc.)Together,they make up the B2B Fintech universe.486 FintechsPopulation:126MGDP:US$1.22TFinancial Development Index:0.4

203、0Mexico.179 FintechsPopulation:18MGDP:US$0.298TFinancial Development Index:0.50Chile.273 FintechsPopulation:44.5MGDP:US$0.519TFinancial Development Index:0.34Argentina.689 FintechsPopulation:209MGDP:US$1.88TFinancial Development Index:0.59Brazil.270 FintechsPopulation:49MGDP:US$0.331TFinancial Devel

204、opment Index:0.38Colombia.Source:KoreFusion LatAm Fintech Report 2020Powered by Bing GeoNames,Microsoft,TomTomOverview of the Region1stMilestoneThesisSupport for the infrastructure of incumbents(legacy banks and huge ecommerce players).First signs of alternative to traditional banking and informatio

205、n-based platforms(credit scores,comparisons).ModelsPayment gateway,credit card infrastructure,electronic trading platforms,P2P lending,SME financing,automated investment service.CompaniesSource:Report from Alter on Business Model ThesisRelevant Milestones for Fintech B2B2ndMilestoneThesisPost financ

206、ial crisis resulted in tighter financial regulations and distrust in banking institutions.Costumers start to look for transferable alternatives for their financial services.This gives rise to transaction based fintechs and the infrastructure to support it.ModelsIncludes payment issuers and processor

207、s,C2C money transfer,BNPL,blockchain tech,cryptocurrency and crypto trading platforms.CompaniesSource:Report from Alter on Business Model ThesisRelevant Milestones For Fintech B2B3rdMilestoneThesisLatest milestone is being led by open banking.Core banking functions in B2C(saving,investment)and B2B(c

208、ards,payments)haven been challenged by new business models,aimed at new generation of users.The use of Artificial intelligence(AI)and Machine Learning(ML)have sped up automation and decision making.Blockchain have also expanded.ModelsOpen finance,neobanks,B2B payment platforms,zero commission stock

209、brokerage,fraud prevention,non-prime lending.CompaniesSource:Report from Alter on Business Model ThesisRelevant Milestones For Fintech B2BB2B Fintech Unicorns in 2021Paytech US$2BPaytech US$1.3BMexico.Paytech US$6.5B*Uruguay.Brazil is the country with the most B2B Fintech unicorns,representing a tot

210、al of 80%of the club Source:Latam Fintech Funding 2021 Report*Market cap as of the beginning of November 2022Powered by Bing GeoNames,Microsoft,TomTomNeobank US$23B*Paytech US$4.8B*Paytech US$3.8B*Neobank US$2.2BPaytech US$1BDigital Lending US$4.8BBrazil.Overview:B2B Fintech Deals in 2021Mexico.The

211、B2B Fintech funding in Brazil,Mexico,and Colombia represents around 73%of the entire fintech financing volume.It is especially staggering in Colombia,where the total flow of funding in 2021 was US$206M of which 90%went to B2B Fintech-related startups.In Brazil,although only 46%of the total fintechs

212、raising capital went to B2B Fintechs,they represented around 90%of the volume.All in all,most deals have been financed through equity rounds,but there have been cases of debt financing rounds such as the US$380M round for Meu Tudo.Another deal to highlight was the 40%acquisition of J.P.Morgan of dig

213、ital challenger C6 for US$2B,that came as a corporate round.Source:Crunchbase and PitchbookPowered by Bing GeoNames,Microsoft,TomTom18 B2B Fintech startups(49%)Raised US$786M(56%)#Deals 23(52%)9.8%Ecosystem ValueColombia.11 B2B Fintech startups(79%)Raised US$185M(90%)#Deals 13(81%)2.3%Ecosystem Valu

214、eBrazil.31 B2B Fintech startups(46%)Raised US$4.9B(90%)#Deals 52(69%)61%Ecosystem ValueArgentina.6 B2B Fintech startups(67%)Raised US$65M(14%)#Deals 8(73%)0.8%Ecosystem ValueInvestment in fintech throughout Latin America has seen an unprecedented exponential growth during 2021.Fintechs in the region

215、 raised US$138M in 2015 and US$3.5B in 2020,showcasing the substantial rise in investment capital that LatAm has been able to seduce.But 2021 stands apart from other years in terms of growth by reaching US$12.9B in funding throughout the year,with an amazing 269%increase in total funding from 2020.T

216、hese two semesters have not only seen a raising dollar value of investment but also of the number of deals,with 2021 experiencing an increase of 72%in deal count.There were 132 more deals being executed in 2021 than in the whole of 2020.Q2 of 2021 was a record-breaking moment with US$6B in funding f

217、or fintech companies in the region,followed by US$2.5B in Q3 alone.These numbers by themselves are very impressive,considering that the volume raised in Q2 is almost as large as what the whole market captured in the past 4 years.The funding in 2021 was spread across stages with 68%of capital flowing

218、 to early-stage ventures,14%to mid-stage,and 12%to late-stage.Early-stage funding has been higher in 2021 than in the past two previous years.Source:CBI Insights global fintech report Quarterly fintech deals in LatAmYearly fintech funding in LatAm Funding in the region has seen a staggering rise,mak

219、ing 2021 a record-breaking yearBrazil is the largest economy in the region and home to the largest fintechs produced in the ecosystem.Nubank was born there and per CBI Insights report,6 out of 10 of the largest equity deals made in LatAm were taken by Brazilian startups,among them Mercado Bitcoin,Cl

220、oudWalk,Unico,and others.Regulatory rollouts have been helping fintech funding in Brazil and proof of that are the Central Banks Open Banking initiative and the electronic payment scheme(PIX),which has brought in 105 million registered people.Both these efforts are expected to bring a lot of innovat

221、ion to the ecosystem in Brazil and help pave the wave for future startups.The Brazilian Central Bank passed a new regulation on Open Banking(“Sistema Financeiro Aberto”)in May 2020,which allows for sharing of data and services among financial institutions,payment institutions,and other players licen

222、sed under the Central Bank.The last and fourth stage of this roll happened in October 2021.And there are a few reasonsthat could explain such an appetite from investors.Mexico is a significant player in the fintech industry,and it comes just behind Brazil in terms of funding.With the passing of the

223、fintech law and a new regulation around Open Banking,the country has managed to foster a strong environment for the rise of this industry.In terms of funding,US$821.5M was raised between 2015 and 2019,representing 97.9%of Mexicos total venture capital flow.In the first half of 2021,there has been al

224、ready more than US$1B in funding for fintechs in Mexico.Colombia is the third largest fintech funding benefactor.During the first half of 2021,it raised US$170M,with Addi standing as its flagship in the sector.Colombia has regulation around e-wallets,payment aggregators,and gateways,which fosters th

225、e startup community and helps pave the way for new raises.Its still 4 to 5 years behind Brazil or Mexico in terms of fintech regulation,but the country is moving in the right direction.One argument for the slower pace of fintech regulation and innovation in Colombia and other countries comes from th

226、e fact that the biggest banks are not international players but rather local banks,like Bancolombia in Colombia and Banco de Crdito del Per in Peru.In contrast,international banking institutions are the largest players in some other markets,for instance BBVA in Mexico,which has contributed in some s

227、hape or form to an increase in collaboration between fintechs and banks.Underpenetrated market Open Banking and API fintechsplatforms such as Belvo and Pomelo are building the infrastructure that will enable future fintechs to offer products and services designed for the unbanked.LatAm has many unme

228、t needs in this regard and presents a big opportunity for startups and investors,that is not seen in more developed economies.There is still a lot of disruption to be made using technology,data,and customer service in the region.Nubank-Nubank has truly elevated the whole ecosystem,and it has been ke

229、y in luring investors into the region.They have shown global firms such as Softbank,Tiger Capital,and a16z that winners of their size can come out and deliver returns to the whole fund.Nubank has managed to take a two-digit market share in an industry full of incumbents,with a strategy based on cust

230、omer service and tech.A successful IPO will yield positive signals to VC investors and increase the flow of future capital to the region.The largest deals of 2021 for B2B FintechMexico.The largest deals for B2B Fintech were mostly led by companies in the lending and payments space.This underscores t

231、wo things:1)the support fintech players have given to SMEs through credit facilities during the economic crisis and 2)how digitalization of businesses,especially in e-commerce,has skyrocketed along with online payment solutions.Source:Crunchbase and PitchbookPowered by Bing GeoNames,Microsoft,TomTom

232、 US$235MColombia.Brazil.Argentina.Payments and lending companies came out strong.Ecuador.US$250M US$14.8M US$140M US$86M US$410M US$430M US$2B US$45MM&A transaction-HighlightsCreditas,the Brazilian lending platform,acquired insurtech Minuto Seguros to expand its product offering.It has also bought e

233、lectric motorcycle manufacturer Voltz for US$18.2M and Bcredi to boost its real estate vertical.Digital bank Nubank acquired Olivia,an AI financial assistant that learns spending patterns and recommends purchases.BS2 is a digital bank for companies and individuals incorporated in Brazil,and the acqu

234、irer of WEEL,an AI platform that offers financing for SMEs through prepayment of receivables.Mexican fintech Konfio acquired mobile payment provider Sr.Pago,which will strengthen the support the company gives to SMEs.IPO transactionsNubanks IPO at the end of the year raised US$2.6B by selling 289 mi

235、llion shares at a US$48B valuation on its debut.Nubanks current valuation,at US$23B,puts it around 40%of Brazilian bank Itas valuation,currently worth US$58B.dLocal,a cross-border payment platform,raised US$617.65M in a NASDAQ IPO.Potential future IPOs in the short to medium-termBrazilian fintechs C

236、reditas and Ebanx look for an IPO,as well as Mexican fintech Clip.Source:CBI Insights global fintech report Yearly fintech M&A exits in LatAmQuarterly fintech M&A exits in LatAmM&A activity for B2B Fintech dominatesWith record levels in 2021,the region has seen 74 deals made throughout the year.Sour

237、ce:LatAm Fintech Funding Report 2021,PitchbookMost active B2B Fintech investors in LatAm throughout 2021Source:LatAm Fintech Funding Report 2021,PitchbookMajor LatAm-based investorsfor B2B FintechOpen Banking is the concept under which financial institutions can share information from customers with

238、 third parties via API,in order to increase innovation,expand user experience,reduce transaction times,and optimize for lower costs.Open Banking aims at bridging the financial inclusion gap in LatAm and providing access to banking services while fostering financial inclusion.In terms of regulation:P

239、SD2 regulation for Open Banking,initially implemented in the UK,has been gradually adopted in LatAm with countries such as Mexico having passed a similar law(ley fintech)to regulate Open Banking.Fintech through Open Banking is in a unique position to increase the market size by generating greater fi

240、nancial inclusion.Their business model:API fintechs monetize through a cost per call or sharing agreements with banks and financial institutions.Promising startups in the space Belvo A fintech whose core product is an API that connects users with their banking,financial,and fiscal data.Quanto A sing

241、le fully transactional API for all financial service providers.Prometeo API platform for LatAm.It is the largest player in this field,with the highest number of connections.Has relations with 44financial institutions and operates in 9 regional markets.Nufi Mexican fintech that empowers companies to

242、build financial products in Latin America.Challenges and opportunities Foreign exchange markets could be where API is deployed next.Credit and microcredit fintechs are increasingly relying on API solutions to bring higher efficiencies and speed in loan deployment to their customers.Citi Banamex,Mexi

243、cos second-largest bank,announced it is building new APIs to connect fintechs in real-time,giving them access to relevant commercial information.Open Banking platforms or API FintechsBaaS is all about taking bank functionality,compartmentalizing it,and then individually offering each function to non

244、-financial companies.Users connect through APIs and BaaS players integrate with them so the non-financial companies can offer deposits,money transfers,payments,lending,currency exchange,and many other products.This possibility allows for a higher lifetime value and increased retention from the end u

245、sers.Their business model:These companies operate under a white-label banking platform or core banking software where they charge license fees and transactional fees.Promising startups in the space Swap So Paulo-based BaaS that empowers companies to offer fintech-like products.Dock Brazilian BaaS th

246、at provides white-label solutions to cover payments,digital/physical cards,and accounts to non-bank players.Pomelo Provides fintech infrastructure and financial services for fintechs and digital companies.Challenges and opportunities The founders of the companies interviewed for this report agreed t

247、hat fintech-like services will tend to increase in the region and across industries and this is where BaaS solutions will make a strong impact.There are around 69 fintechs who currently offer fintech-as-a-service in LatAm.Banking as a Service(BaaS)or Embedded financeSource:KoreFusion 2020 LatAm Fint

248、ech ReportThe problem is called credit gap for SMEs in LatAm.In a nutshell,banks do not know how to assess risks on SMEs,thus charging high interest rates and passing on credit opportunities for businesses.This created the perfect breeding ground for credit fintechs in the region.Credit fintechs off

249、er higher transparency on rates and prices,which allows them to build trust with SMEs.Additionally,credit fintechs offer faster and more flexible solutions to SMEs,which are always in constant need of liquidity.Lack of legacy infrastructure(bank branches)and capital requirements(minimum reserves)for

250、 these lenders have provided a great competitive advantage over traditional banks.Their business model:monetize primarily by originating loans and charging origination and related securitization fees.Promising startups in the space Credijusto Provides an online lending platform designed to offer eas

251、y,reliable,and transparent credit for SMEs.R2 Capital Offers financing for SMEs working capital needs.Joined Y Combinator in in Winter 2021.Dinie Flexible,convenient,and easy to use financing solutions for SMEs embedded into digital platforms.Challenges and opportunities Increasingly competitive lan

252、dscape in which 1 out of 5 fintechs operates in the lending sector.This vertical,along with payments,has the largest regional presence.Increased competition demands greater sophistication in the product offering,and single-product companies operating in this space will need to diversify to stay ahea

253、d.The convergence between payments and credit is an interesting topic for lending fintechs.Payment terminals offer transactional data,which facilitates the analysis and collection of loans.Partnerships between lending,payment processors,and POS(Point of Sale)should be key moving forward.LendingSome

254、fintechs are solemnly focused on POS financing,like Addi and Flexico,while others offer the same service as part of a greater product offering,like Rebel and Kueski.POS financings are structured a little bit differently than lending products,as these come with an installment plan that makes the cost

255、 to the borrower more transparent than credit cards,for instance.For merchants,these solutions translates into higher conversion rates,while customers enjoy the simplicity and transparency of each financing transaction.Their business model:they can generate revenue via two streams:1)Initially charge

256、 merchants a percentage fee on each transaction or a flat fee per transaction;2)then also charge the end customer an interest rate on the“loan”based on credit score and duration of payment,though most players dont monetize from their customers if they pay on time.Promising startups in the space Addi

257、 Provides credit and banking solutions through a BNPL(Buy Now Pay Later)business model.Kueski With KueskiPay,the fintech offers a BNPL solution for merchants and end users.Atrato Its a BNPL that integrates at the checkout site for shops,both online physically.Challenges and opportunities Covid-19 ha

258、s accelerated e-commerce by 10 years globally,and LatAm is no exception,with a projected CAGR of 15%by the end of 2024.This generates an immense opportunity for POS financing players.The higher the e-commerce transactions,the higher the POS financing opportunity.According to dLocal,54%of e-commerce

259、spending in 2020 in Brazil was made through an installment plan offered by the merchant.The partnership between dLocal and Dinie,where the latter will be fully integrated with dLocal to offer pay-later solutions to SMEs,is a clear case of to where the BNPL vertical is moving(B2B).Point-of-sale(POS)f

260、inancingPayment processors sit between the payment gateway and the issuer/acquiring bank.They notify the issuer bank when an online purchase occurs at a merchants website and makes sure to settle the operation by crediting the merchants account after the sale.Payment gateways are the middleman betwe

261、en the merchant and their customers.They provide security for the transaction while sending credit card information to the payment processor and back to the customer.This is the interface the end customer sees when they enter the payment site during the last stretch of an online purchase.POS systems

262、 are a combination of hardware and software that allow users and merchants to complete a buying transaction.Cashless methods such as credit and debit cards need a POS system to process the payment and close the sale,whether in person or online.Their business model:monetize by taking a fee on the tot

263、al payment volume that is processed.POS systems generate revenue via sales of their hardware and software.Promising startups in the space(Payment processor)Kushki Digital payment platform based out of Ecuador.Epayco Offers services as a payment gateway and aggregator,headquartered in Colombia.Ebanx

264、Offers end-to-end payment solutions across the entire e-commerce transaction flow.Promising startups in the space(POS hardware)Zoop POS hardware solutions for merchants and payment gateway.Clip Terminal for SMEs to accept all electronic payment transactions.Billpocket Merchant service aggregator and

265、 mobile payments company.Challenges and opportunities The payment landscape in the region is highly fragmented,due to a lack of standardization of local customs and regulations.Pushing for greater connectivity infrastructure will be key for customers to make speedy payments in different countries ac

266、ross the region.5G technology is transforming payments through high-speed and always-on connection devices,where merchants and gig workers can unlock more information about their markets,products,and customers.As the infrastructure opens its way through the region,local players should be prepared fo

267、r the opportunities ahead.Payment Processors and NetworksCompanies offering accounting,finance,and management solutions for SMEs operate as cloud-based applications that link to a firms finances to deliver back-office solutions.The goal is to increase productivity in their finance or back-office tea

268、ms by allowing them to digitize a lot of the previous repetitive and operational tasks.FP&A SaaS solutions offer easy reporting and analysis to SMEs finance departments and allow for faster decision-making at the management level.Services can also expand to accounting,payroll,and electronic invoicin

269、g,allowing small businesses to be more agile,profitable,and efficient in their day-to-day tasks.Their business model:they generate revenue via a SaaS model where they charge subscription fees to their customers.Promising startups in the space ContaAzul Brazilian-based platform for SMEs that helps th

270、em to organize financial routines in one place.Nubox Software for accounting,payroll,and electronic invoice services for accountants and SMEs.Treinta Digital ledger for SMEs in LatAm.Challenges and opportunities This type of companies will eventually run the risk of becoming a commoditized solution

271、if they dont expand their stack and move towards embedded finance.Embedded procurement is a possibility that is gaining traction by allowing merchants to place orders in the same platform where they manage their accounting,payroll,and so on,which will be a competitive advantage and add a newand lucr

272、ative revenue opportunity.Accounting,Finance,and ProcurementWith the rise of fintech and online transactions,AML(Anti-money laundering)and KYC(Know Your Customer)procedures became imperative to detect fraud around financial operations.KYC is part of AML,which is a regulatory requirement for fintech

273、companies and financial institutions to validate customers identity documents.Companies in this space use machine learning and AI to automate onboarding processes via face match,background check,risk analysis,ID validation,and automated optical character recognition,to help clients avoid fraud.High

274、costs for the implementation of AML and KYC procedures mean budgetary constraints for SMEs and rising fintechs,so externalproviders are tasked with easing the pressure with flexible API-based software.Their business model:monetization comes primarily in the form of SaaS and on-premise offerings.Prom

275、ising startups in the space Idwall A Brazilian fintech that develops software to help SMEs in the customer credentialing process.Challenges and opportunities Regulations affecting the financial service industry are complex and in constant change due to market conditions or geography.The technology b

276、ehind validation,governance,and supervision that these types of fintechs currently use will come with continuous evolution,which can be costly to develop.Financial data platforms for AML and KYC(Anti-fraud)Few verticals in fintech tackle financial inclusion so directly as pay-on-demand startups,whic

277、h offer employees the possibility to advance their already earned salaries at any moment.These companies aim to reduce the employee liquidity gap between paychecks and ease peoples financial stress,as they avoid expensive loans.The business model for Earned Waged Access(EWA)companies is mostly B2B a

278、nd is offered to enterprises as a benefit for theiremployees and a way to motivate and retain talent.Their Business Model:They generate revenue by charging employees a fixed or variable amount for every dollar withdrawn.Promising startups in the space Minu The Mexico-based fintech aims to revolution

279、ize the financial health of Mexican employees.Xerpay EWA solution fintech with headquarters in Brazil.Castor A Mexico-based EWA fintech with B2B and B2C solutions.Challenges and opportunities Successful payroll fintechs should understand the liquidity needs of the region as they expand,and know well

280、 the differences between wage cycles in each country.Algorithms should be flexible enough to accommodate their technology to the specifics of each market.The lack of a centralized payment software provider to distribute payments for enterprises stands as a challenge for fintechs.The decentralized na

281、ture of this system pushes EWA fintechs to find ways to circumvent or navigate the fragmented landscape while they aim to offer a frictionless solution to their clients.Payroll and BenefitsDetails of most important B2B Fintech Players 2021PaytechHQ:Mexico City,MexicoValuation to date:US$2BFunding to

282、 date:US$453.3MBusiness Model:System for electronic payments to businessesFounders:Adolfo Babatz&VilashPoovalaStage:Series DHQ:Montevideo,UruguayValuation to date:US$6.5BFunding to date:US$357MBusiness Model:Cross-border payment processor for merchants in emerging marketsFounders:Sebastin Kanovich&S

283、ergio FogelStage:Public CompanyHQ:So Paulo,BrazilValuation to date:US$4.8BFunding to date:US$1.9BBusiness Model:Online payment-based e-commerce service for commercial operationsFounders:Luis FriasStage:Public CompanySource:Crunchbase,Pitchbook*Market cap as of the beginning of November 2022Details o

284、f most important B2B Fintech Players 2021Digital BanksHQ:So Paulo,BrazilValuation to date:US$23BFunding to date:US$3.9BBusiness Model:Digital bankFounders:Cristina Junqueira,David Vlez,and Edward WibleStage:Public CompanyHQ:So Paulo,BrazilValuation to date:unknownFunding to date:US$2.3BBusiness Mode

285、l:Digital bankFounders:Marcelo KalimStage:Series E/Corporate RoundSource:Crunchbase,Pitchbook*Market cap as of the beginning of November 2022Details of most important B2B Fintech Players 2021LendingHQ:Mexico City,MexicoValuation to date:US$1.3BFunding to date:US$706MBusiness Model:Lending platform,p

286、ayments,and software tools for SMEsFounders:Francisco Padilla and David AranaStage:Series EHQ:Mexico City,MexicoValuation to date:unknownFunding to date:US$521.3MBusiness Model:Lending platform for SMEsFounders:David Poritz and Allan PascalStage:GrowthHQ:So Paulo,BrazilValuation to date:US$4.8BFundi

287、ng to date:US$1.1BBusiness Model:Lending platform for retail and corporatesFounders:Sergio FurioStage:Series FSource:Crunchbase,Pitchbook(Currently known as Covalto)Details of most important B2B Fintech Players 2021InfrastructureHQ:So Paulo,BrazilValuation to date:unknownFunding to date:US$56MBusine

288、ss Model:API FintechFounders:Pablo Viguera and Uri TintoreStage:Series AHQ:Buenos Aires,ArgentinaValuation to date:unknownFunding to date:US$60MBusiness Model:Fintech infrastructure and financial servicesFounders:Gaston Irigoyen,Juan Fantoni,and Hernan CorralStage:Series AHQ:So Paulo,BrazilValuation

289、 to date:US$1.5BFunding to date:US$280MBusiness Model:Financial technology that integrates card issuing and core banking servicesFounders:Fred Amaral and DiogoFrenkelStage:Private EquitySource:Crunchbase,Pitchbook*Market cap as of the beginning of November 2022The TrendsGlobal TrendsPayments Payment

290、 processing B2B payment solutionsAlternative Lending Revenue-based Financing B2B Buy Now Pay LaterSME Software Tools Expense Management,Accounting,and ProcurementOpen Banking Infrastructure API-based banking softwarePayroll&Benefits Advanced salaries and reward programsGlobal TrendsDefinitionPaytech

291、 companies use technology to enable the electronic transfer of value.ScopeIndependent software vendors(ISV)will be taking full advantage of the payment-facilitator-as-a-service model/Increase in e-commerce transactions presents a huge opportunity for B2B payment players.Latest Deal Activity in LatAm

292、Higo,a B2B payment platform,secured US$23M in a Series A(Mexico).DefinitionAlternative lending companies provide funds to companies without the need for a traditional banking institution.ScopeRevenue-based financing fintechs have gone through a bullish year in 2021 and this year should be no differe

293、nt/The financing gap for SMEs in LatAm a big opportunity for B2B BNPL.Latest Deal Activity in LatAmFairplay,a revenue-based financing fintech,closed US$35M in a Series A(Mexico).Truepay,a B2B BNPL player,received US$32M in a Series A financing(Brazil).DefinitionSME software tools have a broad applic

294、ability but,in a nutshell,they increase operational efficiencies for companies.ScopeExpense management software and corporate cards fintechs will be taking advantage of the unbanked SMEs/SMEs that outsource most of their financial services will be making the smart move this 2022.Latest Deal Activity

295、 in LatAmClara,a spend management software,closed a US$30M funding round and received US$50M in revolving debt(Mexico).BHub,the CFO-as-a-service fintech,acquired US$20M in a Series A financing(Brazil).DefinitionOpen banking is a system that provides third-party access to financial data using applica

296、tion programming interfaces(APIs).ScopeEmbedded finance will completely change how we consume financial services/Open banking will keep powering the financial revolution,and API fintechs are making it all happen.Latest Deal Activity in LatAmPomelo,a leading fintech-as-a-service company,secured US$35

297、M in a Series A(Argentina).Belvo,an API fintech,raised US$43M in a a Series A(Brazil).DefinitionPayroll fintechs partner with corporates,HR software providers,and payroll systems to provide flexible access to earned wages.ScopePayroll-as-a-service is still going to be changing the lives of many Lati

298、n American workers/Increased connectivity gives way to a new form of understanding reward programs.Latest Deal Activity in LatAmCastor,a payroll-on-demand fintech,received US$1.8M on a pre-Seed round(Mexico).Reworth,a rewards fintech,raised US$2.8M in a Seed round.Payment facilitators(PF)are bridgin

299、g the gap between software solutions and payment capabilities.These work as a white-label solution that embeds into the software and is delivered via APIs.Payment facilitators processed US$929B billion in gross payment volume,which represents 6%of total global transactions.Some expect PF gross payme

300、nt volume to reach US$2T by 2025.PaymentsPayment processingAt the intersection between software and payments lie new opportunities for fintech players.Source:StatistaTransaction volume in billion U.S.dollarsTransaction volume from payment facilitatorsTransaction volume by payment facilitators has se

301、en a staggering worldwide growth from 2016 to 2021 Deal ActivityBenefits are:Merchants:wont need to source a payment and software provider separately and will be able to offer a better customer experience,as services wont be spread out across different suppliers.ISV:For ISVs,they will be able to div

302、ersify their revenue stream by owning the whole payment processing experience.Ultimately the ISVs will be able to capitalize on the huge payment market through the Payment Facilitator model.US$70M total funding US$126M total fundingUS$24.2M total fundingThis business model allows Independent Softwar

303、e Vendors(ISV)to accept,manage,and monetize payments in-house,rather than refer users to third-party providers such as PayPal.PaymentsPayment processingB2B Payment solutions are a growing need for the digitization of of business payments,by advancing how B2B players are performing their transactions

304、.The global B2B payments market was worth US$870B in 2020 and is expected to reach US$1.19T by 2028,according to Allied Market Research.PaymentsB2B Payment solutionsExpected growth of B2B E-commerce transactions in LatAm means greater opportunities for B2B Payment.Platforms to follow suit.Source:Sta

305、tista,UNCTAD B2B e-commerce sales 2019(billions)Share of B2B e-commerce sales in total e-commerceBrazil,a country whose GDP is 12.5%larger than Spains,has 40 x less E-commerce transactions and 1.7x lower B2B E-commerce penetration.As Latin Americas largest E-commerce market(30%Mkt share),Brazil has

306、huge upside potentialB2B E-commerce share out of the total of E-commerce transactions in 2019B2B E-commerce Potential Deal ActivityBenefits are:Platforms will offer a variety of payment methods which will include ACH,credit cards,or wire tranfers.Platforms will also be able to underwrite the transac

307、tion financing directly from their checkout,so companies can offer better terms to their suppliers.Payments and purchasing will tend to increasingly happen online,which will open an interesting opportunity for businesses to offer seamless experiences to their customers on their buying journey.Custom

308、ization and personalization of the buying and paying process would be key for businesses wanting to offer a consumer-like experience to their buyers.PaymentsB2B Payment solutionsUS$26.3M total fundingUS$86.5M total fundingGlobal TrendsDefinitionPaytech companies use technology to enable the electron

309、ic transfer of value.ScopeIndependent software vendors(ISV)will be taking full advantage of the payment-facilitator-as-a-service model/Increase in e-commerce transactions presents a huge opportunity for B2B payment players.Latest Deal Activity in LatAmHigo,a B2B payment platform,secured US$23M in a

310、Series A(Mexico).DefinitionAlternative lending companies provide funds to companies without the need for a traditional banking institution.ScopeRevenue-based financing fintechs have gone through a bullish year in 2021 and this year should be no different/The financing gap for SMEs in LatAm a big opp

311、ortunity for B2B BNPL.Latest Deal Activity in LatAmFairplay,a revenue-based financing fintech,closed US$35M in a Series A(Mexico).Truepay,a B2B BNPL player,received US$32M in a Series A financing(Brazil).DefinitionSME software tools have a broad applicability but,in a nutshell,they increase operatio

312、nal efficiencies for companies.ScopeExpense management software and corporate cards fintechs will be taking advantage of the unbanked SMEs/SMEs that outsource most of their financial services will be making the smart move this 2022.Latest Deal Activity in LatAmClara,a spend management software,close

313、d a US$30M funding round and received US$50M in revolving debt(Mexico).BHub,the CFO-as-a-service fintech,acquired US$20M in a Series A financing(Brazil).DefinitionOpen banking is a system that provides third-party access to financial data using application programming interfaces(APIs).ScopeEmbedded

314、finance will completely change how we consume financial services/Open banking will keep powering the financial revolution,and API fintechs are making it all happen.Latest Deal Activity in LatAmPomelo,a leading fintech-as-a-service company,secured US$35M in a Series A(Argentina).Belvo,an API fintech,

315、raised US$43M in a a Series A(Brazil).DefinitionPayroll fintechs partner with corporates,HR software providers,and payroll systems to provide flexible access to earned wages.ScopePayroll-as-a-service is still going to be changing the lives of many Latin American workers/Increased connectivity gives

316、way to a new form of understanding reward programs.Latest Deal Activity in LatAmCastor,a payroll-on-demand fintech,received US$1.8M on a pre-Seed round(Mexico).Reworth,a rewards fintech,raised US$2.8M in a Seed round.Revenue-based financing fintechs have had a good success in Europe and the United S

317、tates.This non-dilutive finance is designed to provide liquidity for working capital,marketing,and other overheads that do not require a large volume of cash upfront.This allows founders to cover their financing needs without giving away equity or dealing with restrictive covenants.They service the

318、debt through a flexible schedule that adapts to the cyclicality of their business.The global revenue-based financing market was worth US$901M in 2019 and is expected to reach US$42B by 2027,growing at a CAGR of 61.8%.Alternative LendingRevenue-based financingWith availability of data comes easier cr

319、edit decisions and as this becomes more accessible,revenue-based financing players will thrive.Number of rounds every 12 monthsSource:Dealroom All Greater than$2MRevenue-based financing deals have seen an incredible increase in 2021,with a total of US$2B raised from companies in this space during 20

320、21.The number of deals in 2021 were 2.6x those of 2020.Deal ActivityBenefits are:Cheaper source of financing compared to venture capital or bank loans.Flexible payment schedule tailored to each business operating as an e-commerce os SaaS.Alternative LendingRevenue-based financingUS$323.1M total fund

321、ingUS$949.6M total fundingUS$118.9M total fundingThe success of B2C Buy Now Pay Later(BNPL)has given food for thought for other players to incorporate BNPL solutions for B2B segments.B2B transactions make up more than twice the volume for B2C and there some market conditions that make this business

322、model specially interesting.Success from BNPL for B2C has been huge,and digital solutions have streamlined lending processes while ovid-19 has put pressure on SMEs cash flow.With rising B2B e-commerce transactions,we should expect BNPL solutions on this segment to grow.SMEs in general,but specially

323、in LatAm,suffer from a huge financing gap worth close to US$1.2T.Alternative LendingB2B Buy Now Pay LaterStill a relatively untapped market,B2B BNPL means opportunity for new players to join in.Partnerships like dLocal and Dinie reaffirms our views on this.Share of e-commerce transactions made using

324、 Buy Now,Pay Later servicesSource:InsiderIntelligence 2020 2024The huge success of BNPL for B2C ecommerce is set to trickle down into the B2B space,prompting innovation and competition Deal ActivityBenefits are:Increased flexibility as companies have more specific financial needs than individuals.Ea

325、ses pressure on cash flow and avoids overloading other financing vehicles.Alternative LendingB2B Buy Now Pay LaterEuros 129.7M total funding$462M total fundingGlobal TrendsDefinitionSME software tools have a broad applicability but,in a nutshell,they increase operational efficiencies for companies.S

326、copeExpense management software and corporate cards fintechs will be taking advantage of the unbanked SMEs/SMEs that outsource most of their financial services will be making the smart move this 2022.Latest Deal Activity in LatAmClara,a spend management software,closed a US$30M funding round and rec

327、eived US$50M in revolving debt(Mexico).BHub,the CFO-as-a-service fintech,acquired US$20M in a Series A financing(Brazil).DefinitionAlternative lending companies provide funds to companies without the need for a traditional banking institution.ScopeRevenue-based financing fintechs have gone through a

328、 bullish year in 2021 and this year should be no different/The financing gap for SMEs in LatAm a big opportunity for B2B BNPL.Latest Deal Activity in LatAmFairplay,a revenue-based financing fintech,closed US$35M in a Series A(Mexico).Truepay,a B2B BNPL player,received US$32M in a Series A financing(

329、Brazil).DefinitionOpen banking is a system that provides third-party access to financial data using application programming interfaces(APIs).ScopeEmbedded finance will completely change how we consume financial services/Open banking will keep powering the financial revolution,and API fintechs are ma

330、king it all happen.Latest Deal Activity in LatAmPomelo,a leading fintech-as-a-service company,secured US$35M in a Series A(Argentina).Belvo,an API fintech,raised US$43M in a a Series A(Brazil).DefinitionPayroll fintechs partner with corporates,HR software providers,and payroll systems to provide fle

331、xible access to earned wages.ScopePayroll-as-a-service is still going to be changing the lives of many Latin American workers/Increased connectivity gives way to a new form of understanding reward programs.Latest Deal Activity in LatAmCastor,a payroll-on-demand fintech,received US$1.8M on a pre-Seed

332、 round(Mexico).Reworth,a rewards fintech,raised US$2.8M in a Seed round.DefinitionPaytech companies use technology to enable the electronic transfer of value.ScopeIndependent software vendors(ISV)will be taking full advantage of the payment-facilitator-as-a-service model/Increase in e-commerce trans

333、actions presents a huge opportunity for B2B payment players.Latest Deal Activity in LatAmHigo,a B2B payment platform,secured US$23M in a Series A(Mexico).Corporate cards and expense management fintechs tailored to SMEs have picked up momentum in the past year.These fintechs offer SMEs the possibility of fast sign-up,digital cards,higher credit limits,and integration with accounting and spend manag