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Thiago Paiva
FINTECHMARKETINLATINAMERICA1H2019:
Investmentanddeals
By Thiago Paiva

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Thiago Paiva
1. Intro
2. The Author
3. Fintech Ecosystem
4. Investments
○ Total Investments in the Region
○ Investments per Country
○ Investments per Month
○ Investments per Industry Segment
○ Main Investments Rounds
○ Most Active Investors in Fintech
5. Merger & Acquisitions
6. Final Thoughts
7. Resources
Index

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Thiago Paiva
First of all, thanks for reading this material! My name is Thiago Paiva and I've been working with
startups and innovation for the past 9 years in Brazil, Mexico, US, and Singapore.
I have invested and accelerated more than 60 startups from which more than 20 were fintech startups
from 8 different countries while working at Wayra in Brazil and Startupbootcamp Fintech in Mexico.
Since I started to invest in fintechs, in 2013, the market radically changed. In less than 6 years, we saw
the born of the first fintech unicorns in the region as well as IPOs from Stone (NASDAQ) and Pagseguro
(NYSE) in the US.
Since beginning of this year, I started writing a monthly snapshot of the fintech ecosystem in Latin
America at Iupana (Link to my post about June/19). Therefore, I decided to structure and analyze all
the information gathered to create this material that I hope will be helpful not only to the Latin
American fintech community but also to shed some light to this region that has so much potential to
investors and entrepreneurs from all over the world.
Finally, I appreciate if you share this material!
Thiago Oliveira de Paiva
Intro

4.
Thiago Paiva
● 9 years of experience working with startups and innovation
● Evaluated more 2,500 startups and invested in more than 60 startups
through acceleration programs in distinguished global startup accelerators
(Startupbootcamp and Wayra)
● Led the design and implementation of two startup acceleration processes
and one scale program
● Fintech expert who worked with more than 25 fintechs from 9 different
countries
● Cofounder of Liquia Digital Assets, an investment platform for investing
globally.
● Studied Fintech at MIT and Business with Concentration in Finance at
UCLA
The Author

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Thiago Paiva
FINTECH ECOSYSTEM

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Thiago Paiva
The fintech ecosystem in Latin America is growing quite strongly through the past few years, drawing
attention from reputable investors such as Andreessen Horowitz, Sequoia Capital, and SoftBank.
In Latin America, I believe we have an interesting combination that creates a perfect setup for fintechs to
thrive and prosper. Just to highlight some of the main issues:
● People in the region suffered many financial crises, making them very skeptical on banks;
● The high level of informal economy excludes people from accessing basic financial services such as
payments and credit;
● Half of it's 640 million population is unbanked;
● In most countries, there is an oligopoly of financial institutions, leading to poor customer support,
abusive and hidden fees, and low digital effort;
On the other side, Latin America has 68% of smartphone penetration with a highly connected population,
looking for solutions beyond the traditional financial systems to solve their problems.
With that setup in place, fintechs are starting to draw more and more attention of customers and investors.
Fintech Ecosystem in Latin America
Source: The Mobile Economy Latin America and the Caribbean 2018

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Thiago Paiva
124 Updated Mar/19
394 Updated Jun/19
Number of Fintechs per Country
Source: IDB-Fintech Latin America 2018 , and Fintech Radars from Finnovista
According to IDB, Latin America has around 1166
fintechs.
Brazil (377) and Mexico (394) are leading in number
of fintechs, with Mexico having a few more but with
Brazilian data a little outdated.
The other countries in the region are way behind
with Colombia (124) and Argentina (110) trying to
establish themselves as the third largest ecosystem.
377 Updated May/18
110 Updated Mar/18
75 Updated Dec/17

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Thiago Paiva
Fintech Radar - Mexico
Source: Finnovista Fintech Radar Mexico 2019

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Thiago Paiva
Fintech Radar - Brazil
Source: Finnovista Fintech Radar Brazil 2018

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Thiago Paiva
Fintech Radar - Colombia
Source: Finnovista Fintech Radar Colombia 2019

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Thiago Paiva
Fintech Radar - Argentina
Source: Finnovista Fintech Radar Argentina 2018

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Thiago Paiva
Fintech Radar - Chile
Source: Finnovista Fintech Radar Chile 2017

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Thiago Paiva
INVESTMENTS

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Thiago Paiva
Since 2018, venture capital investment in Latin America has
boomed, with 2018 reporting a record breaking US$ 1.976
billion raised in 463 deals, a 73% increase from 2017. And
fintech has increased year after year its relevance.
This year started with the amazing new of the US$ 5 billion
investment fund focused on the region by Softbank, which
definitely draw attention from many other international
investors to what is happening in the region.
With that, we're looking for another record breaking year, and
the numbers from the first 6 months of just the fintech sector
(which is the focus of this report) confirm that tendence, with
a total of US$ 826.7 M (US$ 630.3 M in equity and US$ 196.4 M
in debt).
Investments in Latin America
Source: LAVCA Industry Data and proprietary data

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Thiago Paiva
Total Investments in the Region
Latin American fintechs raised a total of US$ 826.7 M (US$ 630.3 M in equity and US$ 196.4 M
in debt) in 51 investments in the first six months of 2019. From the 49 equity investments, 14
didn't have their amount disclosed, which amounts obviously weren't considered into the
analysis.
Source: proprietary data from deals

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Thiago Paiva
Number of Investments per Country
Source: proprietary data from deals
Brazil is clearly leading the
investments in the region of more than
50% of all the deals in the region.
Mexico secured it's second spot while
Colombia and Chile appeared in third
place.

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Thiago Paiva
Volume of Investments per Country
Considering the volume of investments, the
Brazilian fintechs were able to capture 64.5%
of all the disclosed investments in the region
while Mexico stay strong in the second
position with 24.4%. Argentina was able to spot
a third place.
A few large deals in Brazil (Creditas - US$ 231
M), Mexico (Clip - US$ 100 M), and Argentina
(Technisys - US$ 50 M) disproportionally
weight on the comparison.
Source: proprietary data

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Thiago Paiva
Volume of Investments per Month
March was the month with more number of deals, 10 deals in total, but the month with most
investment volume (US$ 292.5M) was June, with more than the double of the second month,
all due to the massive round Creditas received from Softbank and other investors.
Source: proprietary data

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Thiago Paiva
Investment by Industry Segment
Lending is definitely the hottest fintech segment in Latin America now, amounting to 19 deals (14
consumer and 5 business) in a total of more than US$ 330 M invested. Followed by Payments &
Remittances with US$ 184.1 M. We're seeing a shift as most of the early fintechs in the market were
more focused in payments (Stone, PagSeguro, Moip, Mercado Pago…).
Source: proprietary data

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Thiago Paiva
US$ 12.5 Million
(CO - Jun 19)
Main Deals
US$ 100 Million
(MX - May 19)
US$ 70 Million
(BR - Mar 19)
US$ 50 Million
(AR - Apr 19)
US$ 231 Million
(BR - Jun 19)
US$ 30 Million
(BR - Apr 19)
Source: proprietary data
US$ 20 Million
(BR - Jun 19)
US$ 20 Million
(BR - Jan 19)

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Thiago Paiva
Main Deals - Comparative Chart
231,000,000.00
Source: proprietary data
When put the 10 largest deals in a chart, it's interesting to observe that venture capital deals work in a
power law distribution, with the Creditas deal more than double the size of the second largest one.

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Thiago Paiva
Most Active Investors by Number of Deals
4
3
3
3
3
3
2

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Thiago Paiva
Merger & Acquisitions

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Thiago Paiva
In general, Latin America has lacked M&A deals for a while, and
this has been the biggest complain of investors: "Latin America
doesn't have exits".
However, since last year, we saw a couple of successful exits that is
changing the mind of most investors. The IPOs of the Brazilian
fintechs PagSeguro and Stone which achieved valuations on the
size of billions. Also, the 99 acquisition by Didi for a US$ 1 billion
showed that the ecosystem is getting mature enough to not only
have exits but unicorn-sized exits.
While last year was an amazing year for M&As, this is still warming
up with only 4 deals made and no one with the size we saw last
year.
Merger & Acquisitions
Source: LAVCA Industry Data

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Thiago Paiva
Merger & Acquisitions
Undisclosed
(MX - May 19)
Undisclosed
(MX - Feb 19)
Undisclosed
(MX - Jun 19)
US$ 24.4 Million
(BR - May 19)
Source: proprietary data
POLYGON FINTECH
Acquired by Acquired by Acquired by Merged with

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Thiago Paiva
FINAL THOUGHTS

27.
Thiago Paiva
While the ecosystem in the region is maturing quite fast, most investment is still
concentrated in Brazil with growing opportunities in Mexico and Colombia.
Although Mexico has a large number of fintechs, it has still a much less mature
ecosystem as Brazil. We can observe that on the number and size of deals, also the exits
in the market are very few and small. I expect that to change in soon as the fintechs
mature and more investors see opportunity in that market.
Colombia is starting to bring attention from investors as it has a somehow large market
that is growing, however, fintechs in the region still face a challenge to fundraise as the
VC market is not structured there.
Final Thoughts

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Thiago Paiva
Final Thoughts
Also, a trend that is emerging is funds from Brazil and Mexico to start to invest in outside
their boundaries, I'm expecting to see more and more deals like that in the future. I'm
also starting to see some fintechs such as Nubank and Uala starting to expend in the
region, tendence I believe will intensify.
Finally, I'm quite bullish about the prospects of fintechs in the region, especially with the
announcement of the Softbank US$ 5 billion fund focused on the region, which will shed
more light on the region for international investors. This will bring more money to the
fintechs to grow and compete with the incumbents.
Do you agree with me? I would love to hear your opinion! Send me a message at
thiago.o.paiva@gmail.com
@ThiagoPaivaFollow me at:

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Thiago Paiva
RESOURCES

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Thiago Paiva
Resources
● IDB Report - Financial Latin America 2018: Growth and Consolidation
● LAVCA Report - Latin America Startup Heatmap
● GSMA Intelligence Report - The Mobile Economy Latin America and the caribbean 2018
● Finnovista Fintech Radar Mexico 2019
● Finnovista Fintech Radar Brazil 2018
● Finnovista Fintech Radar Colombia 2019
● Finnovista Fintech Radar Argentina 2018
● Finnovista Fintech Radar Chile 2017
● ALLVP - Early Stage VCs Active in Latin America
● Startup Biz Model Blog
● Iupana - LatAm Fintech Snapshot

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Thiago Paiva
THANKSFORREADING!
Please, don't be shy and share this material!