The document summarizes fintech investment and deals in Latin America in the third quarter of 2019. It finds that total fintech investments in the region reached $2.46 billion, with Brazil attracting the majority (82.9%) of investments. The largest deals included a $400 million round for a Brazilian lending platform and Softbank's $331.7 million investment in a Brazilian digital bank. It was noted that digital banking emerged as the hottest investment segment, capturing 43.3% of total funding.

1. Thiago Paiva
FINTECHMARKETINLATINAMERICA3Q2019:
Investmentanddeals
By Thiago Paiva

2. 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
○ Fintech Radars
Index

3. Thiago Paiva
Intro
First of all, thanks for reading this material! My name is Thiago Paiva and I'm a fintech entrepreneur, investor,
and columnist. 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.
I write a monthly snapshot of the fintech ecosystem in Latin America at Iupana (link) and I also wrote a couple
of other articles (Techcrunch - The Emergence of the Super Apps in Latin America) and reports (Fintech
Investment Report Latin America 1H2019 and Fintech Market in Singapore 2018).
I write this report as away to shed some light to the fintech ecosystem in Latin America that has been growing
quite fast..
Finally, I appreciate if you share this material!
Thiago Oliveira de Paiva

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
● Fintech columnist at TechCrunch and Iupana
● 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

5. Thiago Paiva
FINTECH ECOSYSTEM

6. 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

7. 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 Chile (112) trying to establish
themselves as the third largest ecosystem.
377 Updated May/18
110 Updated Mar/18
112 Updated Aug/19

8. Thiago Paiva
INVESTMENTS

9. 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.
With that, we're already on a record breaking
year, and we still have the 4th quarter to go. On
just the fintech sector (which is the focus of
this report), we had a total of US$ 2.46 B (US$
1.726 B in equity and US$ 545.2 M in debt).
Investments in Latin America
Source: LAVCA Industry Data and proprietary data

10. Thiago Paiva
Total Investments in the Region
Latin American fintechs raised a total of US$ 2.46 B (US$ 1.726 B in equity and US$ 545.2 M
in debt) in 78 deals until now in 2019, with 19 not disclosing the amount invested. In the Q3
alone, there were US$ 1.089 B in 22 deals.
The amounts include the Softbank investment in Banco Inter (BIDI4.SA) (a listed challenger bank) of US$ 331.7 M.
Source: proprietary data from deals

11. Thiago Paiva
Number of Investments per Country
Source: proprietary data from deals
Brazil is still leading the investments
in the region with 50% of all the deals
in the region.
Mexico secured its second spot while
Colombia surpassed Argentina getting
the third place.

12. Thiago Paiva
Volume of Investments per Country
Considering the volume of investments, the
Brazilian fintechs captured an impressive
82.9% of all the disclosed investments in the
region while Mexico remains in the second
position with 12.4%. Argentina was able to spot
a distant third place.
Some mega round in Brazil by Creditas,
Nubank, Banco Inter, and QuintoAndar
weighted heavily in its favor.
Source: proprietary data

13. Thiago Paiva
Volume of Investments per Month
Although Q3 was short on number of deals compared to previous quarters (only 22 compared
to 24 in Q1 and 26 in Q2), it had 2x more volume than Q2 and almos 8x more than Q1. It also
had the two best months in the year so far, July and September.
Source: proprietary data

14. Thiago Paiva
Investment by Industry Segment
Lending is still a hot fintech segment in Latin America with 26 deals (19 consumer and 7 business)
and a total of US$ 403.8 M in equity investment. However, Digital Banking became the hottest
segment with just 7 deals but a total of US$ 748.2 M, getting 43.3% of all the volume so far. Another
trending segment is Morgage and Real State with 3 deals adding to US$ 255.7 M.
Source: proprietary data

15. Thiago Paiva
Investment by Industry Segment - 3Q2019
In the Q3, there were some major shifts in investors interest. Digital Banking, Lending, and Mortgage and Real Estate
attracted the most number of deals; however, Digital Banking had a disproportional participation in the volume,
attracting US$ 739.2 M (67.9% of the investments). Also, Mortgage and Real Estate had a favorable quarter with US$
255.7 M (23.5%) in investment. On the other side, Payment & Remittance only had 2 deals attracting less than 2% of the
volume.
Source: proprietary data

16. Thiago Paiva
Largest 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)
Source: proprietary data
US$ 400 Million
(BR - Jul 19)
US$ 331.7 Million
(BR - Jul 19)
US$ 42 Million
(MX - Aug 19)
US$ 250 Million
(BR - Sep 19)

17. Thiago Paiva
Largest Deals - Comparative Chart
Source: proprietary data
So far this year, there were 5 mega rounds (more than US$ 100 M) in the region; 4 in Brazil and 1 in
Mexico. With the exception of the Nubank one, all mega rounds had the participation of Softbank.

18. Thiago Paiva
Most Active Equity Investors (1 of 2)
5
4
4
Here are the most active equity investors (with exception of accelerators) in 2019 until now. Nine investors
had 3 or more investments in fintech; Six are regional funds and three are global funds. Interesting to note
that many of those investors are sharing deals between each other.
4

19. Thiago Paiva
Most Active Equity Investors (2 of 2)
3
3
3
3
3

20. Thiago Paiva
Debt Financing
On the debt side, Brazil and Mexico were the only countries with deals. Mexico led the debt
financing in the region with US$ 400 M, 73.4% of all debt financing. From the 6 deals, three raised
money with Goldman Sachs, Victory Park Capital and Arc Labs, and three others decided to issue in
the financial market.
Source: proprietary data

21. Thiago Paiva
Merger & Acquisitions

22. Thiago Paiva
So far this year, there were only 8 M&A deals in fintech. Most of
them had the amount undisclosed but most likely weren't great
exits.
Mexico had the most activity with 5 of the 8 deals. Brazil had 2
deals and Chile one.
As the market mature and more money is invested some larger
fintechs, we should expect to see more deals. Nubank and Creditas
both mentioned that are looking for acquisitions that could fuel
their growths.
Merger & Acquisitions
Source: LAVCA Industry Data

23. 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
Undisclosed
(BR - Sep 19)
Undisclosed
(CL - Aug 19)
Undisclosed
(MX - Aug 19)
Undisclosed
(MX - Aug 19)
Acquired by Acquired by Acquired by Acquired by

24. Thiago Paiva
FINAL THOUGHTS

25. Thiago Paiva
Final Thoughts
Fintech in the region is booming! As we can see from the numbers, the fintech market in the
region is attracting a lot of attention not only from regional investors but also from relevant
international investors.
As expected with the Softbank entrance in the Latin America market, we're starting to see some
mega round (US$ 100+ million). Another trend is the emergence of the Mortgage & Real Estate
segment as well as the growth of the Digital Banking.
Although we're still short on exits this year, we should expect to see more and more exits as the
market matures and more money is poured into it.
I'm quite excited to see what will happen in the following quarter!
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:

26. Thiago Paiva
RESOURCES

27. 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 2019
● ALLVP - Early Stage VCs Active in Latin America

28. Thiago Paiva
Other Materials by the Author
● Report: Fintech Investment Report Latin America 1H2019
● Report: Fintech Market in Singapore 2018
● Post: Taking the Pulse of Latin America Fintech Market at Iupana
● Monthly Column: Fintech Snapshot of the Latin American Market at Iupana
● Article: The Emergence of Super Apps in Latin America at Techcrunch

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

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

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

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

33. Thiago Paiva
Fintech Radar - Chile
Source: Finnovista Fintech Radar Chile 2019

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