In The News
CB Insights recently released its Q2 State of Fintech report, revealing that global funding in the fintech space dropped by nearly half to $7.8 billion, the lowest level since 2017. However, Latin America stood out as the exception, experiencing a surge in global investor interest in recent years.
Latin America has been attracting significant attention from investors due to its growing fintech ecosystem. The region has seen a rise in the number of fintech startups and a favorable regulatory environment, making it an attractive destination for investment.
According to the report, Latin America saw a record-breaking quarter in Q2 2020, with $698 million invested across 50 deals. This represents a 66% increase in funding compared to the same period last year. The region’s fintech sector has been resilient despite the challenges posed by the COVID-19 pandemic.
Brazil, Mexico, and Colombia emerged as the top three countries in Latin America for fintech investment. Brazil accounted for the majority of funding, with $481 million invested in Q2 2020. Mexico followed with $143 million, and Colombia received $73 million in funding.
The report also highlighted the sectors within fintech that attracted the most investment in Latin America. Payments and remittances led the way, accounting for 40% of the total funding. This was followed by lending and financing, which received 25% of the investment. Other sectors that attracted significant funding included wealth management, insurtech, and digital banking.
The growth of fintech in Latin America can be attributed to several factors. Firstly, the region has a large unbanked population, creating a significant market opportunity for fintech companies. Additionally, the rise of smartphone penetration and digital adoption has made it easier for fintech startups to reach and serve customers.
Furthermore, governments in Latin America have been supportive of fintech innovation. Regulatory frameworks have been established to encourage the growth of the sector, and initiatives such as open banking have been introduced to promote competition and innovation.
Top things to Know
– Global funding in the fintech space dropped by nearly half to $7.8 billion in Q2 2020, the lowest level since 2017.
– Latin America experienced a surge in global investor interest, with $698 million invested across 50 deals in Q2 2020.
– Brazil, Mexico, and Colombia were the top three countries in Latin America for fintech investment.
– Payments and remittances accounted for 40% of the total funding in Latin America, followed by lending and financing with 25%.
– The growth of fintech in Latin America can be attributed to factors such as a large unbanked population, smartphone penetration, and supportive government initiatives.
Original article: https://techcrunch.com/2023/07/21/q2-fintech-funding-latam-caribbean-more-than-doubles-while-payments-takes-a-big-hit/