Five LatAm Fintechs Disrupting the Banking Industry

Latin America is in the middle of a fintech revolution. Startups from all around the region are aiming to solve financial woes largely caused by systems stuck in the past while giving traditional institutions a run for their money. Entrepreneurs are betting big on solving issues ranging from consumer lending, wealth management, insurance, payment gateways, and digital banking.

The amount of fintech startups in the region has seen a steady increase year on year for the past five years. In 2015, Latin America had around 387 fintech startups. Five years later, there are currently around 1,300. Many problems to solve equals many opportunities, but a big reason for fintech-mania is the fact that Latin America hosts some of the fastest growing countries regarding internet penetration and mobile adoption. LatAm has over 66% penetration, surpassing the world average of 53%. Wide access to digital resources is the perfect foundation for fintechs aiming to disrupt systems and reach millions who had previously been neglected.

Another reason for the large amount of fintechs is the fact that 40% of Latin America’s population still remains unbanked. There is a massive unserved market that has been relegated and denied banking for years. Additionally, those who are part of the banking system are often dissatisfied with the services they are receiving. Banked and unbanked civilians are constantly looking for smarter and better ways to track, spend, store, and increase their finances.

The Org has highlighted some of the most innovative and disruptive fintechs in Latin America that are challenging conventional banking and truly aiming to increase the financial inclusion rate in the region. These startups are providing opportunities for progress to a huge population that was previously unbanked.

Nubank

The Brazilian startup is developing “simple, secure, and 100% digital solutions so people can have control over their money, literally in the palm of their hands.” Since the beginning, Nubank aimed to show that it was possible to do things differently. They treat everyone as highly valued customers while offering a service that is fair, simple, and transparent. In essence, their goal is take everything that makes sense about banking, like having a safe place to store money, make payments, and access to a credit card, while removing everything that doesn’t, like obnoxious transfer fees, bureaucratic processes, and high interest rates.

Nubank is well established in Brazil and recently opened operations in Mexico and Colombia. The fintech giant has raised upwards of $1.1B and is valued at $10B. Brazil is the only LatAm country with four fintech unicorns -- besides Nubank, PagSeguro, Stone, and EBANX are also part of the unicorn club.

Uala

The Argentinian fintech, launched in 2017 by Pierpaolo Barbieri, was created with the aim of improving financial inclusion in Argentina. Summed up, Uala is a virtual banking app that offers a prepaid MasterCard to help users access multiple services such as online payments, investments and credit. As Pierpaolo mentions, they work every day at Uala so, “You can manage all of your finances from an app that is easy, free and safe.”

He also highlights that the company strives to, “Change paradigms without any hidden fees or costs, long lines or physical branches.” They are revolutionizing the traditional financial systems and giving people freedom of choice.

Uala has issued more than two million cards and raised $194M.

Konfio

Mexico-based Konfio is an online lending platform that uses proprietary rapid credit assessment algorithms and data analytics to issue working capital loans serving Mexico’s small and medium sized enterprises. One of the company’s tag lines is, “Where everyone sees uncertainty, we see opportunity.”

Konfio has implemented 100% digital processes for card and credit approvals. They have migrated slow bureaucratic banking into efficient digital procedures that business owners can confidently rely on. They also have a loyalty program and business productivity software tools their clients can take advantage of. In 2019, after five years of operations, they had already served one million clients.

Konfio has raised over $450M. Their most recent investment was made by Japan’s SoftBank, no stranger to investing large amounts of capital into Latin American startups.

Greensill Latam (Formerly OmniLatam)

In 2018, entrepreneurs Diego Caicedo and Andres Abuhomor launched the fintech startup Omni in Colombia with the purpose of supporting thousands of underserved companies in the region. Via financial solutions like ‘factoring,’instant access to capital, and ‘confirming,’ invoice payment management in a simplified way, Omni was quickly able to lure small and large businesses to use their platform. Over three years they financed over $300M to more than 5,000 companies in Colombia and Chile.

Thanks to Omni’s advanced technology and digital processes, they have been able to repeatedly grant $1M loans in under 30 minutes. Advancements like this attracted international attention and among the interested parties was Greensill, the world’s leading provider of working capital solutions. In June 2020, Greensill acquired Omni. Together they aim to unblock capital in the region so companies can get to work and create work. Greensill has granted over $143B in loans to more than 8 million companies in over 175 countries.

Afluenta

Afluenta is the first collaborative marketplace finance network that manages loans between people who want to put their money to work and those trying to access more humane loans. In the Afluenta network, borrowers can access loans at more convenient rates than traditional channels, while investors can enjoy higher returns for the invested funds. In this way, everyone favors each other. The average loan Afluenta grants is around $2,500 and is financed by 250 investors. The interest fee attached to the loan depends on the level of risk of investment, but it is still lower than accessing loans through traditional bank channels.

The company was founded in Argentina over 8 years ago and now operates in Brazil, Chile, Colombia, Mexico, Peru, and Uruguay. They have received over $25.5M in funding.

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