RIO DE JANEIRO, BRAZIL – Fintechs, or startups focused on financial services, are currently the star of investors in Brazil and worldwide. In February 2017, according to the Radar FintechLab hub, there were 244 such companies in Brazil. According to a survey by Fincatch, a fintechs evaluation platform, there are now 1,466. The data comes from W Fintechs, a Brazilian newsletter specialized in the subject.
These companies are growing mainly because paper money is heading toward its end. Strategy& of the PwC consultancy points out that the volume of cashless transactions will increase by 52% by 2025 and 48% by 2030 in Latin America. In other parts of the world, this trend will grow even faster.
The Asia-Pacific region is expected to lead the growth, with 109% by 2025 and 76% by 2030. Much of the “blame” will lie with China, one of the pioneers in this regard. Next comes Africa with 78% and 64%, respectively, and Europe with 64% and 39%. Only the USA and Canada will have slower growth than Latin America: 43% and 35%.
The use of mobile payments will grow steadily (estimated 23% by 2024). The proliferation of super-apps, open banking services, and QR codes will drive digital wallet adoption.
In Brazil, financial startups received the most venture capital funding in 2021, according to a survey by consultancy KPMG in partnership with Distrito.
Among the consolidated ones, none beats the power of Nubank. The company priced its shares at US$ 9 shortly before its initial public offering (IPO) on the New York Stock Exchange in early December. The company thus became the most valuable listed bank in Latin America, with a market value of US$41.5 billion, ahead of Itaú Unibanco.
Other fintechs such as Brex, Stone, Ebanx, C6 Bank, and Mercado Bitcoin have become unicorns (worth over US$1 billion) in recent years.