Latin America fintech funding rockets to US$7.6bn

Fintech funding activity in Latin America accelerated apace last quarter, shattering records.

Ninety-two fintech funding deals were reported in 2Q21, involving US$6.31bn in investment, up from 90 and US$1.29bn the previous quarter, respectively.

Over the first half of the year, the region registered 182 deals and US$7.6bn, up from 199 and US$2.99bn in the same period of 2020, according to a report from regional fintech industry forum Latam Fintech Hub.

Equity financing dominated. Of the 182 deals, equity accounted for 157, debt for 23. Out of the 182 rounds, 32 were undisclosed.

June accounted for the bulk of financing volume, driven by Nubank’s series G investment round (US$750mn) and the investment of JP Morgan Chase in C6 Bank (US$2.02bn) – both Brazilian neobanks.

Neobanks accounted for 48.8% of financing volume, followed by digital credit players (20.0%) and payment platforms (19.6%).

The region’s large population of smartphone-wielding unbanked and underbanked citizens is blinking brightly on the radars of fintechs and investors.

The pandemic and associated sanitary restrictions have boosted adoption of digital solutions and nudged once tech-wary citizens into the online world. 

Over the first half, Brazil, Mexico and Colombia saw the biggest investments, of nearly US$5.96bn, US$1.07bn and US$170mn, respectively. 

Just over 70% of the deals registered in Latin America had a financing ticket of less than US$25mn.