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Investors show LatAm fintechs the money – TechCrunch


Welcome to The Interchange, up to date with this week’s fintech news and trends. To receive this information in your inbox, Sign up here.

Greetings from Austin, Texas, where it’s been over 100 degrees for days and we’re doing our best not to melt.

The global funding boom in 2021 is unlike anything most of us have seen before. While countries worldwide saw an increase in venture capital investment, Latin America in particular saw a large increase in the amount of investment dollars. Unsurprisingly – with so many in the region being either underbanked or unbanked and digital penetration finally succeeding – fintech startups are among the recipients. the largest amount of capital.

The trend continued in the first quarter of 2022, according to LAVCAThe Private Equity Investment Association in Latin America, shows that startups in the region raised $2.8 billion overall across 190 deals in the 3-month period ended 31st. March. It was the fourth-biggest quarter on record for investment in the region, the data showed, and up 67% from the $1.7 billion raised in the first quarter of 2021. The numbers This is also a 375% increase from the $582 million raised in the first quarter of 2020.

Notably, fintech startups have hitherto were the largest recipients of venture capital in the first quarter of 2022, with 43% of funds raised — or $1.2 billion — flowing into this category. This is up from 16% in the first quarter of 2021. Meanwhile, investments in fintechs accounted for 30% of all transactions in the second quarter, compared with 25% in the first quarter of 2021.

Image credits: LAVCA

Carlos Ramos de la Vega, venture capital officer at LAVCA, told TechCrunch: “We have continued to see a cross-classification of business models in the industry: Increasingly integrated payment platforms Incorporating multiple BNPL alternatives, lending platforms have become full-service digital banks, challenger banks have expanded their product suite to include embedded credit products and working capital base. “

Now, with the ongoing global business downturn, it’s worth noting that Latin American fintechs continued to raise large capital in the second quarter of this year. For example, last week, Ecuador got its first unicorn when it launched its payments infrastructure Kushki raised 100 million dollars with a valuation of $1.5 billion. And, Mexico City-based digital bank Klar received $70 million in equity funding in a round led by General Atlantic, valuing that company at around $500 million. I first wrote about Klar in September 2019, when it aspired to be “The Bell of Mexico”. You can read about how its model has evolved here.

Does all of this mean that LatAm is an exception? Unnecessary. But it shows that the appetite among investors in the region remains.

Weekly News

Now, we all know insurtechs beat the public market. And last week, I mentioned a significant wave of layoffs in this area. So it’s interesting that a startup in this space not only continues to raise capital and increase its value, but also also is said to be actively working towards positive cash flow.

I wrote about Branch, a Columbus, Ohio-based startup that offers auto and home insurance, which raised $147 million in Series C capital at a post-money valuation of $1, 05 billion dollars. I first heard/wrote about Branch in the summer of 2020, and I was amazed to see the company steadily grow its business.

With the latest news, I wanted to dive into what sets Branch apart from other struggling insurers out there. CEO and co-founder Steve Lekas ​​told me in an interview, “We’re at a scale now where we’re selling more products than most of the ones before us. I think what we’ve created is what people thought they were investing in in the beginning. To learn more, read My story on the topic from 8/6.

TC’s Kyle Wiggers and Devin Coldewey Dig Into Apple’s Biggest Move into financial services to date – become a formidable player in the increasingly crowded buy now, pay later (BNPL) space. this paragraph Includes news to start. This article looked at how Apple is doing loan by itself. And this section goes deeper into how other BNPL providers reacting to the news. And ICYMI, a week ago Square announced that it will start to support Apple’s Tap to Pay technology later this year. It’s a partnership that the founder of MagicCube, Sam Shawki predict despite the buzz that Apple would kill Square. In his view, that partnership only further increases demand to provide an equivalent payment acceptance solution for Android.

Also, last week, two major players announced major crypto-related moves. I looked at how PayPal users could (eventually) transfer funds electronically from their accounts to other wallets and exchanges. “This move shows that we are in this for the long term,” one executive told me in an interview. And Anita Ramaswamy — whose presence at Consensus in hell is now Austin, Texas — reported on American Express’s new partnership with crypto asset management platform and wallet provider Abra. The card will allow users to transact in US dollars to earn crypto rewards when making their purchases through the Amex network. Amex users have been waiting for an announcement like this for some time, as its competitors Visa and Mastercard have launched their own crypto rewards credit cards through partnerships with companies. digital asset company.

It feels like no more than a few weeks could go by without Better.com appearing in the headlines again. This time, the digital mortgage lender is sued by a former executive, who alleges that she was pushed out for various reasons, one of which included expressing concern that the company and its CEO Vishal Garg misled investors invest when trying to list shares through SPAC.

Other interesting readings:

Banks and tech giants are losing skilled staff to agile fintechs

Bolt, facing challenges, cutting costs and lowering growth targets

Out of money 20/20 Europe

‘Very bad mood’: Once-hot fintech sector faces IPO delays and consolidation

Stripe co-founder hits back at competitors who accuse company of unfair competition

Insurtech outlier Branch closes at $147 million at $1.05 billion valuation

Image credits: Affiliate / CEO Steve Lekas

Expense

Seen on TechCrunch

With millions of backers, SecureSave is Suze Orman’s unsurprising debut in startups.

Achievement emerges from stealth with $33 million in funding and an app that aims to promote healthy financial habits

Ivella is the latest fintech focused on couple banking, with a twist

Backbase raises first funding, $128 million at $2.6 billion valuation, for tools to help banks interact

And other places

PayShepherd earns $3 million in funding to refresh contractor payments system

That’s it for this week! Now please allow me to go to the pool with my family to try and cool off. Enjoy the rest of the weekend and thank you for reading. To borrow from my dear colleague and friend Natasha Mascarenhas, you can support me by forwarding this newsletter to a friend or follow me on twitter.





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