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Top 5 FinTech funding rounds in LATAM: September 2020

By Pavithra R

September 29, 2020

  • Dlocal
  • Latin America
  • Neon
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Latin America’s FinTech industry is dynamic and growing fast. A considerable percentage of its population is still underbanked. In a region where micro, small, and medium enterprises make up a major portion of the private sector, financial inclusion for individuals and small businesses continues to be a critical challenge for economic development. A massive FinTech boom is taking hold in the region with new and innovative startups look to leverage widespread technology penetration to serve the region’s massive unbanked and underbanked populations and small- and medium-sized businesses (SMBs).

According to Latam FinTech Hub, the LATAM FinTech market has raised a total of US$ 525M (US$ 249,3M in equity and US$ 275,7M in debt) in 74 deals in 2020 H1. FinTech’s funding in Latin America is highly concentrated in Brazil, Mexico, and Colombia accounting for over 98% by 2020 H1. Below is a list of 5 funding announcements that were made this month.

Neon 

Neon Pagamentos, with the mission to unite technology and design to redesign and simplify people’s financial experience, has raised a Series C investment of $300 mn led by General Atlantic, a leading global growth equity firm. The round saw participation from new investors, including funds and accounts managed by BlackRock and Vulcan Capital, PayPal Ventures, and Endeavor Catalyst, along with former investors Monashees and Flourish Ventures.

Neon was born with a clear purpose: to provide an accessible bank account to any Brazilian, placing user experience at the center of everything. The increased demand for digital-based services amid the pandemic has accelerated Neon’s growth trajectory. The firm to meet the increasing customer demand has provided an alternative to in-person banking solutions and has seen a surge in investments, deposits, and online purchases and an uptick of 26% in new users since March. 

The FinTech is planning to use the funding to support its hiring efforts, grow user base across consumer and business clients, invest in product development and enhance the platform’s technology capabilities. It will also be used to enhance the company’s credit offerings, vital to driving additional business monetization. Proceeds will also enable Neon to pursue strategic M&A opportunities that can further enrich its offering.

dLocal 

Uruguay based FinTech company dLocal, providing cross-border payments platform connecting global merchants with emerging markets, has secured a new investment of $ 200 mn. The new investment raised dLocal to a $ 1.2 bn valued company making it not only Uruguay’s first unicorn but also a high-valued LATAM FinTech company supporting global merchants’ growth in emerging markets.

Like Neon, the major investor in dLocal was also General Atlantic, with added investment from Addition, a recently launched investment company targeting early or growth-stage companies. The FinTech is planning to use the funding to enhance global expansion, targeting 13 new markets over the next 18 months, including Central America, Africa, and Southeast Asia countries. dLocal is also aiming to bolster its products to solve critical pain points for global merchants seeking to serve emerging market consumers.

The company is seeing tremendous momentum, and successful new business wins in additional high-growth markets, including India, Morocco, Nigeria, and South Africa. Its global customers include DiDi, Gearbest, Nike, Shopify, Spotify, Amazon, Uber, Visa/Earthport, Zara, and many others. It serves 450 merchants including Uber, Sony, GoDaddy, Constant Contact, and Avast in 20 countries, to accept 300+ locally-relevant payment methods online, as well as issue mass payouts to their contractors, agents, and sellers in emerging markets globally.

Marco Financial 

Founded in 2019 by Peter D. Spradling and Jacob Shoihet, Miami based Marco Financial, a venture-backed, tech-enabled trade finance platform providing working capital to Latin American SMEs has raised $26 mn in funding and credit aiming to bridge the $1.5T global trade finance gap that disproportionately impacts small-and medium-sized (SME) businesses.

The investment includes an equity round, led by Antler and Struck Capital, and a credit facility underwritten by Arcadia Funds, LLC. Marco provides fast and easy financing to LATAM SME exporters selling to U.S. buyers with a due diligence process that leverages real-time data to dynamically assess risk and mitigate capital loss. Its platform shortens the loan origination timeline from 2+ months to 1-2 weeks and provides funding to approved exporters within 24 hours. Marco financial streamlines the loan origination process and provides SMEs with operational capital at highly competitive rates.

Ideal 

Independent and highly automated broker-dealer Ideal has secured R$ 100 million in Series A funding led by Kaszek Ventures. Investors involved in the round will also hold minority shareholder interest in the broker, and the deal awaits Brazilian Central Bank approval.  

Founded in 2019, Ideal aims to provide innovative services in the financial intermediation market. The firm sets itself apart from the institutional market due to its fully digital process, with no human intervention. The new capital injection will allow the company to broaden and diversify its customer base and its activities in different segments and products.

Zoop 

Zoop, a White Label technology company offering payment and financial services has raised R$60 mn through a new investment led by Movile, one of Latin America’s leading investors and growth accelerators for technology companies. The move marks Movile’s third investment in the company since early 2018.

Founded in 2013, Zoop operates in mobile payments, banking as a service (BaaS) and credit. Its platform and products combine technology and regulatory compliance, allowing any company irrespective of size to create and offer its own financial services (white label) in a simple, efficient and secure way. The firm will use the new investment to accelerate the growth of its FinTech vertical by speeding the rollout of new banking, digital payments, and credit for its customers within Zoop’s secure and certified framework.

Zoop has shown a growth of 140% in TPV (total payment volume) compared to the previous year and has attracted more than 40 new partners during the pandemic. The company recently launched several innovative products, such as the Banking as a Service (or BaaS) vertical, which completes a broader portfolio of products and services for payments and credit.

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