The third edition of the program Visa Everywhere Initiative, in association with Finnovista, was launched last May. The 2019 edition is a challenge-based program looking to discover and empower growth-stage startups from Latin America and the Caribbean with the capacity to disrupt financial services and accelerate commercial engagements with Visa and its clients through Pilot programs and POCs.
All interested Fintech startups are invited to submit their projects by June 30th through the following link:
In the quest for the most innovative startups in the region, the program travelled to Mexico City, Bogota, Lima, São Paulo, Buenos Aires and Santiago to carry out Office Hours in each city, private meetings with the best Fintech startups from each country in order to evaluate their potential fit with the program and offer feedback to the different projects. During these two weeks we could identify the main Fintech trends in the region, as well as the key differences and similarities between each country, all of them opening a range of collaboration opportunities.
The program tour began in Mexico City, the largest Fintech ecosystem in the region, according to the last Fintech Radar published by Finnovista, where 394 startups were identified. During the Office Hours we observed that the majority of the startups in Mexico are already in a growth and expansion stage, reflecting the consolidation of the ecosystem in the country. The Payments segment was the most representative, with products and services that aim to digitalize transactions and reduce the use of cash in order to include more people into the formal financial ecosystem. We also came across with emerging but solid solutions that look to become the next digital bank, the Fintech segment that is undergoing the greatest annual growth in the country (200%).
During the last months we have seen important investments taking place in Mexican Fintechs, such as the US$100m raised by Clip in a round led by Softbank, or the recent US$13m investment in Conekta in a round led by Propel Ventures. These operations have strengthened the interest of international investors in Mexico’s talent and potential, reinforcing the country as the regional Fintech hub. The ecosystem’s consolidation has also been driven by a greater collaboration between startups and corporate entities, as it is estimated that seven out of 10 Fintech startups in Mexico are already collaborating with large institutions such as banks and insurance companies.
The program then travelled to Colombia, the third largest Fintech ecosystem in the region, where the majority of startups have gone beyond the initial development stages, with validated products and signs of commercial traction. However, the Colombian Fintech ecosystem still needs to gain momentum in order for startups to consolidate its growth and expansion. The lack of investment seems to be one of the main challenges in the country, as the number of local and international venture capital funds is still very low. In particular, in 2017 Colombia represented 9.2% of the venture capital investments in the region, but in 2018 this lowered down to 5.2%. On the other hand, a greater openness is needed from financial institutions towards the collaboration with startups in order to launch solutions that better suit new market needs in a shorter time to market.
Nonetheless, over the past year different success stories have showcased the country’s talent and potential, such as the Unicorn status achieved by Rappi after the US$200m last year, and the subsequent partnership announced with Davivienda to launch Rappipay, the Fintech solution that will enable clients to make payments, transactions and buy through a QR code in the app. Recently the Colombian Fintech ADDI, a startup offering banking and credit solutions in the point of sale, also raised US$12.6m in a Series A round. Hopefully these cases will boost the ecosystem and attract more investors, encourage a greater dynamism in the country’s Fintech scene.
The third meeting point took place in Lima, home town of Culqi, the winner of the past edition of Visa Everywhere Initiative, and where the Fintech ecosystem is bubbling despite being a smaller market in number of startups. Although a lot of startups are still in a Seed stage, we identified solid solutions that have already initiated and secured collaboration projects with financial entities and that have also expanded operations in other countries in the region. In this respect, the appearance of key players has been particularly important in promoting the Fintech activity in the country and bringing together corporates and startups, as is the case of Emprende UP, the entrepreneurship center that in 2018 launched the first Fintech accelerator in the country.
The program then travelled to Brazil, the second largest Fintech ecosystem after Mexico. In Sao Paulo we could observe an advanced technological level, with a variety of solutions that aim to offer cutting-edge technological services to financial institutions. Solutions of Digital Identity and Credit Scoring were notable in the country, with a high number of startups using technologies such as Open Platforms and APIs or Big Data. We also identified several solutions of digital banking, despite having a big player like Nubank, the successful Brazilian startup that is currently worth USD$4 billion. Finally, it is noteworthy how Brazilian Fintech startups seem to be less interested in expanding their operations in the ration during earlier stages, mainly due to the large market volume in their country.
The program travelled to the Southern Cone to visit Buenos Aires, where it was interesting to see a wider range of Fintech segments, with Payments as the most representative segment, but also with solutions related to Enterprise Financial Management (EFM), Digital Banking and Digital Security among others. In Argentina we could identify a strong entrepreneurial and technological human talent, with potential and solid solutions but that still need an impulse coming from investors and corporate entities to consolidate their development. Moreover, political instability and the lack of clear regulation are still some of the challenges the ecosystem has to cope with. Hopefully the recent announcement of a Fintech working group by the National Securities Commission (CNV) will shed light and boost financial innovation in the country.
The final stop of the Office Hours tour was Santiago, where we could observe similarities with Argentina: a good entrepreneurial talent, projects that are one step beyond initial stages of validation, but an absence of venture capital investment and dynamism that is necessary to take a step forward towards growth and consolidation. Santiago has a competitive landscape in the Payments segment, once again the largest in the country, and presents a lot of opportunities regarding cyber security in digital transactions. Chile needs to work on regulatory matters in order to grant more security within the Fintech ecosystem, attract investors from the private sector and foster more collaboration opportunities between startups and corporate entities.
Overall, the Fintech ecosystem in the region has clearly demonstrated a notable evolution, with the majority of startups being in growth and expansion stages and a greater willingness from corporate entities to collaborate in launching new products and services. Moreover, the region is attracting more international venture capital investors. According to LAVCA, Private Equity and Venture Capital investment rose up to 55% in 2018%, led by the 102 investments made in the Fintech sector.
We find ourselves facing the perfect setting for innovation programs like Visa Everywhere Initiative, that aim to accelerate the collaboration between Visa, its clients and startups in the development of Pilot programs and Proofs of Concept. From Finnovista, we encourage all Fintech startups to apply to this third edition of the program through this link, where they will have the opportunity to participate in a 5-week immersion program (online and on-site in Miami) and showcase their solutions in the final, which will take place during FINNOSUMMIT Miami, the leading Fintech event in the region.