Fintech startups in Latin America (LatAm) raised a total of US$254 million in funding in Q2 2023, bouncing back 69% from Q1’s US$137 million, data from Fintech Global, a provider of fintech information services, show. Despite the quarter-on-quarter (QoQ) rebound, the numbers are substantially lower than those observed last year, representing a year-over-year (YoY) drop of 96% for Q1 and 68% for Q2.
Looking at 2022 and H1 2023 figures, Fintech Global projects that LatAm fintech funding could reach US$548 million this year, down 89% from 2022.
But despite the downturn, some startups managed, nevertheless, to attract investors’ interest and secure sizeable rounds of financing this year. Today, we look at the 8 largest fintech deals of H1 2023 in LatAm and delve into these startups’ future plans and ambitions.
Clara – US$60 million (Mexico)
Clara, a credit card, payment solution, and expense tracking platform, secured the biggest fintech deal in LatAm in H1 2023 by raising US$60 million in an extension of its Series B. The investment, contributed by 15 investors, is aimed at growing Clara’s engineering and product teams, bolstering technology development, rounding out its leadership team, as well as improving liquidity for customers through recent debt lines, TechCrunch reported in April.
Clara launched its product in 2021, providing reporting software for better financial decision-making, locally issued corporate cards, bill pay and financing solutions. In addition, the company partners with financial institutions to provide additional lending capabilities.
Clara says it’s currently working with 10,000 companies across Latin America, with a strong presence in Brazil, Mexico and Colombia. According to co-founder and CEO Gerry Giacoman Colyer, Clara currently handles an annual run rate of 5 million credit card transactions equivalent to US$1 billion.
ICred – US$58 million (Brazil)
ICred, a payroll loan provider, secured the second largest deal in H1 2023, raising US$58 million venture funding round in February. The funding will enable ICred to expand its operations and offer payroll loans to beneficiaries of Brazil’s National Social Security Institute (INSS) at competitive rates starting at 1.49% per month.
Throughout 2022, the company made significant progress, having processed over US$50 million in loans and pre-approved more than one million loan applications. That year, the startup also secured of US$20 million via a Receivables Investment Fund (FIDC), a type of investment where shareholders’ earnings are tied to the company’s resources derived from a particular source.
Klym – US$27 million ( Colombia)
Klym, a Colombian small and medium-sized enterprise (SME) financing startup, secured a US$27 million Series B funding round in January, the third largest fintech rounds in the region in H1 2023.
The company plans to use the funds to expand, with Brazil as the main priority in 2023. It also wants to expand in Colombia and Chile, and is working with regulators to start a business in Mexico.
Founded in 2017, Klym is a data-driven fintech that focuses on providing working capital to small and midsize companies in LatAm. The startup offers online factoring, confirming and working capital programs and has the ability to fund suppliers in 32 jurisdictions and 25 different currencies.
Klym has raised US$95 million since its founding in 2017.
VIPe – US$23 million (Brazil)
VIPe, a company that offers consigned credit, raised a US$22.9 million round of funding in June.
The company, which has already secured 100 million reais (US$21 million) in consigned credit for around 140,000 customers in Brazil, began operating in 2021 by offering consigned credit to the private sector. The startup also develops salary advance and consortium solutions and aims to enter the insurance products market, Bloomberg reported in June.
Cilia – US$22 million (Brazil)
Cilia, a Brazilian startup focusing on simplifying the work of car workshops, part suppliers, regulators, and insurers, secured a US$21.8 million venture round in May. The startup plans to use the funds for market development and expand its portfolio of solutions for the automotive industry.
Founded in 2012, Cilia uses artificial intelligence (AI) to allow companies to perform claim evaluations, budget coordination, online quotation, customer and yard management and statistical reports in minutes.
Asaas – US$21 million (Brazil)
Asaas, a Brazilian startup providing financial services to SMEs, secured in June an additional US$21 million in funding during an extension of its prior Series B round. The company plans to use the proceeds to strengthen its balance sheet and help maintain its growth pace in compliance with Brazil’s central bank.
Asaas offers payment management and enterprise resource planning (ERP) services for SMEs. Initially, the company focused on automating bill collection for companies but has since expanded its offering to include digital accounts, prepaid cards, receivables anticipation, ERP, and customer relationship software.
Asaas expects to close the year with a revenue of US$48 million and 200,000 companies as clients. The startup claims 300 companies now use its banking-as-a-service (BaaS) product.
Kapital – US$20 million (Mexico)
Kapital, a Mexican fintech company focused on SME financing, raised US$20 million in a Series A funding round and US$45 million in a debt facility in May. The company plans to use the funding to speed up the development and implementation of advanced tech tools like an AI engine, and boost its growth in LatAm, especially in Colombia, TechCrunch reported.
Founded in 2020, Kapital aims to become the go-to digital bank for SMEs in LatAm. Through Kapital, businesses can obtain a credit card, manage payments, observe cash flow, and control spending.
Currently, Kapital is serving over 11,000 businesses and has recently automated its platform, allowing, for instance, automatic invoice generation when a customer executes a contract.
The startup has raised over US$30 million in equity and US$145 million in debt since its inception.
Kanastra – US$13 million (Brazil)
Kanastra, a Brazilian capital markets infrastructure provider, raised US$13 million in seed funding in June. The company plans to use the funding to expand operations and boost development efforts.
Founded in 2022, Kanastra has developed a technology-driven solution aimed at simplifying debt facilities for both originators and investors. The platform handles everything from fund administration to debt issuance, automating processes and eliminating the need for spreadsheets, documents, and outdated systems. This end-to-end solution is aimed at facilitating lending by providing automation, data availability, modern integrations, and various empowering features.
Featured image credit: Edited from Latin America (orthographic projection) – Latin America – Wikipedia