Fintech has emerged into the dominant segment in the Colombian startup ecosystem, making up more than 15% of all startups in the country, a new report by StartupBlink, KPMG Colombia and other industry stakeholders, show.

The Colombia Tech Report 2022-2023, released on September 28, explores the country’s booming tech sector, ­­startup funding activity and emerging trends. In particular, the report highlights the rise to prominence of fintech in the Colombian startup ecosystem. The sector is now the biggest startup category in the Latin American country, recording 203 startups in early 2023.

Not only is fintech the most prevalent startup category, fintech is also the most represented segment among Colombia’s top ten startups. Using StartupBlink’s algorithm, which considers factors like company funding, employee count and web traffic, the study identified the ten largest and fastest-growing startups in the market.

Of the ten companies selected, three are fintech pure-players, while one, namely Rappi, is a super-app operator that provides an array of services including logistics, e-commerce as well as financial services.

Addi is fintech and digital commerce startup that specializes in buy now pay later (BNPL) arrangements. The startup operates in Brazil and Colombia. Founded in 2018, Addi claimed more than 500,000 customers and 1,000 retailers using its payment processing system at the end of 2021.

Bold is independent merchant-acquirer in Colombia. The startup serves small and medium-sized enterprises (SMEs), allowing merchants to enroll in just five minutes and providing low-cost payment terminals that enable businesses to accept link payments and other local payment methods, with no monthly point-of-sale fees. Founded in 2019, Bold claimed over 100,000 acquired merchants in early 2022.

Treinta is a fintech startup that helps micro and small businesses in Latin America (LatAm) be more efficient and increase their sales through digitalization. The startup provides a mobile app that replaces the physical transaction book of LatAm businesses. Founded in 2020, Treinta surpassed more than 5 million users in 18 LatAm countries in June 2023.

Rappi is Colombia’s super-app and the country’s biggest tech startup. The company, which operates across LatAm, provides a mobile app that offers restaurant and grocery delivery, retail products, digital payments, insurance, and more. Founded in 2015, Rappi has close to 1.3 million users in Colombia who place at least one order a month, according to data provided to Bloomberg Linea. RappiPay, the startup’s joint venture with traditional lender Banco Davivienda, received approval from Colombia’s financial watchdog in 2022 to operate as a digital bank.

Home to ­more than 1,300 tech startups, Colombia has emerged into one of LatAm’s largest startup ecosystems. StartupBlink ranks Colombia’s capital city of Bogota as the region’s third most developed startup hub. Colombia’s fintech sector is also standing out in LatAm, representing the region’s third largest fintech ecosystems after regional leaders Brazil and Mexico.

76% of Colombians use fintech services, according to an EY study, the highest fintech adoption rate in LatAm, and from 2008 to 2022, the percentage of Colombian adults who hold a banking product rose from 55% to over 92%, data from the government show.

The growth of fintech in Colombia has been driven by booming adoption of digital financial services by unbanked and underbanked populations, soaring investment activity and supportive initiatives from the government to encourage the growth of the sector.

Last year, Colombia’s financial industry regulator approved a decree to enable open banking, specifying rules for the transfer of consumer data between financial entities.

The new regulation allows the commercialization of clients’ personal data if they provide consent, enables financial entities to offer third-party products or services for sale via electronic channels, and allows them to market the technology and infrastructure to provide their services to third parties.

Following Mexico and Brazil, Colombia is the third country in LatAm to implement open banking regulation.

Colombia is also looking to launch a real-time payment system in the next two years. Colombia’s central bank governor Leonardo Villar said in August that he hopes for the system to go live before the end of 2024.

Featured image credit: edited from Unsplash