Home Entrepreneur How have fintechs performed during the pandemic?

How have fintechs performed during the pandemic?

April 14, 2021

5 minutes of reading

This article is translated from us Spanish edition using AI technology. Errors can persist due to this process.

Comments expressed by Businessmen the contributors are their own.

In an unusual pandemic scenario, Fintech companies Their ecosystems have merged despite the current economic environment, having succeeded thanks to the diversity of their products, services, and the nature of their technology.

Many of these fintech companies have adapted to the needs of new consumers, offering them from payment channels, remote and immediate services, financial alternatives and even collective sponsorship .

The importance of fintech companies is that the annual value of fintech operations in Mexico is more than $ 3 billion, with 4.7 million users and 48% growth in ecosystems, according to the report. Fintech thermometer 2019 prepared by Banco Santander, Finnovista and Google.

Fintechs that survive are fintechs that have managed and managed to adapt to the new changes, fintechs that have financial discipline and adjust their finances to new realities, as well as fintechs that have enough funding. to survive a pandemic. However, viral formation conditions have prompted important processes for integrating several fintech domains.

Besides, digitizing sectors such as small business continue to be an area of ​​opportunity for fintech companies, by integrating financial inclusion schemes through electronic terminals, software and applications to facilitate transactions; Fintech firms have become an alternative to leverage and finance for these economic entities.

The pandemic has not stopped investments

Photo: Depositphotos.com

According to data from Finnovista, the pandemic is not a cornerstone for fintech firms, as there is more capital available to them, as 60% of Mexican fintech firms have received some form of funding. , according to data from Finnovista, a percentage confirmed by the nation’s funds risky investment (U).

This is added that after two years Fintech’s law is announced, Mexico has a favorable ecosystem for technology and finance projects, making it one of the Latin American countries with the highest levels of investment for fintech companies.

Here’s how, for example, last year, with the pandemic happening, Fintech Creze Mexico has increased an investment round of 265 million pesos to modernize the bank SMEs .

Other examples of the development scene in Mexico for this sector are: Story , the digital financial services firm, recently raised funds in Series B for $ 32.5 million led by Lightspeed Venture Partners, based in Silicon Valley , with participation from existing investors Vision Plus Capital, BAI Capital and Source Code Capital.

Likewise, digital banking Or raised $ 45 million last December in an operation raised by investment groups Valar Ventures, Greyhound Capital, Mountain Nazca and Flourish Ventures.

Goldman Sachs will also provide $ 160 million in support for fintech Konfío This will allow it to increase the number of loans it grants to SMEs.

Similarly, the Mexican mobile payments company Cuenca The end of the $ 50 million funding round is expected to allow it to accelerate its expansion plans by Q2 2021.

Earrings for fintech companies

Photo: Depositphotos.com

Although this year there will be many challenges for the sector, a consolidation is also expected, as services are included and synergies have been promoted between banks and fintech firms. . Data from Finnovista and IDB reveal that 29% of fintech companies seek to meet the needs of corporations and banks, which is the second customer segment in terms of relevance for tech companies.

Adding to these cooperation expectations were the suspended resolutions of the National Banking and Securities Commission (CNBV), as the legal situation of various financial technology companies that required authorization to operate was Not resolved for a year.

Also, the technical aspects like network security must be addressed in the face of the proliferation of threats from information theft, hacking or fraud, which also increase with the pandemic.

Mexico has a fintech sector that will be consolidated thanks to the positive impact their companies create on the inclusion of finance in segments such as loans, payments and remittances, and business financial management. But most of all, it is because fintech companies are promoting new business models with technologies and solutions. Innovative for increasingly digital consumers.



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