The Latin American fintech ecosystem is experiencing a seismic shift.

For many years, a few massive financial institutions dominated the financial market in the region. But recently a surge of digital-first financial startups have challenged the status quo. And it’s working.

These fintech startups are bringing financial products to millions of underserved users… and attracting billions in investment.

How big is the boom? Well… in 2017, there were 703 fintech startups across 18 countries in Latin America. In 2024, there were 3,000 spanning 26 countries. That's 340% growth in just six years.

All this growth is serving to diversify the ecosystem, making it possible for more founders to launch more innovative companies to serve more customers.

So, what's fueling the fintech fire?

Great question. Let's break it down:

1. Underserved population: Many of Latin America's 650 million residents are underbanked or unbanked. Fintech startups are tapping into this vast, untapped market that’s hungry for financial services.
2. Digital adoption: COVID was a major catalyst for digital adoption. In just five months in 2020, over 40 million people in the region joined the banking ecosystem. So I guess 2020 was not a total dumpster fire.
3. Regulatory wins: Governments are embracing fintech innovation. Mexico's "Ley Fintech" and Brazil's Open Banking project fostered competition and drove progress.
4. VC interest: While global fintech funding has taken a hit, Latin America remains resilient. In the first half of 2024, the region attracted $1.2 billion in investments – a 20% increase from 2023.
5. Incumbents are lacking: Traditional banks have dominated the markets for decades. They liked their high margins and limited competition, and were slow to innovate. In Brazil, nearly 70% of deposits are held by the top three banks. The industry was begging to be disrupted.

Insights from Tony on the fintech frontlines

Now, let's talk about Tony.

Tony is a fintech mastermind. His background is rooted in Latin America, both as a citizen born and raised in Peru, and as an entrepreneur at ReBill ( basically the Stripe of LatAm). He’s got deep ties to the startup community in LatAm.

Tony spent months digging into the startup market, analyzing over 200 well-funded startups in Latin America. Each of these startups has raised at least $3m.

(Highly recommend checking out Tony’s market map, which shows the players in verticals like lending, payments, neobanks, infrastructure, and insurance tech.)

The result from this market map? A treasure trove of insights that show where the fintech revolution is headed.

Here are five major trends that Tony uncovered:

1. Lending can power financial inclusion: Changing traditional lending models allows fintechs to serve historically ignored populations. The result is more economic growth, more entrepreneurship, and a reshaping of LatAm’s economic landscape. No biggie.
2. Payment infrastructure has arrived: The focus is shifting from consumer-facing apps to robust payment infrastructure, enabling seamless transactions across the entire economy.
3. Neobanks are expanding: Digital-first banks are expanding their offerings, becoming one-stop shops for a wide range of financial services.
4. Infrastructure is an enabler: New fintech infrastructure players are laying the groundwork for the next generation of financial products.
5. Insurtech reimagines protection: Technology is transforming the insurance industry, making policies more accessible, personalized, and responsive to consumer needs.

What’s beyond the fintech frontier?

The Latin American fintech scene isn't just growing – it's exploding.

By 2024, 57% of fintech companies in the region are targeting underbanked or unbanked populations. That's up from 36% in 2021.

This laser focus on financial inclusion is a catalyst for widespread economic empowerment. It’s revolutionary. As these fintech solutions go deeper in these underserved markets, they're not just reshaping the financial landscape. They're rewriting the economic narrative of an entire continent.

Want to dive deeper into this fintech revolution?

Check out Tony's analysis, complete with a comprehensive market map, on LinkedIn. It's a must-read for anyone looking to understand the opportunities emerging in Latin America fintech.

Or join us at Camp Hustle for an in-person session with Tony on fintech startups in emerging markets. It's going to be amazing.