Latin America’s fintech sector is poised to become a market to watch in 2025, with a resurgence of venture capital investment and a growing ecosystem of innovative startups.
According to data from PitchBook, the volume of venture capital invested in LatAm fintech companies has already surpassed 2023 levels, with $2.6 billion invested across 174 deals so far in 2024. This represents a 73% increase in funding volume compared to the $1.5 billion invested in 241 deals in 2023.
While these numbers still pale in comparison to the industry’s peak in 2021 ($7.5 billion) and 2022 ($4.3 billion), they signal a turning point for the region’s fintech landscape.
“At a conference in May, I was speaking to some of our seed founders and said, ‘I’m going to call this as the bottom of LatAm equity funding,'” said Mike Packer, a partner at fintech-focused QED Investors. “I knew a bunch of deals in the pipeline, it seems like we are off the bottom.”
The resurgence in deals can be attributed to two key factors. Firstly, LatAm fintech startups that raised funding during the industry’s hype in 2021 are now resurfacing to raise their next round. Secondly, the region’s fintech companies are hitting key milestones and are ready to scale their operations.
“You had companies that were starting to get profitable, and were reaching interesting scale at the beginning of this year,” Packer noted. “We thought deal volume was going to pick up in terms of quality and quantity.”
While challenges remain, such as the lack of substantial exits in the region and the dominance of local investors, the influx of quality founders and the maturation of the ecosystem suggest that Latin America’s fintech sector is poised for a breakout year in 2025.
“Financial services you would take for granted in the U.S. or more developed markets are very immature in the region,” said Nicolas Szekasy, a co-founder and managing partner at São Paulo-based Kaszek Ventures. “There’s a lot of innovation that needs to happen.”
