The story of fintech in Latin America is multifaceted. Across the region, founders and investors are navigating a mix of cautious optimism, renewed appetite for investment, and the rise of new business models alongside the reinvention of established players. We asked VEF Investment Manager Cathal Carroll four questions about what he observed on his recent trip to Mexico, Brazil and Argentina.
What surprise or insights about the fintech ecosystem do you want to share from your trip?
The first thing is what a great supporter of fintechs the Central Bank in Brazil is. They are very committed to level playing field in payments and credit for consumers and supportive of fintech companies distributing the market. If we are looking broader, one of the most striking developments in Latin America is how traditional institutions are adapting to the fintech era across the continent. Again, in Brazil, the largest established banks are moving to become fully cloud-native. That shift shows how far fintech has raised industry standards, with what once set fintechs apart now becoming a benchmark for banks. This convergence creates new opportunities for competition, collaboration and innovation within the ecosystem and we see great potential for the rise of new fintech stars within this overall shift within the financial services industry.
What investment trends are emerging in Mexico, Brazil and Argentina?
There is a strong sense of investor appetite building again. In Brazil, local investors are positioning for a rate-cut cycle. In Mexico, family offices are looking for direct private exposure, while in Argentina the equity market is opening up as pension reform approaches. That cross-country investor energy feels like a real shift compared to the last couple of years.
What is the general sentiment on the ground among founders and investors?
Cautious optimism. Many see political reform and a normalisation of interest rates, already anticipated in public markets, as factors that will encourage more investment into private companies.
Companies in our portfolio, like Creditas and Konfio, that have been cautious with their growth over the past few years, are ready to accelerate their growth after having achieved the profitability milestone.
What business models are defining the next wave of fintech in Latin America?
We’re seeing the next generation of fintech infrastructure companies maturing into true regional platforms, with sticky enterprise customers, such as large high-value clients that are well integrated, and strong growth vectors driving scalable growth. We also see fintech companies with operational excellence proving that you can marry complex real-world opportunities with fintech economics, showing margin scalability beyond just lending.