Brazil remains Latin America’s largest and most dynamic fintech market. In mid-September, CEO Dave Nangle, CIO Alexis Koumoudos and Principal Evin Mc Kay spent time on the ground for São Paulo Tech Week, meeting portfolio companies, founders and local investors. Their conversations point to an ecosystem as active as they have ever seen it, a new generation of AI-native fintechs taking shape, and a gap in late-stage funding that continues to play to VEF’s strengths.
What was the biggest theme of the week?
Talent, with AI as the catalyst. Senior operators are spinning out of the first wave of scaled Brazilian fintechs, such as Nubank and Stone, and are being well funded to build their own companies. AI is emboldening them, lowering the barriers to starting a business so that a small team can now build with a fraction of the capital once required. Decade, an AI-powered wealth management platform founded by Nubank’s former CTO, is the clearest example, having raised an US$85 mln seed round, the largest in Latin American history, with a queue of similar teams behind it. For us, this is a clear sign of a maturing ecosystem, where the first generation of winners is now producing the founders, capital and know-how for the next.
What are these new founders building?
They are building across every layer of financial services, but three areas stood out. The first is deep vertical software, where platforms built for a single industry, such as healthcare or legal services, are evolving from software tools into AI agents that perform the work itself. That opens up large opportunities to embed financial services such as payments and credit. The second is horizontal platforms, such as AI-native ERP, accounting and tax software, taking on incumbents at a fraction of the cost. Brazil’s ongoing tax reform is a powerful catalyst in this space. The third is next-generation financial infrastructure: banking-as-a-service platforms, stablecoin-based cross-border payments, and tools for payment orchestration and fraud prevention. Across all three, many of the companies we met are already real businesses, generating tens of millions of dollars in revenue and growing at two to three times a year with far leaner teams than in the last cycle.
How would you describe the funding environment in Brazil today?
Healthy at the early stage, thin at the later stage. Local funds are actively writing seed cheques, and there has been a steady run of Series A rounds in the $10–30 mln range. Larger growth rounds typically depend on international capital, which has become harder to attract as AI absorbs much of the focus of US investors. What is available is highly selective, with the largest cheques going to the clearest AI plays. That gap in late-stage equity is exactly where VEF has historically found its best opportunities.
What is the latest from Creditas on the ground?
We spent quality time with the top team in São Paulo. The business is performing strongly, with growth compounding and increasingly predictable: in the second quarter the loan portfolio reached $1.6 bln, up 26% year on year, with revenues up 30%. We continue to be impressed by its AI transformation, which is allowing growth to outstrip costs. Headcount is down to c.1,500 from c.2,000 at the start of the year, customer acquisition costs are at record lows, and AI agents now handle all early-stage collections chats on auto loans, and AI sales agents out-convert human consultants in their target segments.
What is the outlook for exits and listings?
The US IPO window has reopened for Brazilian fintech, with PicPay and Agibank both listing this year and a growing queue of companies preparing to follow. That said, the bar for an IPO has clearly been raised – investors are looking harder at scale, growth and profitability. As a result, IPO candidates are focused on reaching the right profile before testing the market, which we see as healthy discipline. Creditas, is a case in point, continuing to get itself IPO-ready internally, a key direction of travel for all involved with the company. We left São Paulo encouraged, both by the depth of the next generation and by the maturing routes to liquidity for the leaders.