Fintechs, the most important startups in Mexico
Mexico is a country that has been attractive for the development of companies that offer financial products and services through technology (fintech). Among all startups, the fintech sector is the most important in the nation.
There are several reasons that have influenced the situation to be like this:
Cash remains the main method for making transactions.
There are low rates of financial inclusion, which means that there is a relevant area of opportunity for fintech companies to serve markets that traditional financial companies cannot serve due to the high risk level they pose.
The creation of the Fintech Law in 2018, which regulates their operations and functioning. The law seeks to have more transparency and security in the financial system in order to guarantee the safety of its users.
The National Commission for the Protection and Defense of Users of Financial Services (Condusef), which can support clients in cases of any problem or dispute.
Easy access to millions of people: 88.2 million Mexicans use cell phones and, of these, more than 90% have a smart device to carry out financial operations.
According to the Fintech and Incumbents Radar 2021 created by Finnovista, the number of registered fintech grew by 16% from 2020 to 2021. In December 2021, 512 companies were registered in operation.
When startups were asked to indicate their sources of funding, 60% of those that claimed to receive investment indicated that funding came from angel investors, 45% from friends and family, and 33% from Venture Capital funds (VC). Other sources of financing were accelerators or incubators (24%), other corporate entities (12%), financial institutions (10%), government support (10%), crowdfunding platforms (8%) and debt funds of risk (5%).
Some of the best known fintechs in Mexico are Kueski, Clip, Fondeadora, Belvo, Clara, Minu, Credijusto, Bitso and Konfio, among others.
Sources:
Secretariat of Communications and Transportation, “In Mexico there are 84.1 million internet users and 88.2 million cell phone users: ENDUTIH 2020”, June 22, 2021.
Finnovista, IDB, Pacific Alliance, Radar Fintech and Incumbents 2021, December 2021.
