Financial technology firms in Colombia have been riding a wave of venture capital investments in recent months, underscoring the growing relevance of South America’s third-largest economy as a prominent fintech ecosystem in the region.
Last week, Bogota-based Buy-Now-Pay-Later firm Addi announced a significant boost with $50 million in debt financing from Goldman Sachs. This was supplemented by an additional $36 million in equity funding from venture capital heavyweights such as Andreessen Horowitz and Union Square Ventures.
This latest funding round builds upon the $65 million Series B raise completed by the Bogota-headquartered startup in the summer of 2021. GIC Private Limited, a Singaporean sovereign wealth fund, also participated in the most recent round.
One local analyst highlights that regulation advancements are facilitating increased investments in the sector. “There has been greater regulatory certainty for fintech companies,” says Erick Rincon Cardenas, former president of Colombia Fintech. “This allows digital financial services to have greater development potential with clearer legal frameworks.”
A wave of fintech investments in Colombia
Addi’s recent financing round further solidifies the trend of substantial investments in Colombian fintech companies. Total equity investments surpassed $160 million since the beginning of the year, a sizeable influx of capital into the country’s burgeoning fintech ecosystem.
Also in March, 2-year-old fintech Yuno secured a boost with $25 million in a Series A funding round, spearheaded by a coalition of investors including DST Global Partners, Andreessen Horowitz, Kaszek Ventures, and Monashees, along with the US-based investment Tiger Global.
In February, Colombian payments fintech Bold closed a significant milestone, securing $50 million in a Series C funding round led by private equity firm General Atlantic. Founded in 2019, Bold serves small and medium-sized enterprises (SMEs) in the country.
Finally, Bogota-based Simetrik raised $55 million in a series-B round led by U.S. giant Goldman Sachs. Also founded in 2019, the company offers payment management software to businesses.
Latin America’s third-largest fintech ecosystem
According to a report by the Inter-American Development Bank, the Colombian fintech ecosystem ranks as the third largest in Latin America. As of 2021, it boasted 279 fintech companies, trailing only behind Brazil and Mexico. Since then, the ecosystem has experienced continued expansion. Spanish firm Finnovista estimated that by last year, the number of fintechs in Colombia had nearly reached 370, with nearly a third of them specializing in lending services.
In recent years, the country has been trying to make progress on regulation, too. It is edging closer to adopting Open Finance, a framework that has become standard in several other Latin American countries like Chile and Brazil. Central banks are actively promoting the implementation of such frameworks, recognizing the fintech industry as a crucial partner in driving financial inclusion.
Colombia has also become a destination for major regional players in the fintech sector. Nubank, the leading digital bank in the region, has entered the Colombian market and has already garnered over half a million clients since its launch. The digital bank has recently obtained a license to operate as a financial institution, paving the way for it to offer savings accounts in the country.
