Canadian financial services giant Scotiabank has teamed up with venture capital firm QED Investors to invest in and promote innovative fintech startups in Latin America.
To begin with, the joint venture will invest in those startups whose products and services improve customer experience dramatically. The strategy is a win-win for all, because both the bank and the startups can grow leveraging each others’ resources.
“The business models of fintech startups are attractive to consumers and an opportunity for us to learn, invest and partner,” said Ignacio Deschamps, Group Head, International Banking and Digital Transformation at Scotiabank, in a statement.
The partners will set up a team of experts to identify startups with disruptive technology solutions and lucrative business models.
The Canadian bank says it has a significant presence in the Pacific Alliance countries (Mexico, Chile, Colombia, and Peru), and can assist QED in evaluating the right investment opportunities, besides helping to gather resources and customers for young entrepreneurs.
With digital banking becoming a norm across the developed world, banks are scrambling to stock up on financial technology.
Over the past 18 months, the Canadian bank has invested millions of dollars in new technologies such as analytics and machine learning, and has set up digital banking labs in dozens of countries, including Mexico, Chile, Colombia, and Peru.
Among the tech startups it has already supported in Latin America are Kabbage and SecureKey.
“We see significant opportunities for fintech in Latin America, and look forward to leveraging our entrepreneurial and operational expertise to the companies we will invest in,” said Bill Cilluffo, a partner at QED Investors who is responsible for Latin America.
Based in Alexandria, VA, QED Investors is basking in the glory of its successful promotion of Credit-Karma and Green Sky, some of the world’s most prominent technology startups.
But its investments in Latin America are few and far between. Brazil’s NuBank, Guiabolso, Pitzi, and Bankfacil are among the firms it bought stakes in in the region. It has recently made its debut in Mexico with an investment in Konfio.
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