Brazil’s financial technology market is growing like never before, with the number of fintech (financial technology) startups rising to 220.
“The Brazilian fintech scene is booming,” says research firm Deloitte, which has added the Brazilian city of Sao Paulo to its latest index of global fintech hubs.
Brazil has more fintech startups than any other country in Latin America, with venture capital investment reaching US$161 million in 2016.
In the last couple of years, according to the report, many of the country’s financial institutions have made huge investments in fintech startups.
Last year, Brazil’s largest bank, Banco do Brasil (Bank of Brazil), set up a lab in Silicon Valley to identify and explore new fintech solutions.
The Brazilian startups named in the report include Guia Bolso, Nubank, and Creditas. Among them, Nubank is the most promising startup Brazil has ever created, recently raising more than US$130 million from venture capital funds.
Deloitte says the country’s financial authorities are watching the industry closely, and the government will soon frame laws to regulate the sector.
Major investors in the sector are Kaszek Ventures, Redpointe Ventures, 500 Startups, QED Investors and the IFC. There is a string of accelerators, with Oxigênio, Startup Farm, Wayra, and Cubo being the major ones.
With shared workspace providers like WeWork expanding rapidly in the country, analysts say the Brazilian ecosystem will grow substantially over the next 12 months.
“We expect to see incumbents work with IT companies to attract talent and create more programmers to interact with local fintechs. We also expect to see further advances from Brazilian regulators. There are challenging but exciting times ahead,” said Deloitte in its report.
Another Latin American city that found a place in the index is Mexico City.