Fundraising for financial startups in Latin America is likely to be momentarily difficult as chief financial officers told Reuters Next Conference as the prospect of higher interest rates dampened investor appetite for riskier assets. .
Panelists said investors would seek more indications of profitability before pouring money into fintechs in the sector.
“There will be big scrutiny around the projects, like around the prospects of what the real business is; more insights about the entity economics, around the path to profitability; and Mariano Carranza, chief financial officer of Mexican Payments fintech Clip,” said Mariano Carranza. How do you drive?”
According to CBInights, Latino startups, primarily fintechs, raised $14.8 billion in new money in the first nine months of this year, up 174% from last year.
However, signs that investors are more cautious have recently emerged. Earlier this week, Latin America’s largest fintech, NuBank, was forced to cut its planned valuation in an initial public offering by 20% to nearly $40 billion after facing weak investor demand.
“Despite the high interest rates, the growth outlook for these companies in this sector remains very attractive. Therefore, I believe many investors may end up being more selective. Chief at Inter, a Brazilian digital bank backed by SoftBank Group Corp. “Some startups will have to make more disbursements before they can reach such a large amount of debt,” said financial officer Helena Caldera.
Still, he believes that this should not be a long-term trend, as financial inclusion is low in the sector.
Caldeira said the 5.5 billion reais ($971.94 million) raised in the share offering and client deposits from Inter will help navigate a potentially difficult period for capital raising.
Clip raised $250 million in July with SoftBank Latin America Fund and Viking Global Investors LP.
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