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THE COMPANY BUILDERS
RISE OF FINTECH IN MEXICO
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FUNDED STARTUPS MKT SHARE IN LATAM80 35% 60%
ACTIVE INVESTORS
7,000+
MKT SHARE IN MEXICO
DELIVERED $4.5M
JOBS CREATED
1,000+
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Part 1 - Environment in Latam and Mexico
Part 2 - Fintech in Mexico
Part 3 - Regulation, contributing to or limiting growth?
Part 4 - Future of Fintech in Mexico
AGENDA
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High Internet/smart phones penetration
Growing entrepreneurial ecosystem
Economic growth driven by private consumption
ENVIRONMENT IN LATAM & MEXICO
Low banking penetration
Low access to capital for consumers and SMEs
Unsophisticated consumer credit offer
More than 700 Fintech startups in Latam - 25% of IT capital investments for this sector
Highly profitable banks dominating for decades that have not leveraged
technological, digital and mobile solutions, behavioral changes of end-customer and
creation of new business models
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Startups128
Startups158
Startups240
88% increase in number of Fintech startups from 2015 to 2017 Mexico leading Fintech market with 730% annual growth
Equity corwdfunding highest growing sector (+256%)
MEXICO LARGEST FINTECH MARKET IN LATAM
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SITUATION IMPLICATION
Growth driven by segments with great innovation and dynamism:• Lending (22%)• Enterprise Fin. Mgmt (75%) • Crowdfunding (38%)• Insurances (114%)• PFM (53%)
GROWTH PER SEGMENT
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SITUATION IMPLICATION
More than 76% of Fintech startups focused on B2C solutions which means that the retail banking is the most threatened sector
TARGET CUSTOMER
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SITUATION IMPLICATION
STARTUP MATURITY STAGE
87% of them have been operating for less than 5 years (55% less than 2 years), however more than 61% is ready to scale or already expanding
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SITUATION IMPLICATION
They have proving and improving their models in Mexico but could easily scale and take their innovation to Latam or other markets where they have similar issues.
INTERNATIONALIZATION
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SITUATION IMPLICATIONAlmost 30% is working on mobile solutions which will allow them to reach and important portion of the population and 31% is working on open platforms, APIs or sharing economy which highly rely on collaboration
MAIN TECHNOLOGY
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REGULATION IN MEXICO“Fintech Law” currently in congress for approval covering crowdfunding, digital payments, cryptocurrencies and new innovative models.
Benefits could be inmense: • reduced operation risks, • more transparency for digital platforms, • higher security and protection for consumers, • Increased confidence in new fintech models, • Reduced uncertainty which could lead to higher capital investments in the sector
Growth will be greater with clear rules!
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FUTURE OF FINTECH
Fintech will thrive and continue growing due to:
strong adoption of online/mobile culture of innovation in the financial services sector increased demand from unbanked and underbanked consumers and businesses supportive political and regulatory environment
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FUTURE OF FINTECH• Fintech will drive economic
development as it presents more efficient and less expensive solutions
• Disintermediation of traditional key players (banks and fin. institutions)
• Financial services expansion by focusing on financial inclusion of the unbanked or underbanked population
• Startups competing to get up to 30% of the banking market in Mexico, (>US$30 billion)
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OR DISAPPEARCOLLABORATE
THE COMPANY BUILDERS