FinTech Cities: Sau Paulo

FinTech Cities: Sau Paulo

There are various reasons as to why Sau Paulo is often referred to as Brazil’s innovation powerhouse. First off, its home to around 15 million people of which there are almost half the country’s billions. It also accounts for around 18per cent of GDP of the country. Moreover, more than 60 percent of start-ups in the whole country are based in Sau Paulo alone! It has probably the biggest innovation ecosystem in Latin America and currently has over 2000 ventures working on tech products.

Reasons for Scope of FinTech in Sau Paulo

Sau Paulo is Latin America’s largest economy. And some of the staggering statistics which really make it perfect for FinTech expansion are given below.

Another important factor is the high-interest rate charged to people claiming loans from local banks, which is around 50per cent, more or less. Furthermore, owning a credit or debit card is also not the same as in other countries; rather, it’s quite expensive and cannot be afforded by the poor.

FinTech Companies and Their Ecosystem

In the current update of Fintech Radar, there are 377 Fintech startups in Brazil leaving behind Mexico, which previously had the most FinTech startups, making Brazil the biggest FinTech ecosystem in the entire region. However, more recently, the faster-growing subsectors are Digital Banking, Wealth Management, and Markets & Trading. Of the entire FinTech industry in Brazil, 30 percent have already expanded worldwide; however, 81 percent of this has expanded within Latin America.

The ecosystem of Sau Paulo is very useful for the industry as its already home to much of the headquarters based in South America. The incubator of Google and other major companies are situated in Sau Paulo, and the city allows the process of initiating a new company relatively fast, and it’s possible to open a new company in just over five days compared to 100 days as before.

Let’s see what some of the big guns are when it comes to FinTech in Sau Paulo.

a) Nubank

Formed In 2014, this is undoubtedly the most promising FinTech startup Sau Paulo has delivered, with 16 million people currently having its credit card and estimated annual revenue of $170 million. It offers various digital services to its customers, including payment card operations, transactions between users, transfers to any bank, and much more. The important thing being all these services come totally free of cost. All you need to access the services is just a smartphone!

b) Creditas

As a consequence to people being charged high-interest rates in loans, Creditas came into existence and were formerly known as BankFacil. The main aim is providing collateralized loans by partnering up with a bank. It provided around $130 million worth of loans last year (2018), and it’s upon an uphill trajectory since its creation. The annual revenue, however, is estimated to be $1.5 million, which is comparatively low as compared to Nubank.

c) GuiaBolso

Launched in 2016, it’s a customer credit marketplace offering loans from local banks. The app is currently expanding its services to include investments and stuff.

d) Ebanx

The main goal is connecting the e-commerce merchants across Latin America like AliExpress and Spotify and is currently working on more projects as well. The main theme focused is on cross-border payment processing.

 

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