INSUBCONTINENT EXCLUSIVE:
Thiago is a fintech entrepreneur, investor, and columnist
He is currently a product leader at Oyster, a neobank for SMEs in Latin America. More posts by this contributorAlthough the 2008 global
financial crisis sparked the fintech movement, in Latin America, the rise of ecommerce was responsible for the first wave of fintech
startups.Because digital payments were key to enabling the growth of ecommerce, investors funded companies like Braspag, PagSeguro, PayU,
Mercado Pago and Moip in the early 2000s to take advantage of this opportunity.Payment is still the most relevant segment, with successful
cases like Stone and PagSeguro, but after the financial crisis, we started to see the rise of financial technology in lending and
neobanking, generating impressive cases like Nubank, Neon, Creditas, Credijusto and Ualá.As the ecosystem evolves and expands, let’s
take a closer look at emerging trends in Latin America that might give us a hint about where to expect its next fintech unicorns.Financial
services for the gig economyLatin America has seen explosive growth in ride-hailing and food delivery platforms such as Uber, Didi, Rappi
and iFood, creating a totally new market opportunity — many gig economy workers can’t access basic financial services such as bank
accounts, personal loans and insurance
Even those who have access often struggle with financial products that that don’t suit their needs because they were designed for
full-time workers.Spotting this opportunity, Uber Money launched at Money 2020, focusing on providing drivers with financial services
As 50% of the population in Latin America is unbanked where Uber has more than 1 million drivers, the region is definitely a ripe market
Cabify is going even farther by spinning off Lana, its company that provides financial services, so it can expand its market beyond Cabify
drivers to include other gig economy professionals.Although established players in this sector have a clear advantage, they aren’t the
only ones looking to explore this opportunity; Brazilian YC alumni Zippi is offering personal loans to ride-hailing drivers based on their
As the gig economy tends to keep growing in the region, I believe we will start to see more solutions for those professionals.Rethinking
insuranceAs the banking world has been shaken by fintechs, insurance companies are growing aware that high regulatory barriers won’t
protect their industry from disruption.Insurance penetration in Latin America has been historically low compared to developed markets —
3.1%, compared to 8% — but the insurance market is growing well and tends to close this gap
Adding this to bad services and complex products that insurances provide, insurtech has an immense opportunity to grow.Because purchasing
insurance is historically a complicated and painful experience, the first insurtechs in the region focused on providing a better experience
by digitizing the process and using online channels to acquire customers
Those insurtechs worked together with the insurance companies and operating as online broker, but now, we’re starting to see startups
providing new insurance products, as well as traditional insurances in different models.Some are partnering with insurance companies while
others are competing directly with them; Think Seg and Miituo partnered with larger players to provide a pay-as-you-go model for car
insurance, while Mango Life and Kakau are offering a better purchasing experience
On the other end, Crabi and Pier are rethinking the insurance model from the ground up.As insurtechs emerge as a potential threat,
incumbents are more willing to work with startups that can improve their services to enable them to compete on better grounds, which is
exactly what companies such as Bdeo, Lisa, and HelloZum are doing.Although penetrating the insurance industry is more complicated than other
financial services due to high regulatory demands and steep initial operating costs, insurtechs fueled by VC investment will without any
And, if we’ve learned anything from other fintech segments, it’s that entrepreneurs will find ways to overcome initial challenges.
