The recent floating of Uruguay fintech dLocal on the Nasdaq made waves internationally when a near 48% jump in the share price on first day trading saw the company valued at almost $9 billion, becoming the South American country’s first unicorn in the process.
Yet dLocal looks to be just one of many Uruguay fintech companies that will make a mark internationally, with a number of firms seeing rapid and strong growth that bodes well for the future.
As a new report in El Pais highlights, the success of dLocal is already fuelling optimism in the Uruguay fintech sector, with Ximena Aleman, co-founder of open banking platform Prometeo, telling the Uruguayan newspaper that “Uruguay has been validated as a technology hub, especially in fintech.”
Below, some of the players to watch are highlighted, including Inswitch, Bankingly, and MiFinanzias, as well as Prometeo. Another of the companies mentioned by El Pais, Paganza, was previously named by Biz Latin Hub as a Uruguay startup to keep an eye on in the post-pandemic period.
If you are active in the fintech sphere and interested in business formation in Uruguay, or engaging in the market in some other way, read on to get some insight into these four strong prospects.
Or go ahead and contact us to discuss your business options.
Uruguay fintech: 4 firms making major progress
Inswitch: Born in 2002, Uruguay fintech Inswitch specializes in developing electronic money solutions and has seen a major evolution in its business approach over the past 18 months, having moved to a cloud-based approach based on offering fintech as a service (FaaS). According to El Pais, the company has seen recent annual growth hit 40%, and counts major banks and card issuers among its clients. According to Amilcar Perea, general manager at Inswitch, the cloud-based strategy has paid off, adding clients from 15 countries over recent months, including from Africa and Brazil, with he company planning to make major inroads into Asia before the end of the year.
Bankingly: Offering a platform for digital channels and web-based tools for financial institutions, Bankingly is expected to raise $7 million in investment in the coming months, with the intention of growing its presence from 15 to 35 countries, as well as adding new products to its portfolio. According to Martín Naor, CEO at Bankingly, the company saw 120% growth in 2020 and has almost doubled its staff in 2021 amid ongoing strong growth — with plans to triple those numbers by the end of the year. According to El Pais, Noor said the company is looking in particular for American and regional investors.
MiFinanzas: Established in 2016, MiFinanzas offers financing to small- and medium-sized enterprises, and to date has already provided more than $100 million to its clients. As of June 2021, the company’s outstanding loan portfolio totalled US $10 million — 2.5 times what it stood at in April 2020 — with an average collection period of 60 days and a delinquency rate below 4%. According to Milton Rodríguez, CEO at MiFinanzas, the Uruguay fintech cannot keep up with demand for its products. “Everything we publish on the platform is sold instantly. What’s more, we have an unmet demand from investors asking for more products. There is a lot of money to place, we have people on the waiting list,” he told El Pais.
Prometeo: The open banking platform Prometeo saw strong growth during 2020 as the global pandemic forced more and more people online, with the company reporting a doubling of turnover that year, and tripling its staff numbers in the first half of 2021. Allowing users to access and use their credit profile for a range of financial institutions, this Uruguay fintech has been attracting significant interest from outside the country and is plotting entries into Latin America’s two largest economies — Brazil and Mexico — by the end of 2021, having already established itself in nine regional markets and built relationships with 44 financial institutions.
Uruguay fintech thriving in a developed market
The Uruguayan market is one of the most well-developed in Latin America, ranking third in the region in the UN’s Human Development Index, with an estimated 60% of its population considered to be middle class.
The country benefits from long-standing political and economic stability, with some of the lowest crime rates in the region. Meanwhile, its secure and secretive banking system, as well as its strong adherence to rule of law, have seen the country earn the nickname of the “Switzerland of South America.”
Uruguay is known as an international trade hub and is a founding member of the Southern Common Market (Mercosur), a regional economic integration that also includes Argentina, Brazil, and Paraguay, and which celebrated 30 years since its founding earlier this year.
Uruguay has achieved its development despite being one of the smallest countries by area in South America and having a population of less than 4 million people, boasting a gross national income (GNI) of $16,230 — a figure that places it as a high-income nation based on standards established by the World Bank.
Biz Latin Hub can help you doing business in Uruguay
At Biz Latin Hub, out multilingual team of corporate support specialists is equipped to help you doing business in the Uruguayan market. With our complete portfolio of back-office solutions, including company formation, legal, accounting, and recruiting services, we can be your single point of contact for entering and doing business in Uruguay, or any of the other 17 jurisdictions around Latin America and the Caribbean where we operate.
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