Miranda’s Weekly Mex FinTech Monitor

Mexico FinTech News

The parent companies of the three best placed FinTechs in Mexico – Nu, Femsa/Oxxo, and Mercado Pago – all reported disappointing 4Q23 earnings results, with the stocks selling off sharpy after remarkable price appreciation in 2023. In each case costs were on the high side, and the market may be looking for more spending discipline going forward.

 

Femsa/Oxxo reported strong digital user growth, but overshadowed by weak margin, and management changes

Spin by OXXO acquired 1.1 million users during the quarter to reach 9.9 million total users in 4Q23, compared to 5.3 million users in 4Q22. This represents an increase of 86.1% YoY and a 5.3% compound monthly growth rate. Active users represented 70.1% of the total acquired user base. Total transactions per month increased 12.6% during the quarter to reach an average of 47.1 million per month in 4Q23, reflecting an increase in user engagement. Spin Premia acquired 3.7 million users during the quarter to reach 40.2 million total users in 4Q23, compared to 26.1 million users in 4Q22. This represents an increase of 54.3% YoY and a 3.7% compound monthly growth rate. Active users represented 48.0% of the total acquired user base. The average tender during the quarter was 31.0%.

 

Nu reported strong client adds in Mexico due to Cuenta Nu high yields, no loss disclosure

The acceleration of customer net-adds in Mexico QoQ, to almost 1 million, contributed to a total of 5.2 million in 2023. This is what David Velez had to say in the confernce call. “Within just two months, we quadrupled the level of deposits in the country to an impressive total of US$1 billion at the end of 2023, achieving this milestone 3x faster than in Brazil, with a segment of higher income Mexicans that are attracted by the more aggressive value proposition. We are extremely pleased with the success of this strategy even though it is a significant investment, as we believe it unlocks the potential of our member-get-member referral program, enriches our credit underwriting models with more data, and enables our company to become self-sufficient in local-currency retail deposits. This self-sufficiency is crucial for scaling a consumer finance business.” However there was no mention of how much money Nu is losing in Mexico. Aso, Nu now has more deposits than loans in Mexico, which is dragging down the company’s NIM, given paying 1455 or reference rate post taxes.

 

Mercado Libre stock slides on poor 4Q, Mexico FinTech solid

Mercado Libre’ stock fell sharply on 4Q23 results, due to much higher than expected costs. Still FinTech revenues in Mexico grew by 66% to $312mn, one bright spot, driven by the 2023 introduction of a credit card.

Iupana, 02/23/2024, Anthony Pinedo: Mercado Pago crece en transacciones, usarios y créditos

 

Is Rappi leaving the FinTech business? No – the plans in Mexico 

After Rappi announced earlier this year that its debit cards would no longer be available in Mexico starting in February, the company’s CEO, Ivan Cadavid, said that its alliance with Banorte is “stronger than ever”. In an interview with EL CEO, he mentioned that the Mexican market for accounts and debit cards, where Rappicuenta competed, is already quite saturated. Therefore, they opted to focus on the areas of the business that are scaling more effectively and having a bigger impact.

 

Mexican FinTech Doopla has placed almost $600 million pesos in loans in 9 years

Doopla, one of the pioneers of the FinTech ecosystem in Mexico, celebrated nine years of operation, during which it has originated loans for almost 600 million pesos. The FinTech, which today has just over 17,000 active users, offers a 100% online platform that connects people who need credit with investors, while it charges a commission for the transaction. The goal for 2024, anticipated Doopla’s CEO and founder, Juan Carlos Flores, is to originate 188 million pesos in funded loans, which would represent an annual growth rate of 58%.

Latam FinTech Hub, 02/13/2024, Adrián Campos: La FinTech mexicana Doopla ha colocado casi 600 mdp en créditos en 9 años

 

FitBank, la plataforma de Banking as a Service brasileña, consolida operaciones en México y se prepara para debutar en Guatemala

Fitbank, a Brazilian Banking-as-a-Service platform, is consolidating its operations in Mexico and preparing for its debut in Guatemala.  Fitbank aims to cater to the evolving needs of financial institutions and businesses in these regions. This strategic move underscores Fitbank’s focus on establishing a strong foothold in key markets across Latin America.

Other news

Iupana, 02/23/2024, Anthony Pinedo: Mercado Pago crece en transacciones, usarios y créditos

 

LatAm FinTech News

Ebury and Nium Forge Partnership for Cross-Border Payments in Brazil

Ebury, a FinTech specializing in SME transactions, has expanded its partnership with Nium, a leader in global payments, following Ebury’s regulatory approval of its acquisition of Brazilian FinTech Bexs. Operating as Ebury Bank in Brazil, the institution aims to facilitate fast, reliable, and affordable cross-border payments leveraging Nium’s infrastructure. The collaboration, extending from Europe to Brazil, integrates Nium’s cross-border payments solution into Ebury’s payment flows to enhance efficiency and extend connectivity to new markets.

Finance Magnates, 02/22/2024, Tareq Sikder: Ebury and Nium Forge Partnership for Cross-Border Payments in Brazil

 

The Brazilian neobank Will Bank is majority acquired by Mastercard.

Mastercard, the global banking giant, has acquired a majority stake in the Brazilian neobank Will Bank. This move signals Mastercard’s strategic expansion into the digital banking space, leveraging Will Bank’s innovative platform to enhance its digital offerings and cater to the evolving needs of consumers in Brazil and beyond. The acquisition reflects a broader trend of collaboration between traditional financial institutions and FinTech companies, highlighting the growing importance of technology-driven solutions in the banking sector.

 

Other news 

 

Global FinTech News 

Capital One seeks to buy Discover Financial Services in $35bn deal

Capital One, a Virginia-based financial firm boasting significant deposits and assets, has announced its intention to acquire Discover Financial Services, a prominent player in digital banking and payment services. Capital One sees this acquisition as pivotal in its ambition to become a global payments powerhouse. By merging with Discover, Capital One aims to capitalize on synergies between the two companies, leveraging Discover’s technology and customer base to enhance value for their combined customer base of over 100 million. The deal, expected to finalize in late 2024 or early 2025 pending regulatory and shareholder approval, is projected to yield a return on invested capital of 16% by 2027, with an internal rate of return exceeding 20%.

FinTech Futures, 02/20/2024, Cameron Emanuel-Burns: Capital One acquires Discover Financial Services in $35bn deal

 

JP Morgan and fellow Viva Wallet shareholder WeRealize exchange lawsuits

In December 2022, JP Morgan acquired a 48.5% stake in Viva Wallet for $800 million, signaling its entry into Europe’s payments market. Recent reports indicate tension between the two companies, with board members resigning and disagreements over management decisions. Viva Wallet’s CEO has replaced JP Morgan’s recommended board replacements with internal staff and former investors. The friction may stem from JP Morgan denying Viva Wallet’s request for a $100 million loan and perceived delays in business plan execution.  FinTech Futures, 02/20/2024, Tyler Pathe: JP Morgan and fellow Viva Wallet shareholder WeRealize exchange lawsuits

 

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