Brazil’s fintech ecosystem embraces new growth opportunities

As Brazil’s banking and financial systems undergo modernization, the fintech ecosystem is pursuing new opportunities. Initiatives such as instant payments and digital currency are opening alternative avenues for growth, particularly for companies supporting other businesses in these areas.

The B2B fintech segment in Latin America has seen significant growth, with 1,284 startups representing 47.3 percent of the region’s fintech landscape. Brazil accounts for 66 percent of this total, according to data from the innovation network Distrito.

Investment trends in business-focused fintechs in Latin America have shown a substantial increase since 2018, with volume peaking in 2021, with over USD 2 billion across 174 deals. Although there was a drop in investment in 2023 (with 71 deals amounting to USD 430 million), by May 2024, investments had already reached USD 400 million, indicating potential to surpass last year’s figures.

“The local fintech landscape has evolved from a focus on consumer-focused models to a stronger emphasis on B2B solutions, with companies helping traditional financial institutions and digital-native players modernize their infrastructure and incorporate new capabilities,” said Bruno Diniz, chief executive at Spiralem Consulting and an author on the Brazilian financial services ecosystem.

B2B fintechs are crucial to the Central Bank’s modernization agenda, creating products based on new approaches. Noteworthy initiatives include the PIX instant payments system launched in 2020. PIX reached 114 million users and nearly 42 billion transactions in 2023, up 75 percent from the previous year, according to Central Bank data.