Business

2021 Global Fintech Rankings: São Paulo is the city with the fourth largest fintech ecosystem in the world

Second edition of Findexable's report in partnership with Mambu brings Brazil and Uruguay moving up on the list; Mexico and Peru down

The city of São Paulo, in Brazil. Photo: Shutterstock
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  • The report shows that in 2020 the financial technology sector grew globally, driven by the COVID-19 pandemic and the digitization accelerated by the health crisis;
  • That boost was enough to add 50 new cities and 20 new countries to the index – meaning these places are home to at least 10 fintechs;
  • There are 83 countries and 265 cities analyzed in this edition.

Brazil is the best-placed Latin American country in the 2021 Global Fintech Rankings, the second edition of the report produced by Findexable, in collaboration with the German cloud banking platform Mambu, and which ranks the financial innovation ecosystems in the world.

The report’s ranking is done by an algorithm, which analyzes data collected by StartupBlink and verified by Findexable. The data comes from platforms such as Crunchbase, SEMrush, and over 60 fintech associations worldwide. Findexable says its proprietary algorithm ignores subjective data (such as interviews) and only considers data such as the number of fintechs in a particular country or city, and their characteristics (aspects like web presence, monthly visits, customer base, and market value).

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The report shows that in 2020 the financial technology sector grew globally, driven by the COVID-19 pandemic and the digitization accelerated by the health crisis. That boost was enough to add 50 new cities and 20 new countries to the index – meaning these places are home to at least 10 fintechs.

Although the United States, United Kingdom, Israel, Singapore, and Switzerland still top the list, the sector is more diversified geographically. There are 83 countries and 265 cities analyzed in this edition.

The number of unicorns (startups valued at $1 billion or more) has also grown: from 61 in April 2020 to 108 in April 2021, according to data from CB Insights. And the volume of investments attracted by fintechs has also increased, from $199 billion to $440 billion. As a result, fintechs now account for 20% of the total value of tech unicorns (in 2019, it was 15%).

However, the report also points out that there is a significant gap between those at the top and the next generation of innovators in terms of funding that must be addressed if the industry is to continue to move forward with new ideas.

READ ALSO: Angel investments in Brazilian startups dropped 20% in 2020

Seed, angel, and Series A investments accounted for just 58% of the $22.4 billion raised from January to March 2021, compared to 66% a year earlier. More than two-thirds of funding came in so-called ‘mega-rounds,’ worth more than $100m each. “What that means is established fintechs can raise money with ease, and at growing valuations (…) Companies that were revolutionary innovators just a few years ago now sit in near monopoly positions thanks to network effects. They have become the ‘new incumbents.’ But what about new innovators seeking seed capital to tackle a brand new problem thrown up by the pandemic. For them, the picture is less rosy,” says the report.

And where is Latin America in the 2021 Global Fintech Rankings?

Two Latin American countries rose in this year’s ranking: Brazil (14th on the global list) and Uruguay (17th). São Paulo’s rising was largely responsible for this evolution of Brazil in the list.

The Brazilian metropolis rose one position compared to 2019’s ranking, becoming the fourth largest fintech ecosystem in the world, only behind San Francisco (USA), London (England), and New York (USA) – and ahead of cities like Tel Aviv (Israel), Berlin (Germany), Boston (USA) and Los Angeles (USA).

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At the same time, Mexico (32nd) and Peru (62nd) lost two and seven positions, respectively. See the region’s position on the ranking below:

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