Given the startup ecosystem in Brazil, fintechs alone are responsible for providing more than 100,000 jobs. Fintechs focused on payments, digital services, credit, and backoffice are the ones that employ the most; 78% are companies of up to 50 employees, however, fintechs with more than 100 employees increased 2.5% over the previous year.
The data are from the Fintech Report 2022, issued by Distrito platform, which mapped 1,289 Brazilian fintechs operating in 14 categories: credit, payment methods, backoffice, digital services, technology, cryptocurrencies, investments, risk and compliance, loyalty and benefits programs, personal finance, crowdfunding, debt, foreign exchange, and cards.
The survey showed that the fintech ecosystem in Brazil experienced its biggest growth leap in the last five years, from 2016 to now, when 819 new companies came on the market. The sector’s development follows the good momentum of the entire innovation ecosystem in the country – last year, startups focused on financial solutions took 40% of the $9.4 billion invested in Brazilian startups.
Moreover, fintechs play an important role in the process of financial inclusion and, according to Distrito report, being a sector with many young players, they have plenty of room for the development of niche solutions, which still do not have leading companies.
Credit is the most representative category in the Brazilian ecosystem, with 225 fintechs operating in this market, followed by payment fintechs (185) and backoffice fintechs (183), driven by the growth of e-commerce across Latin America. When looking at the model, more than half (53.9%) are B2B, providing solutions for other companies; B2C fintechs now account for 25.9% of the total.
Top 10 Brazilian fintechs
Distrito report also listed the 10 startups that have cemented their operations and brands based on a scoring algorithm that looks at headcount, presumed revenues, funding, and social media metrics. In this ranking, digital services fintechs stand out, especially digital banks, such as Nubank, neon, Agibank, and C6 Bank. Next, come three payment fintechs, PicPay, PagSeguro, and EBANX; two insurance fintechs, Creditas and Pravaler; and one cryptocurrency fintech, Mercado Bitcoin, which is also the youngest on the list (and is already a unicorn).
Most of the top 10 companies operate in the B2C model, a model that guarantees greater capillarity and consumer awareness than the B2B model.
In an industry that shows no signs of slowing down – although perhaps the volume of investments will decrease compared to 2021 º the report points to some trends, such as the rise of cryptocurrency fintechs, which already number 88 companies and should benefit from the regulatory framework for operations with cryptocurrencies passed by Brazilian Congress, Central Bank, and Securities and Exchange Commission.
Another important trend for Brazil‘s fintech ecosystem is how companies from different sectors are seeking to add financial services to their core business – the so-called “embedded finance”. A great example of this are large retailers such as Magazine Luiza and Mercado Libre, which are beginning to offer digital accounts, credit, and e-wallets to their customers.