Fintech South Hub has turned Uruguay into a beacon for the sector in Latin America.

Uruguayan fintech entrepreneurship is thriving within a beneficial tax system, leveraged by a long history as a financial services provider and crowned by the multiplication of local and international technology companies dedicated to developing innovative solutions for the sector.

The first and enthusiastic edition of the Fintech South Hub event was recently held in Montevideo, which served as a meeting point for regional leaders of fintech companies, investors and presidents of fintech chambers from Brazil, Peru, Paraguay, Argentina and Uruguay, among others, who gave conferences on open banking, crypto integration, payments, data analysis, venture investments in startups, regulation, among other topics, in addition to serving as a networking space for business development.

Representatives from Ripio, Mercado Pago, Prometeo, Regum, and Interbaking, investors from funds such as Incapital or Roble Capital, and authorities from the Central Bank of Uruguay participated. The initiative was part of the strategy to position the country as a business and innovation hub, and the investment, export, and country image promotion agency, Uruguay XXI, had a stand where it presented support tools for foreign investors.

In addition, the investment project manager of Uruguay XXI, Alvaro Brunini, participated in the conference “How to finance and grow your startup,” where he expressed the agency’s role in raising capital companies need. “What we do is to systematize the information of startups and companies looking for investment,” he explained.

“At the early stage level, what we ask -because that is what the investment funds ask us when we meet with them is that they tell us about their experience, where they studied, where they worked, not only the team of founders but also the main roles of the startups. We ask them to tell us about their expansion plans, to be clear about the investment tickets they are looking for, and the startup’s valuation at that stage. This way, we can segment and know which funds make sense to talk to,” he said.

The conference was also attended by the manager of innovation and entrepreneurship of ANII, Ximena Camaño, the manager of ANDE, Yamandú Delgado, the Manager Partner of Alaya Capital, Juan Manuel Giner, the executive director of the Association of Young Entrepreneurs, Juan Abel, and the founder of Pivot.lat, Santiago Aramendia.

The night before the main event of Fintech South Hub, its organizers -the Uruguayan Chamber of Fintech and the DaVinci Foundation- hosted a reception on the 22nd floor of the World Trade Center for international entrepreneurs in the sector who had already arrived on the country to participate in the event.

Uruguay XXI’s Investment Manager, Alejandro Ferrari, gave a country presentation for some 80 entrepreneurs from Mexico, Paraguay, Chile, Colombia, Peru, and Argentina, who then participated as attendees and panelists at the Fintech South Hub.

“Uruguay has a unique combination for investors: reliability and certainties, ease of doing business, talent and quality of life. Several multinational companies have already chosen Uruguay as a services hub,” said Ferrari. “People who come to Uruguay get to know us and invest and stay in the country,” he said.

Uruguay’s fintech maturity

Uruguay is the country with the highest “fintech maturity” index in Latin America, according to the Fintech Global Vision 2023 report conducted by Finnovating. According to the report, maturity is given by the number of active fintechs per million inhabitants, and in that aspect, Uruguay tops the list of the first 10 Latin American countries. Panama and Chile follow Uruguay.

“The most digital countries with the most flexible regulations are those that generate the most fintech per capita,” explains the report, which aims to “simplify the complexity of the fintech sector by analyzing, standardizing and comparing information from 75 countries.” Uruguay is among the 20 countries with the highest maturity index in the list of this global country maturity index, above Australia and Panama.

The Uruguayan fintech “ecosystem” has positive characteristics for the sector’s development. These include Uruguay’s good reputation as a financial center in the region, the adequate qualification of human resources in the ICT and economic sectors, and a coordinated institutional system supporting this type of venture development.

It is estimated that around 60 fintech companies in Uruguay are mainly oriented to payment chains, open banking or open finance, crypto, loans, trading platforms (alternative investment vehicles), etc. Most of them have a larger scale of business outside the country. “Uruguay is a service exporting hub, so we have many fintech exporting services to the region, promoted from Uruguay,” explained the Uruguayan Fintech Chamber. “The creation of fintechs has been exponential. We have been growing in the rate of affiliates between 20% and 30% per month”, they added.

On the other hand, investment in Uruguayan fintech companies is also booming, and a study carried out by the Uruguayan Association of Private Equity (URUCAP) together with the Ferrer study revealed that 20% of the investment operations carried out in Uruguay are in fintech companies. “It is vertical in which most operations were registered,” Manuel Lecuona, a lawyer at Ferrer law firm, told Uruguay XXI.

The study, which will be published in the next few days, was carried out based on surveys and also contemplates investment operations in technology companies in agriculture, health, artificial intelligence, and virtual reality, among others.