The Fintech Sector in Mexico Remains Attractive Amid Political Uncertainty and Growth Potential

With the arrival of Donald Trump to the presidency of the United States, uncertainty has become present, however, the fintech sector in Mexcio could continue to be attractive and maintain positive investment projections for the coming years, according to the investment fund Valor Capital Group, specialized in this sector.

The projections hold despite the global drop in fintech investment, which fell from $62.3 billion in the second half of 2023 to $51.9 billion in the first half of 2024, according to figures reported by the consulting firm KPMG.

“It is important to highlight that the fintech sector has great growth potential. We see that investors looking for new opportunities do so with a long-term vision, generally five to seven years. It is common to face geopolitical or economic tensions in emerging markets such as Mexico, Brazil and Latin America in general,” said Fabiana Scionti, investment associate at Valor Capital Group.

According to Scionti, the focus in 2024 was on large rounds of financing. However, he stressed that the ecosystem is showing maturity, especially in early-stage fintech investments.

The fund partner pointed out that in Mexico, approximately 80 investments were made in startups in 2024, of which almost 25% belong to the fintech sector, which shows that a significant proportion of capital continues to be allocated to this industry.

“The investment volume we have seen, both in terms of the size of the rounds and the companies financed, has decreased. This is because investment funds are being more selective, focusing on companies with greater growth potential, the ability to scale globally and that also present solid evaluations and positive metrics,” said Scionti.

Larger investments in the fintech sector

In this context, Endeavor’s Venture Capital and Growth Equity in Latam 2024 report revealed that during the first half of 2024, investments in fintech focused on mature-stage companies looking to expand further. In addition, the study highlighted that 2024 represented a turning point for venture capital investments in Latin America with a total of $1.1 billion raised, an annual increase of 30 percent.

In Mexico, the report identified a significant increase in Series A investment rounds, which managed to raise 56% of total capital during the first quarter of the year.

KPMG, for its part, noted in its report that the number of agreements made in the same period rose from 2,287 in 2023 to 2,255 in 2024. However, during this period, five fintech agreements worth more than $1 billion were made worldwide.

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(Featured image by Adeolu Eletu via Unsplash)

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First published in EL ECONOMISTA. A third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

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