Four financial companies have banded together in search of Latin American fintech startups that can help more people in the region begin using bank services and financial products, which continue to have a low penetration rate in many locations throughout the hemisphere.
The initiative, “Village Capital FinTech: Latin America 2017,” is primarily a collaboration between Village Capital and PayPal, which will select up to 15 fintech companies to enter a three-month training and capital-raising program. There will be at least three workshops for those selected, including one in Mexico in November, and the two highest-performing startups, as judged by their peers, will receive investments of at least $75,000 USD from VilCap Investments.
New York-based BlackRock and Citibanamex of Mexico will also participate by providing resources and consultation to the included companies chosen from the pool of applicants throughout the region. The program has put a specific focus on entrepreneurs from Colombia, Mexico, Argentina, and Chile, requiring applicants to have at least one full-time employee working in one of the four countries.
The application period began in late May and will remain open through June 23. “The Village Capital FinTech: Latin America 2017 invitation is looking for entrepreneurs with personal experience in the development of scalable companies which will democratize the access to financial services for unattended people and small and medium enterprises,” said Village Capital in a statement.
Specifically, Village Capital says it is looking for fintech entrepreneurs who have developed solutions centered around the following objectives:
- Develop user-friendly products and services that align with needs of the underbanked and small and medium-sized business in the Mexican context
- Innovate in credit scoring to enable affordable access to credit
- Reliably authenticate user identity, such as through blockchain, biometrics, behavioral data, and open networks
- Increase financial literacy and provide incentives for cash-centric consumers to adopt traditional and digital financial services
- Improve distribution channel infrastructure, enabling financial institutions to affordably and efficiently serve rural and urban unbanked populations
While the program has operated in Mexico previously, with editions in both 2015 and 2016, and invested in more than 70 early-stage companies overall through this model including the startup ePesos, this is the first edition to stretch throughout Latin America. “We have found excellent fintech entrepreneurs all over Latin America, and we are very enthusiastic about taking our program beyond Mexico for the first time,” said Ross Baird, founder of Village Capital.
The two Village Capital programs in Mexico in 2015 and 2016 programs led to more than $175,000 USD in investments and created nearly 200 jobs, according to Village Capital. “Through our program in Latin America, we are pleased to help to construct a support ecosystem for fintech with social impact,” said Franz Paasche, vice president of corporative affairs at PayPal.