Colombia is famous for its salsa dance, its coffee and is considered one of the happiest countries in the world. Some weeks ago, it was also recognized as one of the fintech entrepreneurship hubs in Latin America. Indeed, Colombia has recently worked to build a technological and innovative environment to boost the creation of startups and of course fintech.
The country has a solid economy with a growth above 3% for 2015 and a better estimation for 2016. By 2015, it became the 4th largest economy in Latin America. Some years ago, the government decided to invest in developing the technology and innovation sector, setting up the country as one of the region’s strongest. The ambition is high with challenging goals. By 2018, the government expects to have 63% of the country connected to broadband. And according to 2015 GSMA figures, out of a population of 48.6 million people, there are 26.1 million users of internet in the country and 51 million mobile connections. Tom Phillips, Chief Regulatory Officer from GSMA, states that Colombia is one of the fastest growing mobile markets in Latin America. The Colombian government has also launched the “Vive Digital” program to make internet accessible to the poorer households. As part of this program they developed the App.co program to build an entrepreneurial ecosystem in the country. App.co has already taught 50,000 people how to code. For 2018, it is planned to reach 90,000 people. In 2010, 10% of small companies had access to internet. In 2015, 60.6% of small companies do online transactions for their business (source datexco). Moreover, several private and governmental organizations emerged to educate and provide support to Colombian entrepreneurs, as for example Innpulsa, RutaN, la corporacion Colombia digital. The effort has paid and Colombia was considered by the world economic forum as one of the leaders on entrepreneurial ambition and innovation.
Big companies contribute to the entrepreneurial and innovative development of the country too. Talking about Fintech, BBVA Bank is one of the most active actors in the ecosystem. The Spanish bank has opened its first center of innovation in Bogota. This space presents the last innovations of the bank in technology and also organizes opened events related to entrepreneurship and digital technology. The bank is an unconditional worldwide supporter of fintechs. Every year, the BBVA organizes the BBVA open talent in three parts of the world: Latin and Central America, Europe and North America. This is a competition where the bank looks for innovative projects, products or beta-versions related to Financial Services (i.e. Big Data, security, e-commerce…). The winners participate in a 2 weeks program to meet high net worth people from technology and finance and executives of the bank. The goal is to start developing a project with the bank where both parts are winners. In the last edition, 180,000 euros were distributed among the 6 winners. In the South and Central America 2015 session, there were 196 participants and Colombia was the most represented country with 57 applications. For more information about the 2016 session, please click here.
On February 16th 2016, the Finnosummit event occurred in Bogota to discuss about Fintech in Latam. The main topics discussed during the event were Fintech opportunities and innovation, financial inclusion, blockchain and regulation. The Finnosummit event is organized by Finnovista, an international organization that accelerates the development of startups focused on digital financial services and empowers the fintech ecosystem worldwide. 260 people attended the event gathering entrepreneurs, investors, financial entities, consultants and organizations of development from all Latin America. During the conference, the Finnosummit challenge took place: a pitch competition among 9 fintechs previously selected by Finnovista. The winners were Aflore and Alegra. Let’s keep them in mind because they promise to be great actors in the Latin American ecosystem.
Aflore: is a different type of financial services company. It makes loans accessible to the unbanked middle class through a network of informal financial advisors who people already know and trust. The contact between the lenders and the borrowers is performed through a technological platform. The company has already been awarded with several local and international prizes.
Alegra: is a software for small and medium companies to manage their accounting and invoicing through the cloud. The purpose of the startup is to beneficiate the small companies to take control of their finances. The startup is already present in Chile, Peru and Ecuador and they plan to reach other Latin American countries and the US soon.
Colombia had some exit stories too and the one in Fintech is Pagosonline.com. This startup is the Paypal of Colombia, leading the electronic payment service in the region. In 2011, the company was acquired by the multinational group Naspers, one of the major global players in electronic commerce and owner of a worldwide network of online payments platform called Payu Group. PagosOnline became Payu Latam and is planned to be the largest payment platform in Latin America (already present in Mexico, Peru, Brazil, Chile, Argentina, Panama and Colombia).
There are several activities of Fintech happening soon in Bogota, stay tuned:
- On March 2nd 2016, there will be a conference about blockchain and digital transformation led by Digital Bank at Hotel Cosmos Bogota. For more information, please click here.
- On March 3rd 2016, the Innovation Center of BBVA is organizing a tour with the Ministry of Innovation and technology, where the bank will share with the attendants its digital strategy and his work with the fintechs. For more information, please click here.
- On May 25th 2016, Digital Bank Latam will organize the annual fintech meeting, where more than 300 attendants will discuss about the latest innovation in Latam on technology, payments and financial services. For more information, please click here.
The government, banks and private organizations have a clear goal: to boost innovation and fintech for everybody in the country. Today, 35% of the adult population in Colombia is unbanked and all the actors are working to reach them, not just investing in knowledge and knowhow but also in infrastructure.
New projects are now focused on identifying local and international investors and convincing VCs and seeds investors to settle in the country. Colombian startups have a lot of potential because they do act local but they become Latino American actors very quickly. Why not become global too?
Gabriel Garcia Marquez, famous Colombian writer said “It always amuses me that the biggest praise for my work comes for the imagination, while the truth is that there’s not a single line in all my work that does not have a basis in reality. The problem is that Caribbean reality resembles to wildest imagination”.
From the wildest imagination, we can certainly expect disruptive ideas. With so many initiatives going on, the Colombian fintech cannot disappoint us. Colombia seems ready to defend a leadership position in the Latin American Fintech arena.