Fintech in Mexico - statistics & facts
In spite of initial excitement surrounding fintech, a more subdued narrative emerges: fintech’s once rapid growth appears to be slowing down, evidenced by a significant decrease in investment activity. Mexico, a country that has witnessed steady growth in the sector over the past decade, is not exempt from this trend. Between 2021 and 2023, fintech investment value dropped by almost 75 percent.
Despite the decline in investment activity in the last two years, the fintech sector in Mexico continued to expand. In 2023, there were 773 fintech companies in the country, over a hundred more than in the previous year.
Looking ahead, it can be expected that many fintech firms in Mexico will prioritize scaling and international expansion in the coming years, while also increasingly integrate AI into their operations.
Despite the decline in investment activity in the last two years, the fintech sector in Mexico continued to expand. In 2023, there were 773 fintech companies in the country, over a hundred more than in the previous year.
Diverse landscape: market dynamics and segments
Pinning down a precise definition of fintech is not an easy task because of the segmentations within the industry. Online and mobile banking, digital payments, cryptocurrency, blockchain, insurtech, wealthtech, and artificial intelligence all classify as fintech, as they combine innovation in the financial industry with technology. In Mexico, the lending segment of the fintech industry made up the biggest market share in 2023, with 25 percent of local fintechs operating in this area. Although the digital banking segment only represented four percent of the market, the number of digital banks increased steadily in the last six years, from five in 2018 to 29 in 2023.Revenue trends: big players stand out amid modest earnings
While the majority of fintechs in the country reported modest annual revenues in 2023, some of the leading fintech companies, such as Konfio and Covalto, raised over 500 million U.S. dollars. In terms of revenue generation, almost 80 percent of all fintechs in the country reported an annual revenue of less than five million U.S. dollars, with 38 percent of them reporting an annual revenue of less than 500,000 U.S. dollars. These disparities underscore the evolving landscape and potential growth opportunities within Mexico's fintech sector.Challenges and trends
Despite the declining investment sentiment in recent years and the moderate annual revenues, access to financing was not perceived as the main challenge for fintechs in Mexico. Instead, over half of the fintechs identified scaling up operations and internationalization as the primary challenges for their respective businesses. In terms of ongoing trends, there is a noticeable increase in the adoption of artificial intelligence (AI) and machine learning (ML) within the industry.Looking ahead, it can be expected that many fintech firms in Mexico will prioritize scaling and international expansion in the coming years, while also increasingly integrate AI into their operations.
