QED Investors announced it closed a $12 million network-driven fund to support seed and pre-seed fintech startups in Latin America.
“It is clear there is a massive gap in the market for pre-seed and seed investments throughout Latin America”
Named Fontes, the Latin word for fountains, the fund will expand QED’s reach across geographies, business models and teams.
Commitments to Fontes come largely from QED’s deep network within Latin America – including numerous founders and management of some of the region’s most renowned fintech companies. These investors have deep roots within the fintech ecosystem and will play a vital role in cultivating and supporting the next generation of fintech entrepreneurs.
“In the years since QED’s inception, we have seen the explosion of the fintech ecosystem in LatAm, and we know it’s only the beginning,” said Bill Cilluffo, QED Partner and Head of International Investments. “In a rapidly changing ecosystem, Fontes will allow us to broaden our focus and identify high-potential opportunities early on while supporting the next generation of talented entrepreneurs.”
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Fontes investments will be supported by QED partners and prominent local entrepreneurs, allowing Fontes founders the opportunity to tap into a wealth of on-the-ground- knowledge, expertise and resources. Founders will also benefit from QED’s broader portfolio resources and community while building relationships with its team of operators from the start. Fontes will invest across the Latin America geography in strong founding teams that are working with a fintech element in the business model.
As part of the launch, QED will host a virtual panel discussion in partnership with Finnovista on Thursday, May 13, at 11 a.m. ET. The panel – Getting it Right: Building Blocks to Get Your Fintech off the Ground in Latin America – will feature QED Principal and head of the Fontes program Ana Cristina Gadala-Maria, Worky Co-Founder and CEO Maya Dadoo, and Kavak Founder and CEO Carlos Garcia. The panel will be introduced by QED Co-Founder and Managing Partner Nigel Morris and moderated by Finnovista Managing Partner Andres Fontao.
“It is clear there is a massive gap in the market for pre-seed and seed investments throughout Latin America,” said Nigel Morris. “Since QED made its first investment in the region in Nubank in 2015, the ecosystem has flourished. QED via Fontes can serve to accelerate and promote disruptive business formation through this platform.
“We’re excited to extend QED’s substantial track record in Latin America fintech while also leveraging QED’s global experience.”
Historically, the financial services sector in Latin America has been concentrated around a handful of big banks with a large market share. Innovation has suffered as a result, leaving huge numbers of the population unbanked and underserved. These banks are primarily branch-based in a world of rapid digital adoption. Fontes will reduce this friction in financial products and services, democratizing the access of financial services and untapping the market opportunity.
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“Digital transformation is rapidly reaching threshold scale and we’re seeing new business models ready to thrive,” said Ana Cristina Gadala-Maria. “There is so much talent waiting to be unleashed.
“There are opportunities from banking infrastructure to digital payments to embedded financial services. As more of the rails come together to allow people to build products in different ways that don’t depend on the big banks or the traditional financial service providers, that’s when it becomes incredibly exciting.”
QED has invested in many successful companies in Latin America, including Nubank, Creditas, QuintoAndar, Loft, Kavak, Konfio and Bitso. Notable global QED investments include Credit Karma, ClearScore, SoFi, Avant, Remitly, GreenSky, Klarna, AvidXchange, Current and Mission Lane.
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