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Aug 17, 2025
LatAm's Own Identity: Embedded Fintech
Finally, LatAm is moving beyond copying foreign playbooks word for word...
We're starting to understand ourselves and our own markets better. For years, we adopted strategies and tactics from other regions, expecting them to replicate the same results here. But as our ecosystem has matured, we're realizing something: our markets have their own personality.
For example, the Product-Market Fit threshold is much higher for pure SaaS — particularly in SMB and Mid-market. Customers need a much more critical problem to justify paying month after month. The severity of the problem — whether it's a vitamin or a painkiller — is even more key in our region.
This is where "embedded finance" comes in.
Embedded finance isn't just a way to upsell to SaaS customers who already achieved PMF with paid subscriptions, but it can create PMF by itself. PMF, then, isn't just about the product, but about how you monetize it.
And LatAm has all the ingredients for embedded finance solutions to thrive:
Traditional underwriting is complicated: Now SaaS companies can use their own data to better predict creditworthiness and payment capacity.
It turns operations into collateral: Deeply integrating into client operations commits their processes as payment guarantee.
Credit is scarce and margins are wide: There's plenty of room to capture and deliver financial value.
It's perceived as a benefit: Embedded finance doesn't sound like a "cost" but like an "improvement." It's a much more natural pitch.
It's a counter-position to traditional banks: Incumbents are too big and horizontal, with no incentives to reduce margins or serve underserved markets.
Unlike passing trends, the industry in LatAm continues growing and consolidating. In the next five years, projected growth is 28.6% CAGR, reaching $34.50B by 2029.
The Vertical SaaS + embedded finance playbook is becoming increasingly common, and not just in credit, but across a variety of financial products. This includes payfacs (software over payment processing + fee sharing with acquiring banks), factoring, payroll advances, and of course, insurance.
And the timing couldn't be better.
A few years ago, fintech infrastructure wasn't ready. Now, we're seeing serious advances in open banking, APIs, and local regulations. The trend is clear: credit is decentralizing, allowing SaaS companies to become the most efficient originators.
SaaS then becomes not their monetizable product, but their main acquisition strategy (lead magnet), origination (data), retention and collection (operation).
How do you see this shift in your vertical?
