Chilean finance platform Racional, which offers automated investment management, announced the raising of a $2 million investment by Genesis Ventures and Amarena funds. The company’s main objective is to use this investment to grow in the Brazilian and Colombian markets.
In addition, with this capital injection, the fintech will seek to double its team in the short term and reach 100,000 users in Chile, Brazil, and Colombia within 12 to 18 months.
Racional was founded by Boris Garafulic in early 2020 and began operations by offering customized ETFs.
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DeFi platform with a social touch
According to Boris Garafulic, founder and CEO of the company, the team at Racional has been looking closely at the world of decentralized finance (or DeFi) for months. It is working on becoming a social money app — an initiative that, for the company’s executive, blends community with investments.
“One of the cores towards the future is to connect users and for the different communities to learn from each other. That’s why we’ve been adding elements of social investing,” Garafulic said in a recent statement.
A little over a year ago, Betterfly, the unicorn founded by Eduardo Della Maggiora, acquired 20% of Racional’s shares. At that time, the fintech moved to moderately change its product strategy and included Eduardo Rodriguez, from Butterfly, as its CFO.
Steady growth and crypto immersion
The Chilean platform’s foray into the crypto world began in 2021 with Racional Stocks, a product that allows buying shares on US stock.
Despite market conditions — considering that earlier this year, startups saw a halt in DeFi’s fintech investments in Latin America —during the second half of 2022, Racional continued to grow in size.
Now the company sees a favorable environment for growth in LatAm and recently reached its goal of 45 thousand users, with a 60% increase in assets invested by the platform compared to the previous year.
The fintech industry is experiencing a positive moment in Chile and the region. In addition to achieving growth figures in their respective countries, several leading players are undergoing solid international expansion.
According to the “Fintech Expectations Survey 2022”, conducted in August this year by FinteChile, 75.8% of the companies surveyed plan to make investments in the next six months, and 79% are considering expanding their business to other countries.
A favorable scenario for fintechs in Chile
In Chile, a fintech law was recently approved. According to specialists, the approval of this legislation initiated a period of fostering a scenario that promotes new technologies, creates a system of available finance, and establishes a regulatory framework for technology-based financial services.
With this, they began to facilitate the activities of fintechs, fundraising, the establishment of guarantees, and the participation of qualified entities, in addition to making it possible for traditional banks to share information based on APIs, as well as maintaining web scraping strategies for Open Banking.
According to the report “Agenda Fintech Rumbo a 2025”, by Finnovista and Mercado Pago, in 2021, 991 venture capital investments were made to Latin American fintech companies for a total value of approximately US$7.8 billion. By 2022, three out of four funding rounds went to seed-stage companies, forecasting a second wave of follow-on investments by mid-2023.