Midway through 2024, Mike Packer, a partner at fintech-focused QED Investors, predicted we’d already hit the bottom for funding to Latin American fintech startups and that a bounce-back was coming. While momentum hasn’t been a straight shot up and to the right ever since, it’s looking like he was right.

The volume of venture capital dollars invested into fintech companies based in LatAm has already surpassed 2023 with another month left in the year. So far in 2024, $2.6 billion has been invested across 174 deals, according to PitchBook data. This compares to the $1.5 billion invested across 241 deals in 2023. While these aren’t huge totals, 2024 has already seen a 73% increase in funding volume compared to 2023.

This year’s total so far still pales in comparison to 2021, when $7.5 billion was invested, and 2022, when $4.3 billion was invested. But these numbers show that the market is starting to turn around.

“At a conference in May, I was speaking to some of our seed founders and said, ‘I’m going to call this as the bottom of LatAm equity funding,'” Packer told TechCrunch. “I knew a bunch of deals in the pipeline, it seems like we are off the bottom.”

The momentum swing can be seen anecdotally as well as interesting fintech deals have been closing in LatAm all year.

São Paulo-based Conta Simples raised a $41.5 million Series B led by Base10 in January for its expense management and corporate card software. In May, Félix Pago raised $15.5 million to help Latino workers send money to family in LatAm. Brazilian AI fintech Magie raised $4 million in a round led by Lux Capital. It was Lux’s first investment into Brazil.

Packer said that we’re likely seeing a resurgence in deals for two reasons. One being that LatAm fintech companies that raised in the hype of 2021 are just resurfacing now to raise their next round — for better or for worse, he added. But it isn’t just companies running out of runway. He added that his firm is also seeing fintech companies in their portfolio hitting milestones and ready to head back out to reach their next level of growth.

“You had companies that were starting to get profitable, and were reaching interesting scale at the beginning of this year,” Packer said. “We thought deal volume was going to pick up in terms of quality and quantity.”

While Nicolas Szekasy, a co-founder and managing partner at São Paulo-based Kaszek Ventures, said he isn’t sure he’s noticed too much of a difference in LatAm’s fintech market this year compared to prior, he agreed with Packer that the change in quality of startups looking to raise has been noticeable.

Szekasy added that the first wave of fintech in the region was consumer focused but now they are seeing seasoned entrepreneurs building infrastructure businesses. He added that it’s good they are seeing an influx of quality founders because when compared to the fintech markets in the U.S. and Europe, LatAm still needs a lot of innovation.

“Financial services you would take for granted in the U.S. or more developed markets are very immature in the region,” he said.

Even if the market does continue to gain momentum, it won’t be without headwinds. There hasn’t been a substantial number of exits in the region yet. Nubank’s 2021 IPO is the most prominent, which valued the neobank at $41 billion at the time. There haven’t been any large exits since. Packer added that Mexico, one of the region’s most developed ecosystems, still doesn’t have a single sizable exit.

Plus, the majority of the funding to fintech companies in LatAm still comes from local funds or firms focused on the region, Packer and Szekasy said. While the volume of local funds is growing, this still presents a limiting factor for startups looking to raise.

“I believe the region is underfunded coming out of the [post] 2021 correction,” Packer said. “We need more investors to look at LatAm as a global opportunity and need entrepreneurs to believe that they can make a difference and change things.”