Miami - Where LATAM Fintech Startups Go Global | Silicon Valley Bank (2024)

“Thinking of moving to Miami? DMme”

MayorFrancis Suarez’siconictweet and billboard campaign aimed at attractingstartupsand tech workers – follows thespirit that earnedMiamiits nickname“theMagic City”.Injust over 100 yearsan internationalbusinessand cultural hubhas emerged on the southern tip of Florida.More than just a resortdestination with balmy beaches,Brickell, Miami’sfinancial district – dubbed the“Wall Street of the South” – has long been flush withinternational banks, hedge funds and big tech,duetoFlorida’s business-friendly regulatory environmentandstrongties toLatin America (LATAM).In the past fewmonths,Miami has beenreferred to as“SiliconBeach”,but history shows thatMiami’s tech legacyrunsdeep into its past anddeservesitsown spotlight.

Source: SF Gate

In the 1980sand ’90sIBM,Terremark,MotorolaandAlienwarebuilt data centers andPCmanufacturingfacilitiesin Miami,laying the foundation fora base of tech talent to germinate.The startup scenebegan to takeshape in 2012 when theKnight Foundationembarked on along-termcommitment to nurture the localinnovationeconomy.Almosta decadein,nearly 2,000startupshave raised$18 billion. Coworking spaces,virtual communities(likeRefresh Miami),incubators,coding bootcamps andhomegrownconferences (likeeMerge Americas and Bitcoin 2021)providestartups withthe resources needed tothrive.

In December 2020DelianAsparouhov, a principal at Founders Fund,tweeted“ok guys hear me out, what if we moveSiliconValley toMiami.”MayorFrancis Suarez,replied“How can I help?”The exchange went viral. KeithRaboisof Founders Fundannounced his move and many othersfollowedsuit.Analysis oftweets conducted bymoveBuddahfor the period showed a spikein Miami mentions,butwasitjust social media chatter orwere peoplemoving?From December 2020 to January 2021, Miami saw a net migration increase of 145%, while the Bay Area saw a 47.2% net migration decrease.COVID-19 had untethered workers from America’s traditional innovation hubs,with New York and the BayArea being the top twodeparture points for newMiamiarrivals.

Twitter Usage of“Miami Move”Phrases

Source:moveBuddah

Miami’sfundraisingheatsup

Prior to the influx of new residents and firms, Miamihad already seena boom in venture capital invested in startups.Investments by VCs in the Miami area surpassed $2 billion in both 2018 and 2019. After a slight dip in 2020(experienced by most geographies due tothe fallout from theCOVID-19pandemic),thecitycame roaring backwithH12021surpassing$3 billionin venture capital raised.

Fintech companies were mainly the beneficiaries from this investment in 2021. Pipe a revenue marketplace specializing in pairing SaaS companies with investors wasfounded in 2019 and subsequently raised $250 million at a $2 billion valuationin March 2021, cementing its status as Florida’s firstfintech unicorn. Founders and team members relocated from SF and LA in 2020 citing how easy it was to work with Europe and Latin America on eastern standard time, plentiful international direct flights from Miami and Fort Lauderdale Airport, and moreaffordable residential and commercial real estate in walkable neighborhoods.

Miami VC Deals and Capital Invested 2012-2021 YTD

Notes: Data for 2021 as of 10/1/2021.
Source:Pitchbook and SVB Analysis.

Miami is a gateway to Latin Americawhosestartup ecosystemis thriving thanks to a virtuous cycle ofcapital, quality entrepreneurs andsuccessful startups. The regionsaw fintech investment accelerate in 2020 and is on pace to set a record in 2021(check out ourblog on the topic).

InSeptember,Softbankannounced afollow-up$3 billionLatin America Fund II,building on their $5 billionLatin America Fundthatwas launchedin 2019.The fund will operate out ofMiami, SãoPauloand Mexico City. Softbank also has additional initiatives in Miami including a $100 million Miami Initiativeand a$100 millionOpportunityFund forBlack,Latinx and Native American founders.Ana Paula Gonzalez, Director for Softbank’s Miami Initiative,alongside Miami’s Venture Capitalist in Residence, MelissaKrinzman,host Miami Startup Mornings, a programthat letstech founders ask local investors their most critical growth questions.

Satellites Beam From Miami

Source: Everaldo Coelho, Unsplash.com

Since 2020, asset management firms such as Goldman Sachs, Citadel Securitiesand Balyasny Asset Management have set up satellite offices in Miami. This presence of larger firms within the region will bring direct access to capital andtalent for more startups.For newarrivalslookingto break into the investor scene,Miami Angels,anetworkof over 150 angel investors, also provides a great starting point. Forearly-stagecompaniesMiami is home to several world class incubators.TheVentureCity – one of thetop-ratedincubators in Miami – has teams in São Paulo, Madrid, Barcelona and San Francisco.Theystand out because they’re female-founded and focus primarily ongeographically diverse companies andunderrepresentedentrepreneurs.500Global, a San Francisco based incubator, has opened an office inMiami andis set tohost its popularPreMoneyconference in the city on December 1, 2021.The Florida International University’s School of Computing andInformationScience, which runs one of thelargest computerscienceprograms in the US, has its own incubator – called StartUPFIU – to support students and local communityentrepreneurs build businesses.

Brickellbeyondborders: Miami’sLATAMconnection

Miami is the perfectstaging groundfor companies looking to establish a presenceor expand into LATAM’s boomingfintechmarket with flight times ranging from three and a half hours from Bogota and Mexico Cityto eight and a half hoursfrom São Paulo.Latin America currently has over 450 million active internet userscompared to 240 million bank account holders. This has provided an ideal breeding ground for over 20 fintech unicorns to emerge and tackle critical market gaps in financial services. Atlantico’sLatin America Digital Reportshowsthat tech is a growing part of LatinAmerica’seconomy – with fintech being a major catalyst, capturing 40% of VC capital investment in the region.

AtlanticoDigital Transformation Index, Q3 2021

Source:Atlantico

Miami-basedNovoPaymentpartnerswith Visa (with the latter also playing role as an investor)toenabledigital payment processing inLatin America and the Caribbean.Crypto currencies have become verypopularin LATAM,with regulatorsand established banksbeing increasinglywilling to experiment with digital currencies.Similarly,Miami hasbeen a fertile ground for the crypto industry. In September 2021the cityaccepted $4.3 millionraised byMiamiCointokens. The city plans to use the funds on infrastructure, policing and helping people experiencing homelessness.Miami is alsoexploring paying city employeesin Bitcoin, accepting payments and taxes from residents in cryptocurrency and experimenting with use cases on the Ethereum blockchain in areas such as procurement and records management – Mayor Suarez, who won a reelection on November 2, announced he would accept his paycheck in Bitcoin.City commissioners voted 4-1 to study crypto payments and financial infrastructure for the city, but they expressed concerns of Bitcoin’s price volatility and links to cybercrime. Florida’s statutes do not allow local governments to hold cryptocurrency. Despite potential hurdles, these developments should not be ignored and instead celebrated as a sign of the city’s forward-looking stance.

Miami Sight Seeing Tour– The Startup Edition

• Miami Startup Mornings– Wake up tocoffee and conversation witha small group of local founders and investors.
• Refresh Miami –Plug into this startupcommunitynetwork ofover13,000members as well as theirworkshops and startup news.
• The Launch Pad– Schedule a meeting with a mentor at the Universityof Miami’s Startup Resource Center.
• University of Miami (UM) Startup Practicum –Do things by the book with free legal help for startups offered by UM Law
• Miami Angels –Pitch for one of their monthly pitchnights.
• Tax Benefits –Take a scroll thoughMiami Dade County’slocal and state tax incentive program.
• Followthe Map for more!

SVB in Miami.DM us.

SVB has been banking companies and funds in LATAM since 2012.Today we bank 75% of all tech startups that have raised venture capital in USD as well as most of the funds.If you are a startup in Miami or the LATAM region and would like to learn more about howSVB’sStartup Bankingofferingscan help you achieve your goals,or would like to reach out to us directly,please contactmiamistartups@svb.com.