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January 19, 2021 in Fintech, Latin America

Startups Supporting Informal Workers Across Latin America

Previewing our upcoming report: The State of Financial Health Startups in Latin America
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The crises of the past few months have exacerbated inequality in Latin America and done harm to people’s financial health. But entrepreneurs are stepping up with tech-driven solutions. This is the third and last in a series that will explore what’s coming next in financial health innovation in the region.

At the end of 2020, hundreds of Mexican museum employees, many of them contractors with no job benefits, went on strike because they had not received their salaries since the previous October. Uncertain if they were going to have a job in the new year, they protested outside major museums such as the Museo de Antropología, demanding a new, full time contract that would provide access to health benefits. 

More than half of people in Latin America are considered informal workers, which means they lack a formal contract or benefits like health care or pension coverage. This enormous population has been particularly exposed during the coronavirus pandemic – without a safety net they struggle to pay healthcare costs, and without a contract they suffer from income volatility as their employer can change their conditions without penalty.

This is the third and final blog post of a series that previews our upcoming report The State of Financial Health Startups in Latin America. The report will highlight a growing wave of fintech startups in Latin America that are democratizing access to financial services: taking financial products and services once reserved for the elite and making them more accessible and affordable for everyday people.

Below we’ll preview the final section of the report, on tech for informal workers: tech-driven tools and services that are improving the financial health of informal workers across Latin America.


For five years, Nicolás Rojas worked for a Colombian company that connected  influencers and brands across Latin America. To his surprise, many of the influencers he worked with were classified as freelancers, and as such, often didn't receive payment for work that was completed until 90 days later. As Rojas would later discover, this delay left his clients in a bind for much-needed cash.

Rojas co-founded Factcil to help solve this problem. Factcil provides freelancers and the self-employed with liquidity to pay their invoices while they are awaiting payment for work, as a way to reduce income volatility. To date, the company has gained significant traction in Colombia, where roughly 45% of the country’s population works independently.

Factcil is one of a number of startups that are working to reduce income volatility. Brazilian startup Facio offers a corporate benefit that loans to employees by linking to their employer’s system and discounting the debt from their future payments. ePesos, in Mexico, provides employees immediate access to their payrolls without charging anything to businesses owners.

Other startups are working to provide informal workers access to the affordable, comprehensive benefits that often come with full-time employment. Mexico-based Heru provides a package of software products aimed at delivery drivers, helping provide insurance, credit and tax preparation support. Founded by ex-Uber employees Mateo Jaramillo and Stiven Rodríguez Sánchez, Heru soft launched last month in Mexico City with around 1,200 users, with another 20,000 in line to use the platform in the new year. At the end of 2020, they closed a $1.2 million seed round to support informal workers more broadly in Latin America. 

Still other startups are working to provide freelancers with greater access to jobs. Argentina-based Workana is a marketplace for temporary hires across the region with more than 3.2 million registered workers on their platform, a number that has significantly increased since the start of the pandemic. Their platform has proven so useful that they’re also matching talent with new opportunities in Southeast Asia, and just recently raised $12 million to continue to expand operations outside of Latin America.

Over half of all informal workers in Latin America earn between $5-13 dollars per day. Without a formal contract or access to benefits, most of them find it difficult to make ends meet, let alone save for the future. Startups in the region are using burgeoning technology to help this vulnerable, but growing, workforce access wages in realtime to cover expenses and provide affordable insurance. As the region starts to emerge from the impacts of the pandemic in 2021, impact investors should keep a close eye on this growing sector.

Sign up here if you’d like to receive our report, The State of Financial Health Startups in Latin America, upon its release. The report draws on knowledge from Village Capital’s Finance Forward accelerators. 

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