Latin America: A Tech Powerhouse?
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There is eighty percent smart phone penetration and I think about twenty .

percent product card penetration of some more globe as more today.

companies go global increasingly fast from day one. But banking the sole country in currency specific.

we're going to see the mozilla able companies in the region being technology companies.

There's no way to build in resistance unless you're in result .

requires a totally different mindset when IT comes to product development.

Hello everyone, welcome back to the asic gene pocket now if you've been listening over the last few weeks, hopefully followed our olympic series so far, you've learned how olympian alive eman has diverse the transition from Jamie to investor, but also you've explored how few technologies actually with the needle in athens. And also we've accepted the forces behind the ongoing competition for talent across both france and the U. K.

Now if you've miss those episodes, of course, be sure to go back and give them a listen. But today we keep up series by turning our attention to latin america. Will explore why the region has long been overlooked despite a highly proficient technical savi internet penetrated population, plus the royal regulation has played as a tail in the nuanced of recruiting in the region.

And much more, our guests today are all investing in law amErica in their own way. First up to leave. Thus mm thunder and CEO of gives a financial platform for global startups, which Operates in over twenty countries, which is recently expanded its presence in law america.

Next week, santiago for us, the cofounder and CEO of add a columban by now, pay later tech with over two million quiet. We also have Gabriel vast investment partner, asic gene, where is focused on enterprise vintage investment, of course, in land america. And this conversation was moderated by basic scene y general partner Angela strange, who of course has also long investing in the region.

Alright, let's kick things off for santiago or santi, who reflects on the opportunity that drove him back to columbia, where he's originally from after years of working in financial services in the united states. As a reminder, the content here is for informational purposes only, should not be taken as legal, business tax or investment advice or be used to evaluate any investment or security, and is not directed at any investors or potential investors in any asic cancer fund. Please note that a six scenes year in eza, hili, az may also maintain investments in the companies discussed in this podcast. For more details, including a link to n investments, please see a extinct outcome slack disclosures.

The sense of duty, you know, i'm colombian. I've had the opportunity, see many incredible things in the U. S. World on companies to be more and machines. Some people started up, experience says.

So there was a little bit of being able to go back home and contribute to the local ecosystem that I think is fired me. And then the other thing you realize is that the americans, not china. So i'm not gonna be sitting here, but I go to the new china.

But IT was so overlook. You had tens of millions of people in a single country and everyone just thought was kind of fly over country or technology development. And then also realizing that he had a english profil technically sophisticated population, both in the consumer side but also, Frankly, on the call, IT supply of talent side.

That then let me to say that I should try move back and see what we could make happen. And in hindside, the show was used to see, like all, we had a master plan. There was a bake plan.

I wouldn't all IT a master plan, aster plan. But enough of an intuition that there was a big thing going. That's what I needed to get myself in a play and move back to obie.

Yeah, I think one of the stats that really struck me back when you start study was there was eighty percent smart phone penetration. I think about twenty percent credit card penetration. So just our real opportunity to bring what is fundamental access to being able to run small businesses, to run commerce to the country.

delete. You approached ln amErica from a different perspectives. Like jeff was started right off the bat with a very global ambition, but then lattin quickly became one of your biggest markets and have been interesting on the chiefs website is says that amErica is entering ing the golden age for tech.

So so we're basically building a global business bank. And the idea is that today companies go global increasingly fast from day one. But banking is still a country in currently specific s. So we provide corporate ds payments deposit, except al, for business banking account.

So when we look at a country or region to start IT, and there is usually about two or three things we look at, one is that a region that's opening up to intact? I think one of the things that's most exciting about that amErica was that there is a regulatory ory push to be more open towards pinch. I mean, you look at pigs in brazil.

It's just amazing what's been done in about three, four years. And so that's a pretty good indicator that you can build what like all banking two point or three I know on top of what's already in market. So that's the first one.

The second one, which I keeps saying, company like jeep's couldn't have been built really five, six years ago because there was infrastructure components like open banking that wasn't around five, six years ago. And again, if you look at lad, look at mexico, you look at brazil that at a level that's actually more sophisticated than a lot about the country, including some parts of you. And so that was very exciting.

And then the third one, which is very, very obvious, was where is the flow of capital going? And that also correlated with that. I M. And so for us, our first launch market as mexico till today is our biggest market, and it's also where we test any product that he loans. And so IT made IT very, very simple for us that brazil would follow mexico.

But mexico was the origination point and the gap, I think going back to what time you was talking about IT was very, very cleared. You've seen a version of what we're building. The us IT. Hadn't really scale internationally until we looked at this from the perspective, if you were building a global business and spending of the regency touch, lam was always going to be the coral where that would sit. And then two, does IT have the infrastructure that we need to be successful, which IT does.

That's a good tip for talking about the region overall. So gay, we've been investing in that ham for probably more than five years now. And I think of a lot of industry, actually, i've gotten excited about that time. So the seekers out, I think one of the arguments in the early days was, well, there's lots of opportunities to h investing companies closer to us, which obviously we do what drove the interest in the region back when I was little a bit .

less obvious .

and I talk about that, something that i'm incredible passion about. So to you're for in I think this is a question that companies like nova and got a lot when people were initially analyzing the opportunities special the early stages. No, life is now a fifty five billion martial public company.

And when you think about the winners in the region, you also have other players like merci, where that came before, but as of last week, actually became the most valuable company in latin america, finally surpassing petrobras. I think that is on a statement of the opportunity in latin amErica that eventually we're gonna see the most hello companies in the region being technology companies. We have examples of successful companies like stone, X, P, the local detest that.

All of them have I, O, and are in the public Marks for now. And at least to the second point, that is actually quite exciting, which is you have all this talent kind of being nurture, that a hard experience, that Operating a successful technology companies in the region. And I want to build their second or third company.

And i'll say the last point is there's a lot of opportunities when he comes to building in the america. There is slightly different from countries like the united states, where in nineteen america, there's opportunity to build super apps. The example that I usually like to use for this is a complicated taxi giro based out of brazil.

This company actually is a public company to start as a merchant acquire for micrometers ts in brazil. And they realized that a lot of the customers that they serve, they didn't have bank accounts. So they created a bank to serve this microbe chants.

Then they realized that a lot of the consumers I went to buy with products from this microbe chants didn't wanted to transaction on line. So they build a marketplace on top of IT. And they realized that these consumers also didn't have a backcomb.

So they eventually developed like a consumer bank. This company basically creative four different companies over the one. And I think that speaks of the opportunity of life in america. We see companies like rapped launch in a bank, or companies like now that have actually launched a marketplace. Es.

let's stick on the talent point for a bit, which I think is opportunity to chAllenge in every single market. Sani, you've built a world class talent team basing columbia, but you ve also recruit global employees. Have been the things have been admitted of in colombian. What have been maybe .

some of the chAllenges, things that are adding omb A A column, ian, you get to know the talent a little bit Better so you have that edge that you wouldn't have otherwise. It's small country, certain ly compared to mexico, brazil. So IT also allows you to plunge into the deep tone forms very quickly.

And probably the most obvious one is your an employer of choice. So we are for equity to everyone, single one of our colleagues from the call center Operators to storing sales folks all the way up to senior folks. That really allows you to get like your pick of the litter way comes to talents.

The chAllenging part is you don't have any executive experience and at some point, you need to baLance this. So what has work for us is kind of get the raw material here because you have very talented people and then sprinkled with extremely competent leadership. And by the way, some of these local folks eventually be coming years.

We're seeing some of them actually be transformational years of our company then that's because you pair them with product clears, with experience that a firm advice capture one. So for us, that has been the recipe for success. And I think you have to be creative when you're in that in america, for example, or remote company in large parts so we can attract these key foxing key positions. But that has worked really well. Get the raw talent, which there's a lot, and then pair them with the right, see some leadership to see the matic capet.

Would you say a little to gabs point? Five years ago, maybe the scale lahab companies didn't have as many seasons exact, but now those seasons executives are starting to come out of some of the large wilting billion dollar exits in latin because you don't necessarily have to go to the us.

I think so though I would say that still very much in the early beginnings, early beginnings in par because I think it's a medical system. Merkel vers are almost thirty year old company. So we have some great example folks.

But when they going male, male was a twenty year old company. And then it's to situations. I think some of there are reference cases a lot melly new and rapped.

Each has a very distinct way in which they build the culture. So you need to be very mindful of that because you get a lot more, let's say, executive variety than in the U S. I think if we went to A B, to b sab company in the U.

S, and you said, I want the E V P of product marketing. Seriously, you're going na get the same person. I know exactly what you're getting and you know exactly what you're not getting.

I think if you get the vive, your product marketing at meli, at arrah, I and that knew you're going to get three very different cats, none of who maybe the person you are looking for you because they are very dius incorrect c culture. So I think you just have to be very aware of that, that you don't get have this kind of standard in public. The region is a vary, right? So what works in our details doesn't work in brazil, doesn't in liba.

doesn't mexico makes a tension? So delete. Maybe if we built in columna, you've bought primarily in mexico, brazil and obviously other global regions. When you talk about the experience of scaling up and two countries are in the same continent, very different beyond yeah.

So the way our model works is we break up the functions depending on what touches the customer directly. And so usually the first higher in any region is a general manager and they tend to be fully local. I think there is no way to build in brazil unless you're in brazil le.

There is no way to really build in colombia maxton as your in colombia mexican. So that model has worked fairly well so far where anything that's customer facing is fully local. And then we build the product engineering finance sector are centrally.

What's changing now is as we get more into scale, they are actually starting to move some the product components also locally. And that is a little bit different from how IT was in the. By the way, we learned this also the hard way where you can sell.

But then if you need to collect and you call them from texas or result, they are like, i'm not picking up your phone. So you have to be a local. You have to be on the ground, you have to be collecting there as well.

So anything touching the customer has been fully local to that region. But we're learning now and we ve been in market out for about three years, is that even the product side at scale has very specific nuances that need local knowledge. And I think to the point gave was making now what's interesting, as you have folks, they are seen what good looks like.

The winner knew they're bin at mcadd. They know a version of what this looks like that's been really, really useful that we didn't have honestly been five, six years ago where you can hire someone that's build the product and leadership. I think I kind of agree, like you have to find the right person for the right culture fit.

And we have had some success. We've had some areas where are still working through, but you can find what I call a kind of inimal dia managers that are, I think, fairly consistent for the region. They know what payments looks like. They've seen IT that's scale theyve seen IT in a public lad I am company and .

that's been very, very helpful for us. You Operate in four, five es maybe languages. How do you manage to get smooth communication across the country? Do you hire for necessarily speaking more than one or using A I translation tools?

Yes, it's a good question because I really affects culture. And so one of the things that we try to do, as we have people that obviously locally are fully flowing to the local language, but you have to be able to communicate in english as well because you do have counterparts in U. K.

You do have counterparts in U. S. In canada, america, but everything that we do in region comes to be local. And IT even took costs about two years just to get the localize experience on the product.

Thank you. How you balancing spanishers english and recruiting employees our country. You are very talented, but might not be english, which then restrains the recruiting pool for sure.

We've always been extremely religious about the english speaking requirement. We are now testing a couple of instances, relaxing IT on using A I to figure this out out. I agree with you.

I agree with the leave that the biggest chAllenge here is culture, but we're actually even earring on the other side at this point. We have actually gone almost all native. So now you need see your approval to hire anyone.

That setting colombia, our single country focus know we we're gonna deep here. And and what we realized is that there are certain positions for which the expertise, always the local knowledge, most famous to credit, but prety much everywhere else. You want the person around, you want them using your product on any given day, you want them getting rejected, you want their APP crashing.

You want all these things that are extremely difficult to achieve if you're not on the ground. And also, we know so a broader swap and the collodion population, including a other people who don't speak english. So culturally, even just having people who speak english, your company, they may as well be from a different country, right? You just have a lot of people out in the procedure is a persistent building product from the ampara noted states with no real sense of what's happening and choose your favorite midd western state. So that also a lesson we have recently learned one .

year for those for city of product managers agreed, alright, I want to see me out a little bit. You guys are clearly building in financial is I think that there is a specific opportunity for a financial services in the region. And we even rode a post together entitled for brazil, which was that regulation is a tailwind or two words that you ve never hear in the same sentence in general. But in america, you sort of do so when you gave out line what's going on in the region there. That creates particularly interesting opportunity.

yes. So I think that there are three main areas. The first one, I think is less specific to the region, but more specific that the intake is a decal local business.

So there is a lot of local regulation that plays an an important role when he comes through Operating different countries. There's domestic frames cure that when you're thinking about building business in brazil or mexico, you can have to rely on. And there's also cultural nuances.

Brazil completely different from the rest of in amErica and even mexico completely different from south america. Even though all the countries speak spanishers ea brazil, brazil has actually been quite advanced. The central bank has done a great job basically disrupting the dual believe between the merchant requires that enable players like no one to come in and take advantage of that.

And then the rise of payment acquires like stone, and then they created open finance. And from they started the instant payment solution that now is the main payment method in brazil complex. One of the aspects is actually quite exciting as well as the smart of penetration tion is quite high in the region.

So the number three, between seventy, seventy percent. But when you look at the credit arbitration or even the bank population in countries like mexico and goes around fifty percent, which is quite low when you can create two countries like brazil ways, around eighty five percent. So there's a lot of opportunity still.

They basically can have a bank in their pocket. And when he comes to the size of the market that america, you know there's six hundred fifty million people living in, in the region, the gdpr capitas hired, especially you converse to other merger markets like india. So I think that those are the three main reasons why latin amErica has become such an important hub for film. Take innovation so .

great from the theses point of view. We have two people that are actually going through IT, starting maybe with you some thing. You've recently spends a lot of time with the columbian banking regulators.

Is the practicality the same as investors might perceive? And what advice might you have to other entrepreneurs? The region.

I would say, know that PK kell's. That always the same thing of the investors might see for many reasons, obviously, in at least of which this is still an emerging market. And I think when you do venture investing, you're taking two types of rest.

You're taking venture, rest, entertain, marking markets for. But that being said, I think the situation columbia is extremely magmatic, right? You've got a regulate position, life says, you've got a regulator pushing for financial solution, you've got a simple bank of striving instamatic tive famous adoption following very much the playbook of detail.

So if you're sitting here now or just ten years ago, I mean, when we started, I think they hadn't issued a single and noble banking license in, god knows, like a decade. And now the issue that we were for a year, similarly with the payment site, right, like with the payment system, be a little bit of a mess, but much of mass and IT was in or on track to watching takes in the next eighty months or so. So you do see a very problematic regulator, and honestly, in that case, very differentiates from the U. S.

Event, which is a bit more of you unknown, unknown, right? You just don't know what regulator the ida is. You want to have the feature of the F A C S C. And you can't quite through out where the boundaries are.

What I can tell a lot, lot time I saw like in the us where the boundaries are x, but then you're going to like interpret the he leaves on what actually x me here is pretty well define. So if you have the patience for dealing with the emerging market environ, you have the patience of dealing with the natural chAllenges have come from being side. The U. S. IT can be a very attracted the hunting ground and a very attracted the place to build the company.

I think touching on this point, actually, one of her big higher last year was getting the chief compliance officer from marketer is a public company to join us. And a big reason is exactly the switch as we scale from a smaller company in moving really fast to a bigger accompanying. The biggest thing that we started noticing was that we were much more on the reader for folks lutely.

And so brazil, so far, it's smaller for us as an Operation compared to mexico. But mexico, we have invested quite substantially even from a license SE perspective, but also from, let's call, IT light lobbying in terms of companies that we worked with the such as external law firms, right? And so it's come back once or twice where we've had, let just call, IT issues that we had to work through in mexico. And the one learning for me is and as to be scale. And as we get bigger, whenever you think you need to do IT, you should have done at six months before that.

You I think we are both hitting on is still and ownership regulatory process. But unlike in the U. S. In other regions is at least a relatively clear owners regular ory process such that if you put together a very strong team like you still need to recruit a plus compliance people, they still need to do a lot of work to get IT together, that the governments do be seem much more motivated to create competition in the regions. And in particular, like one of the stats often quoted, as you know, banks and brazil is a little bit different with new bank, but you're the bank in brazil, mexico climber serve the top twenty percent of the population and the rest are very start for good financial services. And one of the ways to solve that is to allow novel licences for new companies, tend to the regions and provide more innovative .

products they want to try to work with. New inference areas in the U. S. Isn't always like that. And i'm always surprised in a good way in terms of the companies that be kept to serve in mexico, brazil and IT goes back to the same point, which is most of the options are older banks.

When we in brazil, we had a customer that was coming close, me like k, the fact we have virtual cards, this is great. And for us, that's almost tables kes that we don't even sell that because we expect that to be just an offering in market. And so that's what I keep getting reminded about, which is, is still a huge monopoly. I think regulators do see that in a way that they do in the us.

Some to you touch this, I think one of the advantages of building in columbia is you do become the employer of choice. There's not fifteen I I competitors that employees are choosing between, but then you do run into different types .

of chAllenges. Pressing one is the mental lot of most investors around time. Remains very much what IT should be for about ninety five percent of companies. I think when you combine regal and financial services, the way you think about Thomas, probably a bit different.

I mean, I will tell you, even I have a long day I look at the performance of our company today verses where we expect that out of the climate market. I I got to think anyone would have that we became within five years, right? So I would say the first thing is your understanding of cam when you think of our columbia has is just very difficult.

And the other pieces your product development approach has to be very different because what you lose by not being in the U. S. Or in brazil, you gain by being able to go extremely the extreme, like workday.

But IT requires a totally different mindset when IT comes to product development, and, by way, photographs. The inspirations of choice are not in the U. S, are not in the U.

K. But aren't simple asia in turkey. These are the places where people have also figured out small country, deep time, in both massive, successful or comes. So when people ask us what you can inspire about, we always are our cast speeds of thirty billion dollars wer company that is single country focus in casa GDP, half of columbia.

So those are some of the things that you gotta start thinking about and also recognized that even the successful models we're built in a different paradigms. So robbie was built in a zero interest rates. Paratime ku was built that almost the euro company built and raised in a different world. So just knowing all of these things as a founder, our important period of our video, but certainly when your geography is not brazil, not mexico, so to speak yeah .

now in hinting on the point that gave made also is that the products can encompass so many more almost many companies that the results of being a lot bigger than you might think. If you just look at time, do I think one of the powers of jeeves that you've discovered as the strong need for that american companies to move money both from the U. S. Internet america, into other cords, that might be a little bit less obvious. But along with that comes with, I think, more than just one country regional chAllenges, but multiple regional chAllenges.

So one of the things that's interesting is everything we do is B2B. And there is obviously consumer components. And I would take most pin tex tend to focus on the consumer side, which is massive.

But B2B has ver y dif ferent pro blems tha t are als o ver y uni que to hel p bus inesses mov e mon ey and spe nd. And so just as an example, we launched the ability to move money out of mexico, colombia, brazil. One of the hardest things as if you move money out of colombia, you're usually gonna flag and you're not moving fifty hundred dollars, you moving fifty thousand or hundred thousand dollars.

And so part of every investment is how do you have the ability to move that in efficient way so that we can actually compete with local offerings in the region, right? And so it's one of those things. You have to invest a locked in compliance.

You have to invest a locked in Operational efficiencies. But IT is fairly untapped because it's so, so hard. I keeps saying this, but for me, the difficulties the defensively is the fact that IT is this hard is the fact that moving money, especially a for B2B, is very complex.

To do that gives an opportunity to us to kind of succeed in the market. IT takes a lot work. And what i'm coming back to on the payment side is how to be layer this on top of credit, which is our core offering, so that the platform becomes much more sticky.

And one of the things we have started to see is that retention is actually a lot higher if a customer uses us both for cards, which I call a kind like the Candy, right? It's credit. We give you the money, everybody once that in some sense, but then moving to payments, which is your money, and you are trusting us to move your money, which is a very different kind of go to market sales cycle.

But if you can combine the two kind of like giving like a build more, you have D, B, which is the expend medical side in the new bill, which is the payment ment side. IT becomes a very, very powerful product console but is still, i'd say, in early innings on the payment side, very, very different set of problems than in corporate credit. But combining those to me, provides much more value of the companies that we worked for, especially when you committed from A B to be angle. IT is very different from consumer.

Yes, in one of the things that you're both heating on versus in the U. S, if you're going to build many funny cal services products from bad many funny al services products, there's all of these different now very modern companies that provide credit as a service, K, Y, C as a service, lots of data fraud as a service. When you go down to the last time, those for the most part, don't get exist. And so you end up having to build a lot of that yourself, which is, I would say, a disadvantage at the start because IT takes more time, but then ends up being a significant source of defensible way.

And I think one quickly to point this out as when we started one of the hardest things as how do you actually ship cards? Because people forget the fact that cards actually have to be delivered to different countries, right? And most card Operators just delivered in that single country and in the us.

That's fine as of single geo with the single currency. You can do that fly easily. But when you need to, adam and you are like, I need to deliver cards. The provider of the cards don't shape those cards. And so we had to go figure out like an Operational way to make that easy and like both that on, but there wasn't the provider we could just go to and delate, can you shift this for us to six countries?

All right. I want to bring this back around. And looking forward to the future, what are you excited about going forward? And what might other investors think about? Haven't yet invested in the region.

One of the vertical action has been quite exciting. In last in amErica has been e commerce. You seen players like america, liver come in route, the I fit in brazil and even collect in mexico with the largest private company now.

So I expect that we will continue to see a lot of this companies tackling the e commerce opportunity as the majority people continue to come online and especially as the majority the payments go online and IT becomes easy to transact. But there's a specific segment to that, I think, gets, let's notice, in the region, which is just the SaaS companies. So embassy, you have companies like total is a large public company going after the the E R P S.

space. But also you have companies like out zero that actually started in argentina. And when global, we met a bunch of companies that starting that time, they signed the largest enterprise companies in latin america.

They develop product really, really fast for them. And then they're also very ambitious. And then they're like, okay, we want to expand outside of the region because our customer that is probably not as big in the region.

So we're starting to see investment company called, you know, which is a pain requisition company, is started in that to america, specifically colombia. They expanded to the region very quickly and now they have Operations in europe and southeast. So I think that we will continue to see a lot of that.

I think the opportunity said when you come to the region are quite different. So what gets developing brazil? You know a nico system that the maintained method is speaks and eighty five percent of the population is bank, and you have a regulation that is grow. Innovation is very different, is going to create different opportunity to mexico, for example, where how of the population still does not have a bank account, the main payment method, cash and regulation has not been a catalyst for innovation, so you will be quite exciting to see how this innovation emerges for country. But I think with A I restarted to see a bunch of founders in the space that are taking advantage of these new tools to make their Operations either more efficient or ever that to have Better go to my emotion or actually increase even the willingness to pay for software, which I think has been one of the main chAllenges historically ally in the region.

What do you think silicon valley could learn from latam? And what makes you particularly excited about your regions in the next five, ten years?

One is resiliency, right? You and I have a few mutual friends who have been Operating in the region for a long time, and there are nothing if that resolves an and paranoid. So that resilience, an and paranoia is something I think comes in handy, especially in the long years of the look valley, right?

So you can always do so much more with so much less. And I think that hustle and that facilities. So you can, if I count on and what gets me excited, I mean, honestly, IT goes back to why move back, right? There are just a lot of work to be done. And I like what gave said, which is that this idea of whatever happening in A I and whatever is happening in tooling and ways of company building can be quite information for lad in america, because in a place which doesn't have a lot of capital and let's beyond the capital has come back to last time. But it's not what IT used to be durability to leverage.

I leverage no code tools is also you could build companies in different ways that you could even when we feel the couple, you know, there are a lot of things we have to invest up front that today I want to have to do if I were building the company from scratch because you can use A I, you can use no code, you can use some companies in the stacks or of the side vendors. So I get excited about that. I get excited about the fact that the jobs nowhere near done and the tour is only getting Better.

I think two things so on. What I really enjoy in some senses, the ability to get things done tends to have this spirit of like just moving anything that needs we moved to get to an outcome. And the second thing is the in fact, in some sense that we have even as jeeves, we would get countries that reach out to somebody like look before jeeves get along like the weren't able to expand.

And these are like companies that do can manufacturing. It's not necessarily all sexy tech company is. So its impact is different in a way because.

There tends to be a monopoly on banking there. And actually providing your credit and banking services touches folks in a way that I don't see the same impact in the U. S. I think those two things for me is very, very exciting and the potential to santis point is just getting started.

All right, that's all for olympic series. Remember, if you missed some over episodes on U. K. Are france or the technology behind the olympics or even our episode with olympian l race man, make sure to go give us a listen. But if you did like any part of the series, let us know and rate this podcast 点 com slash asic extensive or you can drop us a line at pod pitches at asic 芯级， right, will catch you next time.