Episode Transcript
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Speaker 1 (00:08):
You're listening to the FinTech Thought Leaders
podcast from QED Investors.
You're deep dive into the worldof venture capital and
financial services with today'sdigital disruptors.
Qed is a global venture capitalfirm focused on investing in
FinTech companies all the wayfrom pre-seed to IPO.
Fintech Thought Leaders bringstogether the most talented
entrepreneurs tackling today'sbiggest problems.
(00:30):
If you're looking to learn moreabout what motivates our
founders and team members tosucceed, you're in the right
place.
Hello and welcome to theFinTech Thought Leaders podcast.
I'm Bill Salufo, head of earlystage investments at QED
Investors.
Today on the podcast, I'm veryexcited to be joined by
colleague and QED principalfocused on investing in LADAM,
camila Vera Kami.
(00:51):
Welcome to the podcast.
Speaker 2 (00:53):
Thank you for having me.
Speaker 1 (00:54):
Kami, we're very excited to have you on the
podcast today for lots ofreasons, but one of which is I
always love getting to revisitmy early days at QED, when I
spent most of my time thinkingabout Latin America, so this
will be a wonderful blast to thepast.
We're thrilled to have you onthe ground in Sao Paulo, which
is a huge advantage we did nothave in the early days.
So that's great, but I wonder,if we're starting us off, if you
(01:15):
could give us a little bit ofan elevator speech on your
background and how you came toQED.
Speaker 2 (01:20):
Sounds good.
So for those that don't know me, I'm from Brazil.
I'm from the South of Brazil.
My family as a whole has livedto everywhere, from Brazilia,
which is the capital of Brazil,but LA Florida, vienna, milan,
beijing, new York, west Virginia, Canada, minnesota.
We've been around, but I did goto high school and college in
New York, study economics andmath.
(01:41):
After that worked at theMinister of Finance in Brazil
for a bit before heading back tothe West where I joined Moody's
.
That's where I got my credit inaccounting 101 training, so
huge nerd job that I loved.
After Moody's I joined GoldmanSachs.
That was in between, when I wasdoing business school at night
(02:02):
and weekends Do not recommendthat for most people.
But as part of Goldman I joinedthe team that was credit risk,
both covering sovereign risk butalso technology companies Kind
of got both my economics andfinance hats on, which I liked
Very different jobs, but part ofthe credit underwriting team I
(02:22):
was responsible for thecomplicated credit structures,
which we now call thempreferreds, but at that point
they were instruments that wewere trying to figure out
whether or not to put on equitypaper or that paper, whether or
not to have cash components ornot, and that got me very close
to the companies that were doingthose structures at the
beginning, which, no surprise,were tech companies, and that
(02:44):
pushed me to go from the creditside of Goldman to the equity
side of Goldman when thoseclients were preparing to go
public, when they were doingeven more complicated structures
than we initially thought werepossible.
As part of the equity team, Iworked on helping those
companies raise funds Now wecall them pre-IPO rounds At that
point they were not called thatbut also assisting them to go
(03:06):
public in the life post-IPO,once they were trading in the
stock market.
During that process, I ended uptaking one company public that
was called Seredium.
It's a HR software company thathad the dream of going from a
Canadian and US company to beingmultiple countries, and to me
that was very exciting.
So I ended up leaving Goldman,joining Seredium, helping them
(03:28):
both on the internationalstrategy and corporate
development.
So what that means is that Iwas doing a lot of the should we
buy, build, invest, partner andmapping out what those
companies were across the globeand, honestly, that's when I
learned how to do.
Hey, this is what operatinglooks like.
Right, because banking is verydifferent than operating and
(03:50):
investing is very different thanoperating.
After Seredium.
I got a call from my husband whodecided to move back to Brazil
and I had to learn a little bitof what was happening in the
Brazil ecosystem.
At that point I ended up gettingvery close to Quintondar and
Hamar, which are both unicornshere in Brazil.
I ended up choosing the Hamarroute, joined Hamar as director
(04:12):
of finance strategy operationsand investor relations, but stay
very close to the Quintondarteam which, as some of our
listeners will know, are part ofthe QED portfolio as well, in
Latam and QED if I kind of takea step back, the story in Latam
has always been extremelyimpressive.
What you guys built here, butin some ways like, if you think
(04:33):
about my background, a mix ofoperating credit investing, both
experiencing Brazil and the USit felt a little bit like the
role was written for me and themore we kind of started talking,
it was hard to not see a fit.
When I left Hamar I was notready to leave.
I felt like I left with my jobunfinished, my best was not done
yet, but you really felt theright match for where I was in
(04:56):
my life and what was I have forme for QED and I'm excited to be
here and be able to build on aplatform that's already amazing.
Speaker 1 (05:02):
Yeah Well, look, I feel bad for Hotmart, but
absolutely thrilled for us.
I thought you made thatdecision and, if I'm not
mistaken, it was Dave Sherry,former CFO of Quintundar, that
helped connect us.
We owe him a great debt ofgratitude as well.
So do I.
It sounds like you lived inabout 78 different cities and
countries around the world.
What was your favorite?
Speaker 2 (05:22):
I think between Beijing, new York and Sao Paulo,
it will probably be the topthree for work Quality of life.
I would say Minneapolis isthere and Sao Paulo happens to
be a little bit of Minneapolis,a little bit of Beijing and a
little bit of New York, all inone city.
So it's probably why I'm herenow and why I'm happy to be home
.
Speaker 1 (05:39):
Makes sense.
What's funny is we've actuallygot two folks at QED living in
Minneapolis, which is not commonfor the venture world, but one
who's there full time and onewho's there for the summer, so
it's been a long time since I'vebeen there.
I'll have to go visit.
So, kami, your major waseconomics and originally you
thought you'd want to be aneconomist.
You eventually changed yourmind, went and studied finance
and kind of.
The rest is history whatattracted you originally to the
(06:02):
idea of being an economist andwhat caused the shift?
Speaker 2 (06:06):
It's easy to have a high side right, but when I
chose economics, there were twothings that really drove my
decision.
One is Brazil is always thecountry of the future is what
we've been hearing and what I'vebeen hearing since I was a kid,
but in reality I was alwayssurrounded by inequality, lack
of access of education resources, and I wanted to understand how
(06:27):
poor economics decisions weredriving the country of the
future to never reach thepotential, and I thought that
studying economics would driveme to learn how to help.
The second part is I was alwaysobsessed about learning how the
behavior side of it happened.
So how do people make decisions?
What drives those decisions?
And if, for some way, we couldunderstand the collective way of
(06:48):
how people make decisions, thenmaybe we could change it and
improve it.
So I think both the inequalityand the behavior side of things
really got me excited hadbehavioral economics existed
when I went to school.
Speaker 1 (07:00):
I think I would have loved studying that.
I was just regular oldeconomics myself because it
didn't exist, but I think thebehavioral side is pretty fun.
Speaker 2 (07:08):
Yeah, but the reality , though, governments don't work
that way.
Right, like the politics iswhat drives how decisions get
made, and that's a little bit ofwhat drove my shift from
economics more to finance,feeling like we talk about
equity decisions, that decision,corporate decisions, but teams.
At the end of the day, we areimpacting employees.
That's a more direct way ofimpacting change in the world.
(07:30):
Versus you know, let me stayhere for 12 hours in the dark
room, do a bunch of dataanalysis that the government
will never take intoconsideration, make decisions.
It didn't feel like one mightpace, of personality, but also
how I wanted to make impact onthe world.
Speaker 1 (07:46):
I mean you talk about one of the motivators being
kind of this disconnect betweenthe potential of Brazil and what
the actuality is.
You see you spent some time infinance in Brazil.
How would you say that fromthen to what you're doing now,
brazil has changed or notchanged kind of over that period
?
Speaker 2 (08:02):
We definitely see more companies around today.
We see more employees startingnew companies, right.
So at that point you wereextremely lucky to get into
Itaúa Banco Brazil, right.
Like everybody, went to college, did the entry exam for Banco
Brazil.
That was the dream job.
That is exactly why my dad did,and that was very successful
career path where today you seea lot of the folks that went
(08:25):
through those many years oftraditional banking, traditional
law jobs starting startups andthen we've had the first phase
of those startups and nowemployees that were part of the
first phase are starting thesecond phase of startups.
So I definitely see an expansionof talent starting new
companies.
The government has alsoincentivized a lot of those
(08:47):
changes, right.
So from a regulatory standpoint, from a capital standpoint, the
openness of the governmenthelped more funds join the
ecosystem and that starts todrive what we need to see right.
We have talent, we have capital, we have an open market that
leads into more innovation.
So I definitely see, both froma finance standpoint, from a
(09:09):
corporate standpoint, andstartup.
We're years ahead.
I wouldn't say that we arethere in our full potential, but
hopefully we will be able to domuch more, as we still see a
lot of inequality and things toimprove, but it's way better
than it was back then.
Speaker 1 (09:24):
Yeah, I mean your comment about the career path of
Itaú and Bank of Brazil ringsso true.
I mean, in the early days whenwe started investing in Brazil,
companies had such a hard timeconvincing people from Itaú to
leave their jobs and come workfor startups.
And it was stunning to see thechange back to the boom years of
1920, 1921, of how there wassuch a flood of people coming
(09:46):
into startups and how differentthat was from the US.
Right In the US it wasn't thathard to convince people to go
from banks to startups.
It's a really interestingcultural shift, as you lay out
there.
So obviously you spent time inthe US educationally high school
, college, started your careerin Brazil and then decided to
come back.
I mean it sounds like thatwasn't necessarily the smoothest
(10:07):
transition.
I mean kind of coming therewithout your family and starting
the career here in the States.
I wonder if you can talk aboutthat transition and some of the
challenges and opportunitiesthat you saw.
Speaker 2 (10:16):
Yeah, no, I definitely think that what
people say about the US beingthe country of opportunities,
that ranked true for me.
You know, when I gave up on myeconomist career, it was clear
to me I had to go to businessschool.
And it was clear to me that,you know, although I really
liked math, the finance mathlooked very different.
(10:37):
So when I moved to the US, Istarted as a part-time at
Moody's.
I had to convince them to turnme into full-time, which they
did later.
At the same time I was doingbusiness school and trying to
figure out what to do next.
I remember ordering my mattressonline, kind of moving to East
Village into a very tinyapartment and as soon as
business school ended Iimmediately went into Goldman.
(10:58):
Right, there was no transition,which again not a great
work-life-balanced decision, andat Goldman I kept thinking
about my family in thecountryside of Brazil, my dad
that had left that city to giveus better opportunity.
Irrespective of the many hoursat Goldman or the amount of red
(11:18):
eyes that we had to take Like, Ifelt the luckiest personal life
right to be there.
But I was also a very Brazilianand Lao woman at Goldman Sachs
and for a long time that wassomething that I had to tame.
I had to figure out how to fitin, to not have an accent, or to
have the least amount of accent, I should say, and focus on
(11:39):
blending in, which issurprisingly very different than
I think.
What I do today.
A little bit of that is mefeeling comfortable with where I
am in my career and what I knowand who I am.
But at that time was you're in aalone in a country.
You have the best opportunitythat anyone in your family has
ever had.
It does not matter if it's 2 amor 4 am.
Shut up, get work done, blendin and do your absolutely best
(12:03):
and then wake up the next dayand do it better, and I think
for a long time that was all Iknew.
There are benefits to that, butthere's also downsides to it,
right, like the beauty of takingbreaks, the beauty of being
able to take a step back.
I think, or when I did that inmy career, was when I made
bigger jumps and became a betterversion of myself.
But yeah, moving to a newcountry, starting at Goldman
(12:26):
while doing business school, Idon't recommend it.
That had to be pretty stressful.
Yeah, sounds more romantic thanit sounds.
It was not fun.
Speaker 1 (12:34):
So you spent time doing a number of things related
to finance whether more of aneconomist's role or banking or
credit etc.
You then went into a coupleoperating roles and now, if you
look at QED, we are definitely ablend.
We're all investors now, but abunch of us have pretty sizable
operating experience and a bigpart of the value proposition is
how that helps us.
(12:54):
I mean, how would you say thatyour time as an operator has
kind of helped you now thatyou've moved kind of back into
the world of investing?
Speaker 2 (13:02):
When you're in banking, consulting,
post-business school, it's veryeasy to go around the narrative
of what it should be and whathappens in reality is very
different than what it should be, and understanding that I think
being one in pathetic two thefounders and entrepreneurs that
are in the journey, that goes along way, but also different
things to task.
A little bit of the operatingrole is building pattern
(13:24):
recognition over time, like whatare things that work, what are
things that don't work and whythey don't work?
What are tasks that you havedone, who has done other tasks
and why it has worked for themversus not for us?
So the operating role givesjust you an open eye of what is
possible versus what sounds goodand in some ways that's good,
(13:45):
and in other ways it makes usmore skeptical, like in some
ways we almost have to take outthe operating hand and say, hey,
if everybody thought it wasobvious, then maybe you wouldn't
be called innovation.
So I think it's a mix of beingable to do both, but definitely
think operating helps us becomemore realistic of what's
possible and also be betterpartners to those that are in
(14:07):
the journey.
Speaker 1 (14:08):
One of the things is a global fintech firm.
That we try to do is learn fromone market, try to apply those
learnings, where we can, toanother market.
But I think we've all learned.
When it comes to emergingmarkets generally, latin
American specifically, cuttingand pasting is pretty unlikely
to really pay off.
You're in a great position.
Having worked in both countries, having done multiple roles in
(14:28):
both countries, I mean I'd loveyour perspective on how that can
get done successfully.
How can you learn from modelsin the US and apply those
learnings in Latin America,while recognizing why is it so
difficult that you really can'tcut and paste models from one
country to the next?
Speaker 2 (14:44):
We've heard, sometimes, like Brazil, it's
five years behind the US.
Columbia is maybe a tiny bitcloser to Brazil and similar to
Mexico, right, and so that givesus the benefit of seeing models
that have worked.
And the first face ofinnovation in Latin America as a
whole has been the.
I am going to be the Uber ofColombia, I'm going to be the
WeWork of Mexico, whatever it is.
(15:06):
So we have seen a lot of thecopycats of the world happen in
working Latin.
As we enter the second phase.
It's where we're seeing some ofthose models not work, and
that's when I think having thelocal expertise adds a lot of
value, because I think, forexample, we see a lot of the B2B
CFO tools in the US able to getsignificant market share.
(15:29):
Right, they may end up stillbeing kind of the mid market,
but significant enough in size.
Where in Brazil, if you look atthe options of CFO tools that
companies have, the majority ofcompanies in Brazil are small
businesses similar to Mexico,similar to Colombia, and the
options that they have arehorrible but are extremely cheap
.
Where in the US, you may have acheap product-collective
(15:52):
strategy for that theme and itworks very well.
You're able to get market share.
We're in Colombia, mexico andBrazil, not so much right Like
we've seen companies that buildamazing products in the space
and haven't been able to getsignificant revenue, and a lot
of that it's because of howfragmented it is, how cheap
alternative are, but also justthe relationship and how to sell
(16:14):
.
And if you don't know thosenuances of fragmentation,
geographical splint, prices,just willingness to switch from
existing solutions, the US modelwon't work.
So I do think there are a lotof things that we have benefited
and we'll continue to learnfrom the US models, but as we
(16:34):
look through Mexico, brazil,colombia, I do believe that the
biggest modes and the hardestcompanies to build would be the
ones that can adjust to thoselocal nuances.
Speaker 1 (16:43):
Yeah, and it is interesting to look even at
QED's portfolio how some reallysuccessful companies were
clearly inspired by the US butare nowhere near direct cut and
paste.
I mean New Bank's a goodexample.
I think the first PowerPointthat David put together was the
building the Capital One ofBrazil.
But if you look at New Bank nowit barely resembles Capital One
, right, there's so manydifferences.
You see other models, quintoand Dar, just to revisit when we
(17:06):
talked about.
I mean I don't see how thatmodel would work at all in the
US and it's been a wonderfulsuccess, so truly a kind of
business model inspired byunique local conditions and
solving those problems.
So I mean I think that's been anice learning institutionally
over the years.
But I'm not sure I've seen, atleast within FinTech, any true
cut and paste models get a wholelot of traction.
(17:26):
Okay, I mean you've describedmemories when you were younger
of sitting around the dinnertable and having your whole
family sort of talk about howmuch money did you bring in that
day, making sure all of yourbills are going to be covered
some situations that many peoplelistening to this podcast may
not really have much experiencewith.
How does that background kindof influence how you think about
investing today, how you lookat the markets today.
(17:48):
How has that perspective beenhelpful for you?
Speaker 2 (17:51):
For background.
My broader family owns manysmall businesses, and when I
mean small, I really mean small,and what that means is they
know every supplier.
They've been with the samesupplier for 30, 40 years.
They negotiate payment datesfor every single product they
buy.
They know every client Buy now,pay later.
For them is pen and pencil.
X person came in, bought thismuch, and they will pay me when
(18:13):
they can, not through a fancyplatform, which all sounds
complicated when I say it likethat, but it is very much the
normal and typical story ofBrazilian asinis.
The majority of them areworking class.
They're the first ones to bethere to open the store.
The last ones to leave areworking week by week trying to
(18:34):
get the right cash flow to work,and they've been doing that for
30, 40 years and the generationbefore them did exactly the
same thing.
So, even as I see a lot of ourbefore their companies, or
companies that we're talking to,innovating in the B2B space, my
aunts and uncles, who are notthat old, are doing exactly what
my grandparents did, eventhough we have had stone in
(18:55):
Brazil for years, right, eventhough we've had solutions that
solve some of those problems foryears.
So I mean in one part that'ssad.
Right to see that we haven'thad a lot of jumps, even though
more technology is available.
But from our position isextremely exciting that we still
have a lot to do.
Fintech has not touched themajority of Brazil.
But that gets me to reallythink about willingness to adopt
(19:18):
right.
I think I mentioned early onthe B2B example.
Why is it that we have some ofthe technology available but
we're not able to penetratesmaller cities and multiple
segments?
And how do we do when price isnot the only thing right?
We have trust, we haverelationship, we have other
barriers that Fintech hasn't yetfigured out how to do that in
(19:39):
Latam.
So all of those things to meare exciting and opportunities
and it keeps me focused on thethings that we have yet to solve
.
Once you leave the São Paulobubble, those things become very
obvious.
Right, like, if you're only inSão Paulo, you may have the hey,
fintech is saturated with.
We've done what we can here,but the reality is the majority
of Brazilians don't live in SãoPaulo.
(20:00):
Like, we have many, many, manyother gigantic cities and
smaller cities where pen andpencil continue to be the way to
do it.
So I think we have lots of workto do still.
Speaker 1 (20:10):
You mentioned trust.
I think this probably isn'tsomething that most Americans
think that deeply of when itcomes to financial services.
Maybe the weekend where SVB hadtheir issues was kind of a
reminder that trust is stillreally important in the banking
system.
But when you go into LatinAmerica you know in Brazil,
probably even more so in Mexico,there's such an inherent
distrust of financial servicesand banks.
(20:31):
How do you see that kind ofplaying into fintech's rise and
some unique challenges andthings that founders in Latin
America need to overcome?
Speaker 2 (20:40):
This is a trillion dollar question, right?
We really haven't figured outyet a way to do it everywhere.
The one way I think about is wesee a lot of fraud in Latin
America and the players thatwere here before our fintech
portfolio companies were the bigbanks, and the big banks told
everybody don't give yourinformation to anybody, don't
send your money to anybody thatyou don't know.
(21:00):
And then here we come, thefintechs and the open banking
regulation and everything saying, hey, press a button and give
me all of your information.
I'm here to give you more moneyand more access to financial
access.
So in some ways, we are undoingthe right work the big banks
did for years of teaching peoplehow to protect for fraud and
protect their data.
(21:20):
So the way I think about it isfrom our standpoint we try to
help our portfolio companies onthe risk and fraud side be good
agents, right.
If we have more fintechs doinggood and doing the right thing,
then that with time will buildmore trust in the system.
But there are things that wetry to help our portfolio
(21:40):
companies not fight the curveright.
So the curve that I mean isaccess to information really is
how digitalized the country is.
Access to mobile information,how much education that
geography has, if you kind ofplay that forward, as we see
more and more people havingaccess to internet, having
access to phone, they'reconsuming more information
(22:02):
online.
They're trusting the peoplethat they don't see in front of
them.
Right In Brazil, we see a lotof that already.
We see the impact In Mexico.
There are a lot of places wherethat isn't true yet, where that
penetration of informationhasn't happened.
So we see a lot of Mexicocompanies that have in-person
sales strategies.
Versus in Brazil, you may havemore digitalized sales
(22:24):
approaches.
So we have companies in Mexicosaying, hey, instead of buying
this milk at the supermarket,open a bank account with me and
I'll give you a card right nowand then you can swap the card
right now and then you'll seethat it works instead of just
paying with cash.
Or hey, you should open aforeign bank account closer to
the border and I'm with youthere in person, right?
(22:46):
So I think the fintechs have hadto come up with creative ways
to build trust.
It is our job to make sure wecontinue to invest in good
agents, but at the end of theday, it's a progress and we can
skip the curve In some ways weneed to respect it and hopefully
help accelerate it as we can.
But part of having the localknowledge is not investing at
(23:07):
the wrong time of the curve.
Right, we've heard multipletimes oh, this business five
years from now would havethrived.
So how do we not get into that?
And understand where we are inthe curve is important.
Speaker 1 (23:18):
We've been fortunate to be one of the early investors
, as the fintech ecosystem wascreating a number of great
companies, whether New Bank orQuintuendar or Creditas or Kavac
, that have come out.
But you obviously work withmany of our companies.
I think we have 40 some oddinvestments in Latin America.
I wonder if you could talkabout a couple of the more
recent breakouts, a couple ofcompanies that we've seen that
(23:39):
really seem to be hitting theirstride right now.
Speaker 2 (23:41):
It's always hard to pick right what we see happening
in this quarter, so we have anproximity bias.
One I would mention is Cobra.
So Cobra is based in Colombia.
For those that don't know,Cobra enables other companies in
Colombia to connect theiraccounts and banks and
centralize all of their treasuryneeds into one platform.
The beauty of what Cobra isdoing is they really follow the
(24:03):
customer and started with onespecific solution within
treasury and, with time,listened to the clients were
asking for more ways to optimizecollections, reconciliation and
really do everything thattreasury touches, and we see now
that the team was able tolisten to that quickly, adapt
the roadmap quickly.
The numbers are reflectingright what they are selling to
(24:24):
the market is very muchresonating.
We tend to see more of Cobra inthe future, I think, both
penetrating the market they'rein but expanding now the
platform and what the platformcan do.
But to us, I think, comparingto Cobra this year and last year
, it was the team's ability tolisten, adapt and execute that
really got them to, I think,being this breakout list for us
(24:44):
this year.
So good job, Cobra team.
Speaker 1 (24:47):
As with many successful Colombian companies,
they also have their eyes set onMexico, if I'm not mistaken.
Pretty common transition there.
We see companies jumping fromone to the next For sure.
Speaker 2 (24:57):
I think the other one to mention and it's one that
I'm spending more time withlately is Warren.
Warren is starting in Brazil asa way to help Brazilians invest
better according to their goals,instead of really buying
products that the banks wereselling to them, because those
products were paying highercommission to those that were
selling.
In the past that was superobvious of a thesis, but in the
(25:20):
past year so many of theregulatory changes are helping
Warren because now there'stransparency that will kick in,
so Brazilians will actually knowmore how absurd the commissions
that they were paying beforewere.
Where before it was Warrentelling them hey, just so you
know this is absurd.
So I think that helps a lot.
Like you have more Braziliansin the past five, 10 years that
(25:41):
have mobile access.
They have more digital access.
We have more Braziliansentering the stock market than
ever and with this changingregulatory to give visibility to
commission and really the lackof alignment between who sells
your products and to those whobuy it, that should also
continue to help Warren.
So very excited to spend moretime with Warren in the next
(26:02):
couple months and always goodwhen the market changes are
aligned with what the company isbuilding.
Speaker 1 (26:07):
Well, let me highlight maybe our most recent
investment that I know you wereinstrumental in working on, a
company called Motu.
That again is another exampleof a business model this would
never exist in the US, but acompany that's been incredibly
successful in Brazil.
I wonder if you can lay out alittle bit of what they do and
what got us so excited about thecompany.
Speaker 2 (26:25):
Absolutely so.
Motu helps Brazilians be ableto rent a motorcycle and as soon
as they rent, they can startworking with a motorcycle, both
on e-commerce deliveries andother types of deliveries, and
with that, really empower thatperson to, as soon as they rent
a motorcycle, have a job.
The beauty of this business is,as we think about banking and
(26:45):
fintech in Brazil.
For those that don't know, yourcredit score is not driven by a
FICO score or a specific rangeof outcomes.
Here we have a concept that'spretty binary.
Like you either have goodcredit or you don't, which we
call the negativados.
A large part of the society areunder this negativados bucket.
For reference, if you are anegativado, you don't get along
(27:08):
from New Bank, for instance, ora traditional bank, which means
you don't have access to credit.
A lot of jobs won't accept youif you're part of the negativado
bucket, so Motu focuses on thatpart of the country, right?
So for me that was veryexciting, because you have a
large part of society that hasdaily needs, daily spends,
families to feed in a recurringbasis, but don't have a lot of
(27:31):
access to credit.
Motu enables them to work andthat really is something that
they will do every week.
They will do every monthbecause that's how they feed
their families and that's howthey feed their way out of the
negativado bucket.
So for me it's a veryBrazil-specific problem lack of
credit access to a large part ofsociety and they've built a
very complex business becausepart of the rental they also
(27:54):
guarantee maintenance.
They guarantee the ability thatthat bike will continue to work
.
So if anything happens, from alicensed standpoint, from a
maintenance standpoint, it'spart of the rental price.
So it's extremely complex tobuild.
It's even harder to do it in aprofitable way in multiple
cities.
As I mentioned, going intooutside of São Paulo is
(28:15):
extremely hard.
Most companies are not able todo it.
To have a CapEx intensivebusiness do it profitably is
very rare.
So when we looked at Motu,their modes were very clear.
It's hard to build somethinglike this today where capital is
not as available.
Their numbers were showing tous not only how the product
resonated but the way to buildis kind of what made it
(28:37):
successful.
So very excited to partner withthem.
We led their series that justclosed.
We recently announced andhopefully we'll be able to get
into even more cities in Brazilbut also expand to Mexico.
Lack of credit, inability toempower the very low base of the
economy is not unique to Brazilonly, but it is very hard to
(28:57):
build if you don't know how to,and I think the relationship
Motu has built in the pastcouple years will help them to
city Mexico as well.
Speaker 1 (29:05):
That's fantastic, and I think we've got some
statistics.
You know how much we've beenable to help some of these
people increase their earnings.
You can describe it as amotorbike leasing company.
While that is the product thatfacilitates it, that's not the
end goal, right?
The end goal is employment.
Speaker 2 (29:19):
I do think the interesting part of the Motu
business is that every othercompany that's in that segment
typically forces the customerinto.
You only deliver food for thiscompany or there's a lot of
exclusivity into how it works.
And the beauty of Motu is youcan use the bike for mobility,
you can use the bike fordelivery, you get as much as you
(29:40):
produce and how you produce isup to you.
So it very much is empowering.
As you think about it, you know, going from having no work to
now having flexibility into whenyou work and how you work.
Speaker 1 (29:51):
What are a couple of the trends that you're seeing
now and things that are reallyexciting?
You as you look to makepotential new investments.
Speaker 2 (29:56):
I continue to look at B2B Seattle tools.
I have not given up.
We have a lot to do and eventhough the go-to market is not
easy, someone will be able tobreak through and forget all the
way to do it.
Maybe that's doing it byvertical.
Maybe that's doing what COVIDis doing.
Very specific to one part of thesolution, we have a couple of
bets in the QED portfolio in thesegment already, but I continue
(30:19):
to look at this theme,especially because, with open
banking in Colombia and Mexicoand Brazil, we tend to see both
the BDC and the B2B get benefitsfrom having more data and data
that we didn't have access tobefore.
So, following the open banking,anything that really has been
impacted by regulatory latelyI've been going deeper, and
(30:39):
that's both insurancemarketplaces, anything that
benefits from additional data.
Compared to the US, insurancepenetration in Mexico, brazil
and Colombia is extremely lowand a lot of it is priced and a
lot of it is also willing us topay.
How do we break those problemsand get more Brazilians,
colombians and Mexicans accessto insurance?
(31:00):
It's something that we have yetto also figure out how to do at
scale.
But overall, everything thattouches energy solar we continue
to be very interested in that.
How do I spend capital marketsfor our fintech companies?
Continue to leverage thecapital market.
So it's the problem that wefeel very close to home how to
continue to expand the capitalmarkets.
Add more financial productsinto Latam that are not
(31:23):
available yet, or at least arenot available at accessible
prices.
So anything that touchesregulatory data in B2B has been
very much how I've been spendingmy time, but always open to new
models as well.
Speaker 1 (31:38):
Yeah, I mean the regulatory side is fascinating.
I tell just about everyone thatI think the most impressive
regulators in the world sit inBrazil and India.
The amount of progressivechanges to the market is
impressive, whether it's theadvent of PICS, the advent of
open banking, the advent of thereceivables registry.
Just moving so many thingsdigital and being able to then
(31:59):
create a bunch of businesses ontop of that is fascinating to
watch.
Now, I'm sure with anyregulators there's also things
coming out that we may not agreewith, but as a general rule,
it's nice to see them backinginnovation so aggressively.
Speaker 2 (32:10):
It definitely is, and I do think that the beauty of
the QED local presence helps alot.
So I'll give an example If youread the newspapers, with open
banking in Brazil, colombia,mexico, you get one picture
right Things are progressing,things are moving, everything's
going well and into perspectivethey are.
They are moving and things areprogressing and we have a lot of
(32:32):
good things happening.
When you are on the WhatsAppgroups with the operators
implementing those changes, yourealize how far we are yet from
implementation, from scalingthose technologies, from seeing
the real impact that they stillhave yet to have.
So, from a VC standpoint, Ithink that's very powerful.
So, again, you understand wherewe are in the curve of adoption
(32:55):
and where we are in the curveof the technology, so that we're
not only investing from whatyou read in the newspaper, but
you are closer to the productteam, closer to what actually is
possible.
So those are things we arepassionate watching, but also
keeping a cautious look to notjump before we can walk.
Speaker 1 (33:14):
Makes sense.
Well, let me move to our lastsegment here.
A little bit about you andmaybe some lessons that our
audience could take away.
So let me ask you a couple twinquestions.
I mean, how would you describeyour superpower?
And, conversely, what's onething that you wish you were
better at that you're working on?
Speaker 2 (33:29):
Superpower, I would say I like to go very deep in a
topic that drives me and keepsme excited.
What I wish I would do betteris that I could not go deeper so
I could come up with the sameoutcome without needing to go as
deep, which I think.
It's something I've gottenbetter over time, but it is a
(33:49):
progress.
Speaker 1 (33:50):
I'm the exact inverse right.
So you know, I think peoplekind of refer to me as Mr 80-20
rule and really good at sort offiguring out how to get the most
bang for the minimum work,maybe because I was crazy lazy
when I was a kid.
So for me it's been theopposite of when do you know
that, look, you need to goreally deep to understand
something and really driveyourself to go deep.
So I can very much relate tothe tension between those
(34:11):
haven't come at it from kind ofthe inverse point of view.
There's no one right style forevery situation, that's for sure
.
Speaker 2 (34:16):
It's probably good for a team structure, though,
that we work together.
Speaker 1 (34:20):
Definitely, definitely.
Now we did pull some of theteam members about what your
superpower is and Mike, our headof LADAM, said ironically he
thinks your biggest superpoweris just that you're unbelievably
helpful.
Just, you know you're willingto pitch in and help founders,
you're willing to do anything tokind of help them figure out
with introductions or helpingthem do sales or helping them
with strategy or what have you.
(34:41):
It's just kind of theorientation around doing
whatever it takes is, I think,at least the thing that he likes
most and that resonates too.
I mean, I think you know justthe ability to step in and
really help companies.
You know, vc definitely gets abad wrap at times of you know,
hey, here's a bunch of money andpeople say they're going to
help, but they don't really help.
I think we try hard to not livethat and I think you're a great
(35:02):
example of that.
So anyways, not exactly the oneyou pointed out for yourself,
but good to hear from the team.
If you had to share one tipwith young entrepreneurs, what
would that be?
Speaker 2 (35:13):
Going off of what we talked about Motu right, focus
on what is difficult to build,very hard to replicate, but,
most importantly, why are youthe right person to do it and
why do it now?
The combination of those thingsit's what really makes the
powerful company stand out andhave union economics they're
hard to replicate and have amarket share that's hard to
steal.
So that would be, I think, alittle bit the combination of
(35:35):
business model and thenpersonally, why they are the
right people to build.
Speaker 1 (35:39):
So if anyone's listening here and wants to
pitch you, how do they get intouch and what should they know?
Speaker 2 (35:44):
Email.
It is Camilla Veada atQEDInvestorscom, very hard to
spell.
So I would say go to the QEDwebsite and click on my name.
What they should know is that Iam quick on the feedback.
I guess it's something that notall VCs do.
That can be seen as positive ornegative, but I think at QED we
(36:05):
try to be empathetic to thefounders and give feedback.
So always happy to, even if youthink QED is not a go-fi,
always happy to brainstorm andgive how we would think about it
.
Speaker 1 (36:16):
And last question, and probably the most important
question of this entire podcastyou are about to become a
first-time mother.
Talk about your emotions as youlead up to that, that amazing
event here in just a coupleweeks.
Speaker 2 (36:28):
It is terrifying and very exciting.
We spent a lot of time talkingabout the opportunities in the
world, right.
I think that gives meexcitement to have new people
and my daughter come into theworld to help build and benefit
from those enhancements.
But at the same time we havevery crazy timing in the world
with lots of unfortunateconflicts happening.
(36:49):
So it is terrifying to put anew child in the world, but also
very exciting From a careerstandpoint.
It was the right time for me,so I'm excited, Looking forward
to it.
Speaker 1 (36:59):
Absolutely, but we are all very excited on your
behalf.
It looks like I'm going to getdown to Brazil a little bit too
late.
Probably miss you while you'reout, but I love Brazil as a
market for QED.
You've been an awesome additionto the team in the last year or
so and we definitely wish youthe best on maternity leave and
we'll be rooting for the daywhen we get you back.
Speaker 2 (37:17):
Don't worry, Bill, If you come to Brazil I'll give
you the address of the hospitaland you're happy to come help me
so I can nap.
I'll take that any day.
Speaker 1 (37:26):
I would love to.
We're going to put Nigel onbabysitting duty.
That's going to be fantastic.
Speaker 2 (37:32):
Sounds good.
Speaker 1 (37:32):
Awesome.
Well, thanks for joining Kamiand to all of our listeners, as
always, thanks for listening andtake care.
This has been the FinTechThought Leaders podcast your
window into the world of venturecapital and financial services
with today's digital disruptors.
Qed is proud to provide thebest FinTech advice you can get.
(37:55):
To learn more or to read thefull show notes from today's
episode, check outQEDInvestorscom and be sure to
also follow QED on Twitter andLinkedIn at QEDInvestors.
Thanks for listening.
You're listening to the FinTech Thought Leaders
podcast from QED Investors.
You're deep dive into the worldof venture capital and
financial services with today'sdigital disruptors.
Qed is a global venture capitalfirm focused on investing in
FinTech companies all the wayfrom pre-seed to IPO.
Fintech Thought Leaders bringstogether the most talented
entrepreneurs tackling today'sbiggest problems.
(00:30):
If you're looking to learn moreabout what motivates our
founders and team members tosucceed, you're in the right
place.
Hello and welcome to theFinTech Thought Leaders podcast.
I'm Bill Salufo, head of earlystage investments at QED
Investors.
Today on the podcast, I'm veryexcited to be joined by
colleague and QED principalfocused on investing in LADAM,
camila Vera Kami.
(00:51):
Welcome to the podcast.
Speaker 2 (00:53):
Thank you for having me.
Speaker 1 (00:54):
Kami, we're very excited to have you on the
podcast today for lots ofreasons, but one of which is I
always love getting to revisitmy early days at QED, when I
spent most of my time thinkingabout Latin America, so this
will be a wonderful blast to thepast.
We're thrilled to have you onthe ground in Sao Paulo, which
is a huge advantage we did nothave in the early days.
So that's great, but I wonder,if we're starting us off, if you
(01:15):
could give us a little bit ofan elevator speech on your
background and how you came toQED.
Speaker 2 (01:20):
Sounds good.
So for those that don't know me, I'm from Brazil.
I'm from the South of Brazil.
My family as a whole has livedto everywhere, from Brazilia,
which is the capital of Brazil,but LA Florida, vienna, milan,
beijing, new York, west Virginia, Canada, minnesota.
We've been around, but I did goto high school and college in
New York, study economics andmath.
(01:41):
After that worked at theMinister of Finance in Brazil
for a bit before heading back tothe West where I joined Moody's
.
That's where I got my credit inaccounting 101 training, so
huge nerd job that I loved.
After Moody's I joined GoldmanSachs.
That was in between, when I wasdoing business school at night
(02:02):
and weekends Do not recommendthat for most people.
But as part of Goldman I joinedthe team that was credit risk,
both covering sovereign risk butalso technology companies Kind
of got both my economics andfinance hats on, which I liked
Very different jobs, but part ofthe credit underwriting team I
(02:22):
was responsible for thecomplicated credit structures,
which we now call thempreferreds, but at that point
they were instruments that wewere trying to figure out
whether or not to put on equitypaper or that paper, whether or
not to have cash components ornot, and that got me very close
to the companies that were doingthose structures at the
beginning, which, no surprise,were tech companies, and that
(02:44):
pushed me to go from the creditside of Goldman to the equity
side of Goldman when thoseclients were preparing to go
public, when they were doingeven more complicated structures
than we initially thought werepossible.
As part of the equity team, Iworked on helping those
companies raise funds Now wecall them pre-IPO rounds At that
point they were not called thatbut also assisting them to go
(03:06):
public in the life post-IPO,once they were trading in the
stock market.
During that process, I ended uptaking one company public that
was called Seredium.
It's a HR software company thathad the dream of going from a
Canadian and US company to beingmultiple countries, and to me
that was very exciting.
So I ended up leaving Goldman,joining Seredium, helping them
(03:28):
both on the internationalstrategy and corporate
development.
So what that means is that Iwas doing a lot of the should we
buy, build, invest, partner andmapping out what those
companies were across the globeand, honestly, that's when I
learned how to do.
Hey, this is what operatinglooks like.
Right, because banking is verydifferent than operating and
(03:50):
investing is very different thanoperating.
After Seredium.
I got a call from my husband whodecided to move back to Brazil
and I had to learn a little bitof what was happening in the
Brazil ecosystem.
At that point I ended up gettingvery close to Quintondar and
Hamar, which are both unicornshere in Brazil.
I ended up choosing the Hamarroute, joined Hamar as director
(04:12):
of finance strategy operationsand investor relations, but stay
very close to the Quintondarteam which, as some of our
listeners will know, are part ofthe QED portfolio as well, in
Latam and QED if I kind of takea step back, the story in Latam
has always been extremelyimpressive.
What you guys built here, butin some ways like, if you think
(04:33):
about my background, a mix ofoperating credit investing, both
experiencing Brazil and the USit felt a little bit like the
role was written for me and themore we kind of started talking,
it was hard to not see a fit.
When I left Hamar I was notready to leave.
I felt like I left with my jobunfinished, my best was not done
yet, but you really felt theright match for where I was in
(04:56):
my life and what was I have forme for QED and I'm excited to be
here and be able to build on aplatform that's already amazing.
Speaker 1 (05:02):
Yeah Well, look, I feel bad for Hotmart, but
absolutely thrilled for us.
I thought you made thatdecision and, if I'm not
mistaken, it was Dave Sherry,former CFO of Quintundar, that
helped connect us.
We owe him a great debt ofgratitude as well.
So do I.
It sounds like you lived inabout 78 different cities and
countries around the world.
What was your favorite?
Speaker 2 (05:22):
I think between Beijing, new York and Sao Paulo,
it will probably be the topthree for work Quality of life.
I would say Minneapolis isthere and Sao Paulo happens to
be a little bit of Minneapolis,a little bit of Beijing and a
little bit of New York, all inone city.
So it's probably why I'm herenow and why I'm happy to be home
.
Speaker 1 (05:39):
Makes sense.
What's funny is we've actuallygot two folks at QED living in
Minneapolis, which is not commonfor the venture world, but one
who's there full time and onewho's there for the summer, so
it's been a long time since I'vebeen there.
I'll have to go visit.
So, kami, your major waseconomics and originally you
thought you'd want to be aneconomist.
You eventually changed yourmind, went and studied finance
and kind of.
The rest is history whatattracted you originally to the
(06:02):
idea of being an economist andwhat caused the shift?
Speaker 2 (06:06):
It's easy to have a high side right, but when I
chose economics, there were twothings that really drove my
decision.
One is Brazil is always thecountry of the future is what
we've been hearing and what I'vebeen hearing since I was a kid,
but in reality I was alwayssurrounded by inequality, lack
of access of education resources, and I wanted to understand how
(06:27):
poor economics decisions weredriving the country of the
future to never reach thepotential, and I thought that
studying economics would driveme to learn how to help.
The second part is I was alwaysobsessed about learning how the
behavior side of it happened.
So how do people make decisions?
What drives those decisions?
And if, for some way, we couldunderstand the collective way of
(06:48):
how people make decisions, thenmaybe we could change it and
improve it.
So I think both the inequalityand the behavior side of things
really got me excited hadbehavioral economics existed
when I went to school.
Speaker 1 (07:00):
I think I would have loved studying that.
I was just regular oldeconomics myself because it
didn't exist, but I think thebehavioral side is pretty fun.
Speaker 2 (07:08):
Yeah, but the reality , though, governments don't work
that way.
Right, like the politics iswhat drives how decisions get
made, and that's a little bit ofwhat drove my shift from
economics more to finance,feeling like we talk about
equity decisions, that decision,corporate decisions, but teams.
At the end of the day, we areimpacting employees.
That's a more direct way ofimpacting change in the world.
(07:30):
Versus you know, let me stayhere for 12 hours in the dark
room, do a bunch of dataanalysis that the government
will never take intoconsideration, make decisions.
It didn't feel like one mightpace, of personality, but also
how I wanted to make impact onthe world.
Speaker 1 (07:46):
I mean you talk about one of the motivators being
kind of this disconnect betweenthe potential of Brazil and what
the actuality is.
You see you spent some time infinance in Brazil.
How would you say that fromthen to what you're doing now,
brazil has changed or notchanged kind of over that period
?
Speaker 2 (08:02):
We definitely see more companies around today.
We see more employees startingnew companies, right.
So at that point you wereextremely lucky to get into
Itaúa Banco Brazil, right.
Like everybody, went to college, did the entry exam for Banco
Brazil.
That was the dream job.
That is exactly why my dad did,and that was very successful
career path where today you seea lot of the folks that went
(08:25):
through those many years oftraditional banking, traditional
law jobs starting startups andthen we've had the first phase
of those startups and nowemployees that were part of the
first phase are starting thesecond phase of startups.
So I definitely see an expansionof talent starting new
companies.
The government has alsoincentivized a lot of those
(08:47):
changes, right.
So from a regulatory standpoint, from a capital standpoint, the
openness of the governmenthelped more funds join the
ecosystem and that starts todrive what we need to see right.
We have talent, we have capital, we have an open market that
leads into more innovation.
So I definitely see, both froma finance standpoint, from a
(09:09):
corporate standpoint, andstartup.
We're years ahead.
I wouldn't say that we arethere in our full potential, but
hopefully we will be able to domuch more, as we still see a
lot of inequality and things toimprove, but it's way better
than it was back then.
Speaker 1 (09:24):
Yeah, I mean your comment about the career path of
Itaú and Bank of Brazil ringsso true.
I mean, in the early days whenwe started investing in Brazil,
companies had such a hard timeconvincing people from Itaú to
leave their jobs and come workfor startups.
And it was stunning to see thechange back to the boom years of
1920, 1921, of how there wassuch a flood of people coming
(09:46):
into startups and how differentthat was from the US.
Right In the US it wasn't thathard to convince people to go
from banks to startups.
It's a really interestingcultural shift, as you lay out
there.
So obviously you spent time inthe US educationally high school
, college, started your careerin Brazil and then decided to
come back.
I mean it sounds like thatwasn't necessarily the smoothest
(10:07):
transition.
I mean kind of coming therewithout your family and starting
the career here in the States.
I wonder if you can talk aboutthat transition and some of the
challenges and opportunitiesthat you saw.
Speaker 2 (10:16):
Yeah, no, I definitely think that what
people say about the US beingthe country of opportunities,
that ranked true for me.
You know, when I gave up on myeconomist career, it was clear
to me I had to go to businessschool.
And it was clear to me that,you know, although I really
liked math, the finance mathlooked very different.
(10:37):
So when I moved to the US, Istarted as a part-time at
Moody's.
I had to convince them to turnme into full-time, which they
did later.
At the same time I was doingbusiness school and trying to
figure out what to do next.
I remember ordering my mattressonline, kind of moving to East
Village into a very tinyapartment and as soon as
business school ended Iimmediately went into Goldman.
(10:58):
Right, there was no transition,which again not a great
work-life-balanced decision, andat Goldman I kept thinking
about my family in thecountryside of Brazil, my dad
that had left that city to giveus better opportunity.
Irrespective of the many hoursat Goldman or the amount of red
(11:18):
eyes that we had to take Like, Ifelt the luckiest personal life
right to be there.
But I was also a very Brazilianand Lao woman at Goldman Sachs
and for a long time that wassomething that I had to tame.
I had to figure out how to fitin, to not have an accent, or to
have the least amount of accent, I should say, and focus on
(11:39):
blending in, which issurprisingly very different than
I think.
What I do today.
A little bit of that is mefeeling comfortable with where I
am in my career and what I knowand who I am.
But at that time was you're in aalone in a country.
You have the best opportunitythat anyone in your family has
ever had.
It does not matter if it's 2 amor 4 am.
Shut up, get work done, blendin and do your absolutely best
(12:03):
and then wake up the next dayand do it better, and I think
for a long time that was all Iknew.
There are benefits to that, butthere's also downsides to it,
right, like the beauty of takingbreaks, the beauty of being
able to take a step back.
I think, or when I did that inmy career, was when I made
bigger jumps and became a betterversion of myself.
But yeah, moving to a newcountry, starting at Goldman
(12:26):
while doing business school, Idon't recommend it.
That had to be pretty stressful.
Yeah, sounds more romantic thanit sounds.
It was not fun.
Speaker 1 (12:34):
So you spent time doing a number of things related
to finance whether more of aneconomist's role or banking or
credit etc.
You then went into a coupleoperating roles and now, if you
look at QED, we are definitely ablend.
We're all investors now, but abunch of us have pretty sizable
operating experience and a bigpart of the value proposition is
how that helps us.
(12:54):
I mean, how would you say thatyour time as an operator has
kind of helped you now thatyou've moved kind of back into
the world of investing?
Speaker 2 (13:02):
When you're in banking, consulting,
post-business school, it's veryeasy to go around the narrative
of what it should be and whathappens in reality is very
different than what it should be, and understanding that I think
being one in pathetic two thefounders and entrepreneurs that
are in the journey, that goes along way, but also different
things to task.
A little bit of the operatingrole is building pattern
(13:24):
recognition over time, like whatare things that work, what are
things that don't work and whythey don't work?
What are tasks that you havedone, who has done other tasks
and why it has worked for themversus not for us?
So the operating role givesjust you an open eye of what is
possible versus what sounds goodand in some ways that's good,
(13:45):
and in other ways it makes usmore skeptical, like in some
ways we almost have to take outthe operating hand and say, hey,
if everybody thought it wasobvious, then maybe you wouldn't
be called innovation.
So I think it's a mix of beingable to do both, but definitely
think operating helps us becomemore realistic of what's
possible and also be betterpartners to those that are in
(14:07):
the journey.
Speaker 1 (14:08):
One of the things is a global fintech firm.
That we try to do is learn fromone market, try to apply those
learnings, where we can, toanother market.
But I think we've all learned.
When it comes to emergingmarkets generally, latin
American specifically, cuttingand pasting is pretty unlikely
to really pay off.
You're in a great position.
Having worked in both countries, having done multiple roles in
(14:28):
both countries, I mean I'd loveyour perspective on how that can
get done successfully.
How can you learn from modelsin the US and apply those
learnings in Latin America,while recognizing why is it so
difficult that you really can'tcut and paste models from one
country to the next?
Speaker 2 (14:44):
We've heard, sometimes, like Brazil, it's
five years behind the US.
Columbia is maybe a tiny bitcloser to Brazil and similar to
Mexico, right, and so that givesus the benefit of seeing models
that have worked.
And the first face ofinnovation in Latin America as a
whole has been the.
I am going to be the Uber ofColombia, I'm going to be the
WeWork of Mexico, whatever it is.
(15:06):
So we have seen a lot of thecopycats of the world happen in
working Latin.
As we enter the second phase.
It's where we're seeing some ofthose models not work, and
that's when I think having thelocal expertise adds a lot of
value, because I think, forexample, we see a lot of the B2B
CFO tools in the US able to getsignificant market share.
(15:29):
Right, they may end up stillbeing kind of the mid market,
but significant enough in size.
Where in Brazil, if you look atthe options of CFO tools that
companies have, the majority ofcompanies in Brazil are small
businesses similar to Mexico,similar to Colombia, and the
options that they have arehorrible but are extremely cheap
.
Where in the US, you may have acheap product-collective
(15:52):
strategy for that theme and itworks very well.
You're able to get market share.
We're in Colombia, mexico andBrazil, not so much right Like
we've seen companies that buildamazing products in the space
and haven't been able to getsignificant revenue, and a lot
of that it's because of howfragmented it is, how cheap
alternative are, but also justthe relationship and how to sell
(16:14):
.
And if you don't know thosenuances of fragmentation,
geographical splint, prices,just willingness to switch from
existing solutions, the US modelwon't work.
So I do think there are a lotof things that we have benefited
and we'll continue to learnfrom the US models, but as we
(16:34):
look through Mexico, brazil,colombia, I do believe that the
biggest modes and the hardestcompanies to build would be the
ones that can adjust to thoselocal nuances.
Speaker 1 (16:43):
Yeah, and it is interesting to look even at
QED's portfolio how some reallysuccessful companies were
clearly inspired by the US butare nowhere near direct cut and
paste.
I mean New Bank's a goodexample.
I think the first PowerPointthat David put together was the
building the Capital One ofBrazil.
But if you look at New Bank nowit barely resembles Capital One
, right, there's so manydifferences.
You see other models, quintoand Dar, just to revisit when we
(17:06):
talked about.
I mean I don't see how thatmodel would work at all in the
US and it's been a wonderfulsuccess, so truly a kind of
business model inspired byunique local conditions and
solving those problems.
So I mean I think that's been anice learning institutionally
over the years.
But I'm not sure I've seen, atleast within FinTech, any true
cut and paste models get a wholelot of traction.
(17:26):
Okay, I mean you've describedmemories when you were younger
of sitting around the dinnertable and having your whole
family sort of talk about howmuch money did you bring in that
day, making sure all of yourbills are going to be covered
some situations that many peoplelistening to this podcast may
not really have much experiencewith.
How does that background kindof influence how you think about
investing today, how you lookat the markets today.
(17:48):
How has that perspective beenhelpful for you?
Speaker 2 (17:51):
For background.
My broader family owns manysmall businesses, and when I
mean small, I really mean small,and what that means is they
know every supplier.
They've been with the samesupplier for 30, 40 years.
They negotiate payment datesfor every single product they
buy.
They know every client Buy now,pay later.
For them is pen and pencil.
X person came in, bought thismuch, and they will pay me when
(18:13):
they can, not through a fancyplatform, which all sounds
complicated when I say it likethat, but it is very much the
normal and typical story ofBrazilian asinis.
The majority of them areworking class.
They're the first ones to bethere to open the store.
The last ones to leave areworking week by week trying to
(18:34):
get the right cash flow to work,and they've been doing that for
30, 40 years and the generationbefore them did exactly the
same thing.
So, even as I see a lot of ourbefore their companies, or
companies that we're talking to,innovating in the B2B space, my
aunts and uncles, who are notthat old, are doing exactly what
my grandparents did, eventhough we have had stone in
(18:55):
Brazil for years, right, eventhough we've had solutions that
solve some of those problems foryears.
So I mean in one part that'ssad.
Right to see that we haven'thad a lot of jumps, even though
more technology is available.
But from our position isextremely exciting that we still
have a lot to do.
Fintech has not touched themajority of Brazil.
But that gets me to reallythink about willingness to adopt
(19:18):
right.
I think I mentioned early onthe B2B example.
Why is it that we have some ofthe technology available but
we're not able to penetratesmaller cities and multiple
segments?
And how do we do when price isnot the only thing right?
We have trust, we haverelationship, we have other
barriers that Fintech hasn't yetfigured out how to do that in
(19:39):
Latam.
So all of those things to meare exciting and opportunities
and it keeps me focused on thethings that we have yet to solve
.
Once you leave the São Paulobubble, those things become very
obvious.
Right, like, if you're only inSão Paulo, you may have the hey,
fintech is saturated with.
We've done what we can here,but the reality is the majority
of Brazilians don't live in SãoPaulo.
(20:00):
Like, we have many, many, manyother gigantic cities and
smaller cities where pen andpencil continue to be the way to
do it.
So I think we have lots of workto do still.
Speaker 1 (20:10):
You mentioned trust.
I think this probably isn'tsomething that most Americans
think that deeply of when itcomes to financial services.
Maybe the weekend where SVB hadtheir issues was kind of a
reminder that trust is stillreally important in the banking
system.
But when you go into LatinAmerica you know in Brazil,
probably even more so in Mexico,there's such an inherent
distrust of financial servicesand banks.
(20:31):
How do you see that kind ofplaying into fintech's rise and
some unique challenges andthings that founders in Latin
America need to overcome?
Speaker 2 (20:40):
This is a trillion dollar question, right?
We really haven't figured outyet a way to do it everywhere.
The one way I think about is wesee a lot of fraud in Latin
America and the players thatwere here before our fintech
portfolio companies were the bigbanks, and the big banks told
everybody don't give yourinformation to anybody, don't
send your money to anybody thatyou don't know.
(21:00):
And then here we come, thefintechs and the open banking
regulation and everything saying, hey, press a button and give
me all of your information.
I'm here to give you more moneyand more access to financial
access.
So in some ways, we are undoingthe right work the big banks
did for years of teaching peoplehow to protect for fraud and
protect their data.
(21:20):
So the way I think about it isfrom our standpoint we try to
help our portfolio companies onthe risk and fraud side be good
agents, right.
If we have more fintechs doinggood and doing the right thing,
then that with time will buildmore trust in the system.
But there are things that wetry to help our portfolio
(21:40):
companies not fight the curveright.
So the curve that I mean isaccess to information really is
how digitalized the country is.
Access to mobile information,how much education that
geography has, if you kind ofplay that forward, as we see
more and more people havingaccess to internet, having
access to phone, they'reconsuming more information
(22:02):
online.
They're trusting the peoplethat they don't see in front of
them.
Right In Brazil, we see a lotof that already.
We see the impact In Mexico.
There are a lot of places wherethat isn't true yet, where that
penetration of informationhasn't happened.
So we see a lot of Mexicocompanies that have in-person
sales strategies.
Versus in Brazil, you may havemore digitalized sales
(22:24):
approaches.
So we have companies in Mexicosaying, hey, instead of buying
this milk at the supermarket,open a bank account with me and
I'll give you a card right nowand then you can swap the card
right now and then you'll seethat it works instead of just
paying with cash.
Or hey, you should open aforeign bank account closer to
the border and I'm with youthere in person, right?
(22:46):
So I think the fintechs have hadto come up with creative ways
to build trust.
It is our job to make sure wecontinue to invest in good
agents, but at the end of theday, it's a progress and we can
skip the curve In some ways weneed to respect it and hopefully
help accelerate it as we can.
But part of having the localknowledge is not investing at
(23:07):
the wrong time of the curve.
Right, we've heard multipletimes oh, this business five
years from now would havethrived.
So how do we not get into that?
And understand where we are inthe curve is important.
Speaker 1 (23:18):
We've been fortunate to be one of the early investors
, as the fintech ecosystem wascreating a number of great
companies, whether New Bank orQuintuendar or Creditas or Kavac
, that have come out.
But you obviously work withmany of our companies.
I think we have 40 some oddinvestments in Latin America.
I wonder if you could talkabout a couple of the more
recent breakouts, a couple ofcompanies that we've seen that
(23:39):
really seem to be hitting theirstride right now.
Speaker 2 (23:41):
It's always hard to pick right what we see happening
in this quarter, so we have anproximity bias.
One I would mention is Cobra.
So Cobra is based in Colombia.
For those that don't know,Cobra enables other companies in
Colombia to connect theiraccounts and banks and
centralize all of their treasuryneeds into one platform.
The beauty of what Cobra isdoing is they really follow the
(24:03):
customer and started with onespecific solution within
treasury and, with time,listened to the clients were
asking for more ways to optimizecollections, reconciliation and
really do everything thattreasury touches, and we see now
that the team was able tolisten to that quickly, adapt
the roadmap quickly.
The numbers are reflectingright what they are selling to
(24:24):
the market is very muchresonating.
We tend to see more of Cobra inthe future, I think, both
penetrating the market they'rein but expanding now the
platform and what the platformcan do.
But to us, I think, comparingto Cobra this year and last year
, it was the team's ability tolisten, adapt and execute that
really got them to, I think,being this breakout list for us
(24:44):
this year.
So good job, Cobra team.
Speaker 1 (24:47):
As with many successful Colombian companies,
they also have their eyes set onMexico, if I'm not mistaken.
Pretty common transition there.
We see companies jumping fromone to the next For sure.
Speaker 2 (24:57):
I think the other one to mention and it's one that
I'm spending more time withlately is Warren.
Warren is starting in Brazil asa way to help Brazilians invest
better according to their goals,instead of really buying
products that the banks wereselling to them, because those
products were paying highercommission to those that were
selling.
In the past that was superobvious of a thesis, but in the
(25:20):
past year so many of theregulatory changes are helping
Warren because now there'stransparency that will kick in,
so Brazilians will actually knowmore how absurd the commissions
that they were paying beforewere.
Where before it was Warrentelling them hey, just so you
know this is absurd.
So I think that helps a lot.
Like you have more Braziliansin the past five, 10 years that
(25:41):
have mobile access.
They have more digital access.
We have more Braziliansentering the stock market than
ever and with this changingregulatory to give visibility to
commission and really the lackof alignment between who sells
your products and to those whobuy it, that should also
continue to help Warren.
So very excited to spend moretime with Warren in the next
(26:02):
couple months and always goodwhen the market changes are
aligned with what the company isbuilding.
Speaker 1 (26:07):
Well, let me highlight maybe our most recent
investment that I know you wereinstrumental in working on, a
company called Motu.
That again is another exampleof a business model this would
never exist in the US, but acompany that's been incredibly
successful in Brazil.
I wonder if you can lay out alittle bit of what they do and
what got us so excited about thecompany.
Speaker 2 (26:25):
Absolutely so.
Motu helps Brazilians be ableto rent a motorcycle and as soon
as they rent, they can startworking with a motorcycle, both
on e-commerce deliveries andother types of deliveries, and
with that, really empower thatperson to, as soon as they rent
a motorcycle, have a job.
The beauty of this business is,as we think about banking and
(26:45):
fintech in Brazil.
For those that don't know, yourcredit score is not driven by a
FICO score or a specific rangeof outcomes.
Here we have a concept that'spretty binary.
Like you either have goodcredit or you don't, which we
call the negativados.
A large part of the society areunder this negativados bucket.
For reference, if you are anegativado, you don't get along
(27:08):
from New Bank, for instance, ora traditional bank, which means
you don't have access to credit.
A lot of jobs won't accept youif you're part of the negativado
bucket, so Motu focuses on thatpart of the country, right?
So for me that was veryexciting, because you have a
large part of society that hasdaily needs, daily spends,
families to feed in a recurringbasis, but don't have a lot of
(27:31):
access to credit.
Motu enables them to work andthat really is something that
they will do every week.
They will do every monthbecause that's how they feed
their families and that's howthey feed their way out of the
negativado bucket.
So for me it's a veryBrazil-specific problem lack of
credit access to a large part ofsociety and they've built a
very complex business becausepart of the rental they also
(27:54):
guarantee maintenance.
They guarantee the ability thatthat bike will continue to work
.
So if anything happens, from alicensed standpoint, from a
maintenance standpoint, it'spart of the rental price.
So it's extremely complex tobuild.
It's even harder to do it in aprofitable way in multiple
cities.
As I mentioned, going intooutside of São Paulo is
(28:15):
extremely hard.
Most companies are not able todo it.
To have a CapEx intensivebusiness do it profitably is
very rare.
So when we looked at Motu,their modes were very clear.
It's hard to build somethinglike this today where capital is
not as available.
Their numbers were showing tous not only how the product
resonated but the way to buildis kind of what made it
(28:37):
successful.
So very excited to partner withthem.
We led their series that justclosed.
We recently announced andhopefully we'll be able to get
into even more cities in Brazilbut also expand to Mexico.
Lack of credit, inability toempower the very low base of the
economy is not unique to Brazilonly, but it is very hard to
(28:57):
build if you don't know how to,and I think the relationship
Motu has built in the pastcouple years will help them to
city Mexico as well.
Speaker 1 (29:05):
That's fantastic, and I think we've got some
statistics.
You know how much we've beenable to help some of these
people increase their earnings.
You can describe it as amotorbike leasing company.
While that is the product thatfacilitates it, that's not the
end goal, right?
The end goal is employment.
Speaker 2 (29:19):
I do think the interesting part of the Motu
business is that every othercompany that's in that segment
typically forces the customerinto.
You only deliver food for thiscompany or there's a lot of
exclusivity into how it works.
And the beauty of Motu is youcan use the bike for mobility,
you can use the bike fordelivery, you get as much as you
(29:40):
produce and how you produce isup to you.
So it very much is empowering.
As you think about it, you know, going from having no work to
now having flexibility into whenyou work and how you work.
Speaker 1 (29:51):
What are a couple of the trends that you're seeing
now and things that are reallyexciting?
You as you look to makepotential new investments.
Speaker 2 (29:56):
I continue to look at B2B Seattle tools.
I have not given up.
We have a lot to do and eventhough the go-to market is not
easy, someone will be able tobreak through and forget all the
way to do it.
Maybe that's doing it byvertical.
Maybe that's doing what COVIDis doing.
Very specific to one part of thesolution, we have a couple of
bets in the QED portfolio in thesegment already, but I continue
(30:19):
to look at this theme,especially because, with open
banking in Colombia and Mexicoand Brazil, we tend to see both
the BDC and the B2B get benefitsfrom having more data and data
that we didn't have access tobefore.
So, following the open banking,anything that really has been
impacted by regulatory latelyI've been going deeper, and
(30:39):
that's both insurancemarketplaces, anything that
benefits from additional data.
Compared to the US, insurancepenetration in Mexico, brazil
and Colombia is extremely lowand a lot of it is priced and a
lot of it is also willing us topay.
How do we break those problemsand get more Brazilians,
colombians and Mexicans accessto insurance?
(31:00):
It's something that we have yetto also figure out how to do at
scale.
But overall, everything thattouches energy solar we continue
to be very interested in that.
How do I spend capital marketsfor our fintech companies?
Continue to leverage thecapital market.
So it's the problem that wefeel very close to home how to
continue to expand the capitalmarkets.
Add more financial productsinto Latam that are not
(31:23):
available yet, or at least arenot available at accessible
prices.
So anything that touchesregulatory data in B2B has been
very much how I've been spendingmy time, but always open to new
models as well.
Speaker 1 (31:38):
Yeah, I mean the regulatory side is fascinating.
I tell just about everyone thatI think the most impressive
regulators in the world sit inBrazil and India.
The amount of progressivechanges to the market is
impressive, whether it's theadvent of PICS, the advent of
open banking, the advent of thereceivables registry.
Just moving so many thingsdigital and being able to then
(31:59):
create a bunch of businesses ontop of that is fascinating to
watch.
Now, I'm sure with anyregulators there's also things
coming out that we may not agreewith, but as a general rule,
it's nice to see them backinginnovation so aggressively.
Speaker 2 (32:10):
It definitely is, and I do think that the beauty of
the QED local presence helps alot.
So I'll give an example If youread the newspapers, with open
banking in Brazil, colombia,mexico, you get one picture
right Things are progressing,things are moving, everything's
going well and into perspectivethey are.
They are moving and things areprogressing and we have a lot of
(32:32):
good things happening.
When you are on the WhatsAppgroups with the operators
implementing those changes, yourealize how far we are yet from
implementation, from scalingthose technologies, from seeing
the real impact that they stillhave yet to have.
So, from a VC standpoint, Ithink that's very powerful.
So, again, you understand wherewe are in the curve of adoption
(32:55):
and where we are in the curveof the technology, so that we're
not only investing from whatyou read in the newspaper, but
you are closer to the productteam, closer to what actually is
possible.
So those are things we arepassionate watching, but also
keeping a cautious look to notjump before we can walk.
Speaker 1 (33:14):
Makes sense.
Well, let me move to our lastsegment here.
A little bit about you andmaybe some lessons that our
audience could take away.
So let me ask you a couple twinquestions.
I mean, how would you describeyour superpower?
And, conversely, what's onething that you wish you were
better at that you're working on?
Speaker 2 (33:29):
Superpower, I would say I like to go very deep in a
topic that drives me and keepsme excited.
What I wish I would do betteris that I could not go deeper so
I could come up with the sameoutcome without needing to go as
deep, which I think.
It's something I've gottenbetter over time, but it is a
(33:49):
progress.
Speaker 1 (33:50):
I'm the exact inverse right.
So you know, I think peoplekind of refer to me as Mr 80-20
rule and really good at sort offiguring out how to get the most
bang for the minimum work,maybe because I was crazy lazy
when I was a kid.
So for me it's been theopposite of when do you know
that, look, you need to goreally deep to understand
something and really driveyourself to go deep.
So I can very much relate tothe tension between those
(34:11):
haven't come at it from kind ofthe inverse point of view.
There's no one right style forevery situation, that's for sure
.
Speaker 2 (34:16):
It's probably good for a team structure, though,
that we work together.
Speaker 1 (34:20):
Definitely, definitely.
Now we did pull some of theteam members about what your
superpower is and Mike, our headof LADAM, said ironically he
thinks your biggest superpoweris just that you're unbelievably
helpful.
Just, you know you're willingto pitch in and help founders,
you're willing to do anything tokind of help them figure out
with introductions or helpingthem do sales or helping them
with strategy or what have you.
(34:41):
It's just kind of theorientation around doing
whatever it takes is, I think,at least the thing that he likes
most and that resonates too.
I mean, I think you know justthe ability to step in and
really help companies.
You know, vc definitely gets abad wrap at times of you know,
hey, here's a bunch of money andpeople say they're going to
help, but they don't really help.
I think we try hard to not livethat and I think you're a great
(35:02):
example of that.
So anyways, not exactly the oneyou pointed out for yourself,
but good to hear from the team.
If you had to share one tipwith young entrepreneurs, what
would that be?
Speaker 2 (35:13):
Going off of what we talked about Motu right, focus
on what is difficult to build,very hard to replicate, but,
most importantly, why are youthe right person to do it and
why do it now?
The combination of those thingsit's what really makes the
powerful company stand out andhave union economics they're
hard to replicate and have amarket share that's hard to
steal.
So that would be, I think, alittle bit the combination of
(35:35):
business model and thenpersonally, why they are the
right people to build.
Speaker 1 (35:39):
So if anyone's listening here and wants to
pitch you, how do they get intouch and what should they know?
Speaker 2 (35:44):
Email.
It is Camilla Veada atQEDInvestorscom, very hard to
spell.
So I would say go to the QEDwebsite and click on my name.
What they should know is that Iam quick on the feedback.
I guess it's something that notall VCs do.
That can be seen as positive ornegative, but I think at QED we
(36:05):
try to be empathetic to thefounders and give feedback.
So always happy to, even if youthink QED is not a go-fi,
always happy to brainstorm andgive how we would think about it
.
Speaker 1 (36:16):
And last question, and probably the most important
question of this entire podcastyou are about to become a
first-time mother.
Talk about your emotions as youlead up to that, that amazing
event here in just a coupleweeks.
Speaker 2 (36:28):
It is terrifying and very exciting.
We spent a lot of time talkingabout the opportunities in the
world, right.
I think that gives meexcitement to have new people
and my daughter come into theworld to help build and benefit
from those enhancements.
But at the same time we havevery crazy timing in the world
with lots of unfortunateconflicts happening.
(36:49):
So it is terrifying to put anew child in the world, but also
very exciting From a careerstandpoint.
It was the right time for me,so I'm excited, Looking forward
to it.
Speaker 1 (36:59):
Absolutely, but we are all very excited on your
behalf.
It looks like I'm going to getdown to Brazil a little bit too
late.
Probably miss you while you'reout, but I love Brazil as a
market for QED.
You've been an awesome additionto the team in the last year or
so and we definitely wish youthe best on maternity leave and
we'll be rooting for the daywhen we get you back.
Speaker 2 (37:17):
Don't worry, Bill, If you come to Brazil I'll give
you the address of the hospitaland you're happy to come help me
so I can nap.
I'll take that any day.
Speaker 1 (37:26):
I would love to.
We're going to put Nigel onbabysitting duty.
That's going to be fantastic.
Speaker 2 (37:32):
Sounds good.
Speaker 1 (37:32):
Awesome.
Well, thanks for joining Kamiand to all of our listeners, as
always, thanks for listening andtake care.
This has been the FinTechThought Leaders podcast your
window into the world of venturecapital and financial services
with today's digital disruptors.
Qed is proud to provide thebest FinTech advice you can get.
(37:55):
To learn more or to read thefull show notes from today's
episode, check outQEDInvestorscom and be sure to
also follow QED on Twitter andLinkedIn at QEDInvestors.
Thanks for listening.
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