Through a statement shared on their social networks in early December, the Colombian-Venezuelan company Valiu announced that they will stop operating before the year ends.
Simón Chamorro, the CEO and co-founder, said: “We had to face very great challenges and risks, which for a new and small company like Valiu became very difficult to overcome.”
Chamorro mentioned three specific factors that led to this decision: Venezuela’s economy became dollarized; the start of the pandemic; and the steep increase of crypto adoption for transactions.
The spike in crypto adoption was likely a problem for Valiu as it was still too small a company to keep up with the rapid increase of crypto users in Venezuela. The company had only raised US$6.5 million in two seed rounds, and its investors included funds focused on early-stage startups such as Y Combinator and Castle Island Investors.
Valiu was created in 2018 by Chamorro, Alberto Niego and Omar David Barinas Orjuela; it was a fintech that offered several online financial services for Venezuelans nationwide and abroad. Besides facilitating payments for businesses within Venezuela, it helped to reduce remittances devaluation caused by hyperinflation in the country.
In May 2020, Chamorro explained to Contxto that Valiu’s solution to this particular problem: a dollar account backed by Bitcoin. With these Valiu dollars (USDv), they aimed to prevent remittances sent or received by Venezuelans from becoming useless once they reached their destination due to the inflation problem.
For Venezuelans who sent remittances from Colombia, Valiu allowed them to connect their bank accounts or deposit funds through associated institutions, and then see them reflected on their app.
According to the company’s statement, December 15 will be the last day that users of the application can withdraw their USDv from their accounts.
From Remittances to A Comprehensive Fintech Solution
The socioeconomic situation between Venezuela and Colombia explains why this relevant fintech was created three years ago.
Initially designed to solve the issue of remittances, Valiu was working on other services to make digital transactions easier in Venezuela. At the time of its closure announcement, Valiu offered services to more than 3,000 Venezuelan businesses. In August 2021, it reached 450,000 transactions and 100,000 clients.
It also launched a pilot program with Rappi to benefit this app’s delivery workers in Colombia and other countries. Rappi is a source of employment for many Venezuela immigrants in South America. The company never revealed the number of Venezuelan delivery workers on its platform, but Chamorro believes that it’s at least eighty percent of their Colombian fleet.
In Colombia alone, there are 1.7 million Venezuelan migrants, according to data from the country’s immigration authorities.
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