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Today’s Soapbox opinion was written by Eduardo Morrison, a corporate lawyer with banking experience, specialized in crypto and blockchain.
Contxto – Due to its profound political and social crisis, Venezuela has seen an unprecedented migratory phenomenon in recent years. This massive outflow of people has resulted in the birth of a wave of entrepreneurs filled with hopes for a better future away from their roots.
We should feel proud of them for representing our country with their work, wit, and willingness to improve professionally.
Each entrepreneur has different motivations when it comes to starting a business. However, they share some characteristics that help with the success of the venture.
First, all of them have great determination and drive to achieve their goals.
Second, they exhibit an admirable fighting spirit in the face of adversity and an unmatched capacity for work.
Lastly, we have to keep in mind that most of them have a one way ticket. That pushes them to figure out ways to provide for and help their families.
We find innovators creating startups with disruptions and new business models in large technological capitals.
For example, it is worth commenting on Bogotá-based Valiu, which is a fintech founded in 2018, and whose CEO is Simón Chamorro from Caracas. They have a platform that allows for the transfer of remittances between Colombia and Venezuela. It has almost 40,000 users and works using blockchain technology as a vehicle for money transfers.
Thanks to the traction of this first product, they had the opportunity to participate in the prestigious Y Combinator program during 2019. They then raised a seed round for US$1.24 million.
The team members continue to grow and their main challenge is to reassure users that their money is well protected.
Recently, they have expanded their services by offering a digital vehicle to their clients that allows them to save in cryptocurrency-backed synthetic dollars, in order to protect themselves from inflation in their local currencies.
Valiu is using highly complex technologies to provide basic services to Venezuelan migrants, since the remittances sent by relatives abroad have become a lifeline for those who still live in Venezuela.
Although it is a fairly fragmented market, the opportunity is massive. It is estimated that around US$3.5 billion are sent in remittances every year to Venezuela and the number is still growing.
Also, the advantage for Valiu, is that Colombia is by far the country with the largest number of Venezuelans living abroad. According to the Colombian migration office, there are more than 1.4 million Venezuelans living in the country.
Beyond the companies founded by Venezuelans, it is also worth pointing out the value created by Venezuelans in pre-existing startups.
Going deeper into the blockchain field, we have IntoTheBlock. The startup specializes in creating analytics of digital assets using advanced statistical models with Artificial Intelligence (AI).
This American company was founded in early 2019 with Alfredo Terrero on its founding team. He is now the COO of the company.
Before starting with IntoTheBlock, Alfredo and his team had the oportunity to launch a small cryptocurrency-investment fund that failed to achieve the expected results, given that a few months later came the massive collapse of prices of these assets at the end of 2017. It held for most of the following year.
This experience made Alfredo realize about the lack of educational tools and data that allow the behavior of crypto-assets to be analyzed in depth.
With this premise in mind and with no time to lose, they decide to change gears and rethink their business model and focus on the financial information market creating what we know as IntoTheBlock.
Currently, its team is made up of 15 people, all from Latin America and based mainly in three cities (Miami, Buenos Aires, and Madrid).
Regarding the automotive sector, the Mexican startup Kavak is a wonderful case study. The startup was founded by three Venezuelans in 2016 who decided to venture to Mexico City. They now have the backing of major venture capital funds.
Carlos Garcia, Loreanne Garcia, and Roger Laughlin are rethinking the functioning of market for buying and selling used cars in this country.
According to sector players, each year between four and five million used cars are sold in Mexico in a market with an approximate value of US$60 billion. The main advantage is that Kavak offers an online platform that allows you to buy or sell cars from your mobile without leaving your home.
One of its biggest challenges continues to be making alliances with more banks and financial institutions that grant loans to customers that use its platform.
Due to the security measures recommended against Covid-19, the Kavak team believes there will be a significant growth in the acquisition of cars.
This industry is undergoing a prioritization of private transport versus public transport to comply with social distancing measures. However, they should pay special attention to keeping a low rate of returns from their customers.
Regarding its expansion process, recently the news broke that Kavak acquired a similar platform in Argentina, Checkars.com, where it will invest US$10 million in the coming months.
This event represents the company’s first foray outside of Mexico. This jump to a new country in Latin America entails an important process of understanding the new business to merge them into its corporate structure.
Certainly months of hard work await the founders of Kavak. But this international step is strategic as it gives them access to the Argentine market where around US$20,000 million in used cars are traded annually.
Lastly, innumerable solutions that cater to restaurants have been developed to feed people in every corner of the world.
An outstanding story in this industry is undoubtedly Goiko. A gourmet hamburger chain founded seven years ago in Madrid by the Venezuelan doctor, Andoni Goicochea. Through the company, he is able to give hundreds of Venezuelans their first job upon arrival in Spain.
Today, Goiko has 82 stores in 34 cities, and they are opening a new one at a rate of one every 15 days.
They fed 3.8 million customers in 2018 and that same year they reaped the fruits of their labor; L Catterton formalized the purchase of 80 percent of the chain in an operation that set the company at a valuation of €150 million.
Recently, they opened their first store outside of Spain, located in Paris where they focused their international growth. They are facing the challenge of recreating their experience outside the Spanish market, needing to adapt very quickly to the consumption patterns of each country where they decide to establish operations.
Recently, Goicochea has stepped back as CEO of Goiko, but maintains his role as President of the group. This allowed him to get involved in other businesses as an investor.
A well-known case was his entry into the shareholding of Antojos Araguaney, a food company in Spain. A few months later in January 2020, it was acquired by Empresas Polar, which is the main private agri-food group in Venezuela.
Venezuelans with an entrepreneurial spirit
Also closely linked to the restaurant industry, it is worth noting the thousands of Venezuelans who work as delivery people and couriers. Microentrepreneurs or freelancers who come to any city in the world and work delivering food through platforms such as Rappi, Glovo, UberEats or Deliveroo.
Getting involved with these apps serves as a source of initial income during the first few months of the exodus of many. People from all professions are seen providing such services.
These are doctors or lawyers who, upon arriving in other countries, cannot work in their field since they need a local license or certification from the country that receives them.
Backing this sector of delivery drivers, we find the case of Miguel Gómez and his fintech, Ribo Capital. It provides alternative financing methods to drivers to allow them to acquire their first motorcycle.
They currently have a presence in Peru, the Dominican Republic, and Spain. There they work mainly with clients ignored by the traditional banks of these countries for a variety of reasons but who also have good payment capacity.
In these cases, the motorcycle is their means of work and Miguel and his partners give them the first vote of confidence to improve their situation.
The future of the Venezuelan diaspora
Until a few years ago it was inconceivable that Venezuelans were going to lead the largest exodus in the region. But now, according to the United Nations, there are currently more than 4 million Venezuelans living abroad.
This is a very important factor aspect when starting a business since there is an excellent disposition among those outside to help each other.
Generally, when starting out, other Venezuelans play multiple key roles for the entrepreneur. They are the first to try the product, then they become customers and even help with word of mouth marketing by inviting or speaking about it to their entire circle.
It is important to foster that spirit of collaboration and help in whatever way we can so that success stories continue within that immense network of immigrants spread throughout the world.
I have only mentioned a few cases, but I am sure that there are many more. Let’s keep sharing their stories and learning from their values!
Eduardo Morrison is a corporate lawyer with banking experience who turned to crypto and blockchain a few years ago and hasn’t turned back since. He wants to be involved in the ongoing evolution of the technological ecosystem and the financial landscape.