Latin American Unicorns Give Birth to New Generation of Startups

A new wave of entrepreneurship is emerging, launched by the minds behind unicorns in the region such as Rappi, Mercado Libre, Nubank, Clip and Kavak

Former Rappi employees have created companies such as Tributi, Frubana and Truora.
April 04, 2022 | 05:59 PM
Reading time: 3 min.

Mexico City — After spending two years looking for ways to staunch the loss of money with their venture Ropeo, Alejandro Casas and his business partner Santiago Gómez were clear that they wanted to develop a technology for companies that would combine their expertise in margin measurement with their strengths in technology and finance.

The idea was defined, but they still needed to refine the problem they could solve with their next venture.

The two joined Rappi for four months as consultants, where they received what would become a kind of “‘master’s degree’ in payments, Casas told Bloomberg Línea. This allowed them to develop Simetrik, a payment platform orchestrator that allows companies to automate their payment processes.

PUBLICIDAD

With a first version, they began working with clients, such as Mercado de Pago, the fintech of Latin American e-commerce giant Mercado Libre, which allowed them to further refine their technological solution, and which is currently used in markets as far away as South Korea.

“If Rappi was the master’s degree, Mercado Pago was the PhD,” Casas told Bloomberg Linea.

Simetrik’s experience shows the effect of generating solutions through interaction with other companies in the entrepreneurial space.

The ‘Paypal Mafia’ Rides Again

This is not the first time that a new wave of entrepreneurs have emerged from their links or work with other companies that emerged in the entrepreneurial space, but was seen two decades ago in the United States, with the so-called ‘Paypal mafia’. From that company emerged a new generation of entrepreneurs such as Elon Musk, owner of Tesla and space travel and telecommunications company SpaceX.

PUBLICIDAD

The phenomenon was also perceptible around five years ago, with the German e-commerce incubator Rocket Internet and Linio. There, entrepreneurs such as Carlos García, co-founder of the second-hand car platform Kavak, or Carlos Salinas, one of the entrepreneurs behind Zebrands, best known for its Luuna mattress brand, collaborated.

Starting in 2020, a new wave of entrepreneurs is emerging from their connection with Latin American unicorns such as Rappi, Mercado Libre, Nubank, Clip, Cornershop and Kavak, according to Enzo Cavalie, CEO and founder of Startupeable, an information platform for industry stakeholders.

“We are seeing a feedback loop from the startup space,” he said.

He pointed out that over time we will see a more accelerated effect on other companies in the entrepreneurial ecosystem, and not necessarily unicorns.

The trend of new startups emerging from Rappi specifically has been noted by others, such as Pablo Navarro, a partner of Marathon Venture fund, who began to identify the trend in 2018, three years after Rappi was founded, and wrote about it on his LinkedIn profile.

Companies such as Tributi, which offers a system that helps generate tax returns, food delivery company Frubana or identity authorization company, Truora, were created by former Rappi employees.

PUBLICIDAD

Other companies created from links with Rappi are in the B2B business, focused on offering increasingly sophisticated technological solutions for businesses, such as the payment integrator Yuno or Simetrik itself.

Sons of Rappi, But Offering Something New

This effect is seen as natural by Juan Pablo Ortega, one of Rappi’s founding directors, and who says that high-growth companies have extremely strong teams and tend to create a second generation of entrepreneurs, acting as a fountainhead of entrepreneurship.

“Rappi has become a cradle of entrepreneurship, a company that not only develops business models, but of people who do things that would have been impossible before,” Ortega told Bloomberg Linea.

Ortega recently established Yuno, which raised $10 million in a seed round in mid-March.

PUBLICIDAD

Yuno, which allows its customers to manage multiple payment methods through a single connection, was founded with Julián Núñez, another former Rappi executive, who developed solutions for the company such as one-click payments, and headed its e-commerce business unit.

PUBLICIDAD

Ortega and Núñez identified in Rappi the problem of payment optimization and developed a solution, and later realized that their idea should have the necessary focus within an independent company.

“It was born out of Rappi, because we are Rappi employees. Not because Rappi is doing Yuno. It’s us coming out of Rappi to set up Yuno,” Núñez said.

For Ortega, the Rappi experience resembles an MBA, and he says investors see Rappi as the Stanford of Latin America.