Mexico City — Improving financial services in Latin America and bringing them into the 21st century is the mission of Pierpaolo Barbieri, CEO of Argentine fintech Ualá. The entrepreneur, who graduated in economic history from Harvard University, laments that “we are in a continent where there is a huge lack of financial inclusion”.
In the region, only between 30-50% of the population over 15 years of age has a bank account, compared to more than 90% in countries such as the United States, the U.K. and Spain, or approximately 80% in China, according to a McKinsey study.
Barbieri wants to change this, and with his fintech has created an increasingly robust digital financial ecosystem that operates in his native Argentina, Mexico and, since three months ago, in Colombia.
The 34-year-old entrepreneur wants fewer Latin Americans to be ‘condemned’ to cash, and have access to more competitive and transparent financial products.
“Latin America’s financial services lack a lot of transparency,” he said in an interview with Bloomberg Linea during the launch of his company’s new digital payments system for small businesses, Ualá Bis.
And in terms of digitization and financial inclusion in the region, Barbieri muses: “Mexico is lagging behind compared to Argentina, and Argentina is lagging behind compared to Brazil, so we are looking to have a truly plural product where nobody is left out because of their income level, their gender, their age, their preference, and that has not always been the case in the financial system”.
“We are a humble part of the solution, but we need to make it echo, to create a whole system to be able to solve the problem,” he adds.
Ualá became a unicorn (worth more than $1 billion) in August of last year after closing a $350 million Series D round led by Japanese giant SoftBank and China’s Tencent Holdings, which raised the company’s value to $2.45 billion.
How did it manage to enter the top 10 of Latin American unicorns? Barbieri says the key to his success is having the best team. “My job is to hire people who are better than me,” he says.
And aspiring to that goal is no mean feat as, in addition to his studies at Harvard, Barbieri also holds a postgraduate degree in history and economics from Cambridge University.
The Competition Steps Up
With the boom in fintechs in Latin America, Ualá competes with several solution providers that offer similar services; however, this is not a problem for Barbieri, but rather an opportunity for growth.
“We all have to work for there to be more capital, for there to be more competition and more options, because when there are more options the users win; we don’t want a monopoly, we want there to be competition because that improves us. I always say that competition elevates us, and that is something we always deeply believe, that is why we make an open product”.
Barbieri exemplified that with Ualá Bis in Mexico, “it is possible to send money to a Ualá account or to a BBVA Bancomer account or a Santander account, so it gives you the possibility to choose and take control of your finances”.
‘You Can’t Always Win In Capitalism’
Barbieri says the main challenge for fintechs is not competition, but a lack of capital. “The Latin American region is underinvested in, and we need to attract more capital”, he says.
“We have to understand that capitalism is not only always winning, but competing; it is winning and losing and that improves us as a society”.
In view of the lack of capital, Barbieri has not been satisfied with simply pointing out this deficiency, and which is why he created the venture capital fund 17Sigma, managed by his partner Bianca Sassoon, and whose mission is to look for projects throughout Latin America.
“The new generation of entrepreneurs I know will be better than mine,” he says.
So far 17Sigma has already invested in early-stage startups in Mexico, Chile, Colombia, Brazil and Argentina, such as Jeeves (which quickly became a unicorn), Foodology, Ontop, Flevo, Buk, Trela, Truora, Pixel, Tarken and BHub.
“The team is actively looking for new projects to invest in and bring in money from some of the best investors in the world such as Marcelo Claure, Paulo Passoni, Adam Neumann and General Catalyst, one of the best VC funds in the world to invest in Latin America,” Barbieri says.
What’s Next for Ualá?
In just four years, Ualá has launched integrated solutions related to payments, receipts, insurance, credit and digital payments with terminals for small businesses, and recently acquired Argentine e-commerce platform Empretienda.
And now Ualá has its sights set on Mexico.
“We are redoubling our efforts by launching a new vertical and creating new jobs,” Barbieri says. “We have more than 50 vacancies in Mexico alone and we believe that, in the future, Mexico is going to be as big or bigger than Argentina, which was our first market.”
He says that currently the Mexican market represents between 15-20% of Ualá's total business, and that it is growing much faster than in Argentina, and he estimates that in five years it will represent more than 50% of the company’s total revenues.
Ualá's services are currently available and operating in 31 states in Mexico, and 70% of users are outside the major cities.
In Mexico, 40% of Ualá's users are women. Barbieri says he is working to break down the gender barriers that exist in access to financial services in the country, and that he especially wants to digitize women entrepreneurs through his new business vertical.
He says he is very happy with the growth of his fintech in Argentina and Mexico, as well as with its recent launch in Colombia:
“We are convinced that the best is yet to come, but for now we are focused on growing in these markets.”