Daniel Bilbao, Truora: Fighting Fraud in Latin America, Ep 80

Originally from Cali, Colombia, Daniel studied in the US and started a company in Silicon Valley before realizing he wanted to us his experience to solve a pressing Latin American problem: fraud. Truora, a startup that provides instant background checks, was born to fight that problem.

I sat down with Daniel for this episode to talk about why he decided to go after the Latin American market instead of Silicon Valley, how he raised money from Y Combinator, Accel, and Kazsek Ventures, and why he wants to tackle the problem of fraud in Latin America. We also discuss why he based his company in Cali and the lessons he learned building and working for three startups in Latin America and Silicon Valley. Magma has been supporting Truora since before YCombinator, so I’m especially excited to share the story of this ambitious founder from Colombia on the podcast.

Why background checks are a big deal in Latin America

Background checks are customary practice in the US for reasons of compliance. Background checks are essential in Latin America to avoid fraud and criminal activity. With the rise of the gig economy has come the challenge of hiring and managing massive teams of contract workers; Truora makes it possible to run a background check on new employees in a matter of 30 seconds using a smartphone. Leveraging his team and experience, Daniel pushed Truora to early revenue by doing deals with Rappi, Uber, and Davivienda on a bootstrapped budget.

Truora is not stopping at background checks; Daniel wants to solve the problem of fraud from the ground-up. Find out how Daniel plans to grow Truora across Latin America while staying lean in this podcast episode.

If I ever got a tattoo, it would be of my flag.

Daniel Bilbao used to swim on the Colombian national team, so it would be hard to find someone more patriotic about his own country. Daniel returned to Colombia to build Truora after realizing that Latin Americans are on the cusp of realizing the enormous opportunity that they have to build global companies that compete with the US, Europe, and Asia. He even spends part of his Sundays advising founders from the region.

Daniel is honest about the problems he sees in Latin America, but he quickly repositions them as opportunities. Check out the rest of the podcast to hear how Daniel plans to build a winning team across Latin America with Truora, starting from Cali, Colombia.

We work in the United States of Latin America

Latin American markets are more similar than they are different, says Daniel. He contendes  that they’re closer to Texas and California than people might think. His advice: do multiple geographies, and do it right away. If you feel you are spread too thin, the problem probably lies in the product or the team, rather than the growth plan. In this episode, Daniel explains why he thinks it is better to spend $50K to launch and learn in a new market than to go for huge revenue right away.

Although Truora is still in its early stages, Daniel has seen a number of startups grow, and a number of startups go down in flames. Bipi, a car rental startup where he worked, laid off hundreds of people (including him) before it failed. Find out what Daniel learned from previous startups and how he applied his knowledge to Truora in this episode of Crossing Borders.

If you have a good team and nothing else, apply. You can always apply again.

Daniel has been through YCombinator twice, first with Paladin Cyber, then with Truora. Paladin went on to raise $4.5M after YC and other Silicon Valley Investors and Truora recently raised $3M from Kaszek Ventures and Accel. He knows what accelerators and investors look for and is always willing to share is advice. His tip for Latin American founders: learn to tell your story, but go straight to the point. No BS. If you are a returning listener to this podcast, you may remember that Marta Forrero (UBits cofounder) gave similar advice about her own experience in the Y Combinator interview.

Daniel is a top resource on how to get into and get the most out of Y Combinator. Listen to the rest of this episode to hear his tips on raising money from top US and Latin American VCs, and how to turn that investment into revenue.

Daniel Bilbao has been fortunate to work closely with top startups in the US and Latin America in times of success (his identical twin was an early Rappi team member) and times of hardship. His only regret was that he didn’t start innovating earlier. Check out Daniel’s story to learn how and why he made his way from doing business in Silicon Valley back to his home country to fight one of Latin America’s most entrenched problems.

Show Notes:

  • [1:30] – Nathan introduces Daniel
  • [2:14] – Why is fraud a big problem to solve in Latin America?
  • [7:08] – The difference between background checks in LatAm and the US
  • [9:42] – Growing up in Cali, Colombia
  • [12:48] – How startup failure led to Paladin Cyber
  • [14:10] – Where did you get the attitude to give back to your home country?
  • [16:14] – Lessons learned in Daniel’s childhood
  • [19:32] – Why Truora likes to hire very junior engineers
  • [20:21] – Lessons learned from Beepy
  • [22:38] – How does experience with Beepy and Rappi influence Truora?
  • [25:37] – Why transparency is important at a startup
  • [26:14] – How to build the Truora team
  • [27:16] – How does the app work?
  • [28:35] – How to raise money for Truora
  • [30:51] – Top tips for companies applying to YC
  • [32:41] – How to get the most out of YC?
  • [33:30] – Advice for founders raising money in LatAm
  • [35:36] – What’s next for Truora?
  • [36:53] – Daniel’s recommended resources
  • [38:12] – Daniel’s advice to his younger self

Resources Mentioned: