Some entrepreneurs are born, others are made. Federico Casas identifies as the former. A lifelong entrepreneur, Federico started his first business at age eight, and hasn’t stopped since. As one of the first movers in Mexico City’s budding startup ecosystem in the early 2000s, Federico has watched Mexico and Latin America undergo a tech revolution and has been evolving his work alongside it every step of the way. After starting and selling multiple businesses, Federico dabbled in venture capital and now works on both sides of the table as an angel investor.
I sat down with Federico to discuss startup successes and failures, the evolution of the Mexican ecosystem, advice on raising capital in the Latin American market, and how to empower more people from non-traditional backgrounds to become entrepreneurs or investors. Check out this episode to learn how Federico exited two businesses before the age of 30 and went on to impact the ecosystem as an angel investor as well as entrepreneur.
“I have no fear of letting go of my businesses”
Federico Casas has built multiple businesses, and is able to move on quickly when an idea is no longer worth pursuing. That’s not to say he doesn’t know when to put his head down and work hard, but Federico is not an entrepreneur that falls in love with his business and doesn’t know when to stop. He sold his first and third companies (one of which was ridesharing company Aventones, acquired by BlaBlaCar) and continued to search for new ways to support the ecosystem using the knowledge he had acquired.
Federico isn’t afraid of building and testing models quickly, even if they fail. This mindset is still relatively uncommon in the Latin American ecosystem, so tune into the podcast to hear Federico discuss his startup successes and failures, and how they taught him to focus on his strengths.
In the US, most people gloss over payment processing because almost everyone has a credit card, Paypal account, or another simple way to pay. Developers use Stripe and can process in seconds. For consumers, Amazon even created one-click purchasing for some customers and physical buttons that automatically reorder your favorite products.
In China, paying is even easier; almost everyone uses Wechat or Alipay to scan QR codes and pay for everything automatically without ever taking out their wallet.
Startups have filled almost every niche in the payments industry, providing solutions for any vendor. Need to pay someone for something you bought in an online shop? PayPal can help. Setting up online payments for your business? Try Stripe. Want to compensate your roommate for your half of the gas bill? Venmo can help you do that.
We tend to take these solutions, as well as more traditional payment systems such as credit cards, for granted in the US. Only 6.5% of households in the US don’t have a bank account, although 18.7% of households are considered underbanked. If someone in the US wants to sign up for a Netflix account or buy a t-shirt online, they enter their credit or debit card information, and that’s it.
In Latin America, completing an online transaction is not so simple.
In the startup world, success always attracts copycats and competitors. As a result of past successes, Latin America’s food delivery industry is one of the most competitive in the world. Brazil’s iFood, a subsidiary of tech giant Movile, became one of the biggest players in the Latin American startup ecosystem, raising US$500M from Naspers and other international investors, in what many consider to be the largest round in Latin American startup history. iFood is growing incredibly quickly, registering 390,000 daily deliveries, a 109% increase from 2017. iFood’s CEO, Carlos Moyses, recently appeared on my Crossing Borders podcast to talk about the growth of Brazil’s biggest delivery company.
Rewinding back to the early 2010s, food delivery in Latin America had its first peak long before the region truly went digital. Latin America’s food delivery hit the news because Delivery Hero, a German food delivery conglomerate, secured international reach through a spate of acquisitions in the region.
In many ways, these deals spurred the next generation of entrepreneurs in the food delivery space and created many of the most popular apps Latin Americans use today.
Food delivery fits into a trend that is shifting Latin American shopping patterns online. When PedidosYa was founded in 2009 in Uruguay by Alvaro Garcia, Ariel Burschtin, and Ruben Sosenke, just 27% of Latin America’s population had Internet access.
Today, 66% of Latin Americans have Internet access, and in Argentina, Chile, Brazil, Ecuador, Paraguay, and Uruguay, more than 70% of people are Internet users.
Daniel Undurraga never thought he would sell even one Latin American company to a company in the US market, but with the recent US$225M acquisition of Cornershop, a grocery-delivery app he has officially sold two startups to US companies. His first startup, Needish, was the basis for Clan Descuento, a Chilean Groupon clone that was acquired by Groupon in 2010. Clandescuento’s acquistion was before most people in Chile had heard of startups!
Daniel is a lifelong entrepreneur with his share of failed projects, but ever since he and his business partner Oskar Hjertonsson found their niche in Latin American e-commerce, they’ve become an example for the whole ecosystem.
I sat down with Daniel on this episode of Crossing Borders to talk about the Latin American startup ecosystem, living and working across borders, and advice for founders who are launching and scaling in Latin America. We also discuss the backstory behind Cornershop’s decision to not raise capital in Chile and their experience raising money from funds across in Latin America.