Originally from New Delhi and Kathmandu, Ishan Sinha grew up on the move. Because of his Father’s job, he lived in six countries on three different continents until finally settling in Connecticut. Today, as Vice President of Point72 Ventures, he still normally spends lots of time on planes, but that’s been on hold in light of COVID-19. Under normal circumstances, he travels several times throughout the year to explore markets in the Middle East, Northern Africa, Southeast Asia, and Latin America.
Point72 Ventures is the independent, early-stage investment arm of Steven Cohen’s $16B hedge fund Point72 Asset Management. The fund –always seeking to be at the forefront of new technology– naturally contacted a lot of startups, which eventually turned into investable businesses. Their first investment in Latin America was in Pierpaolo Barbieri’s fintech Ualá. Ishan, with his international background, jumped at the opportunity to work on the fund’s new global endeavors.
In this episode, I sit down with Ishan to talk about his nomadic upbringing, Point72’s core thesis and decision to explore outside of the US, and his insights on the differences between traditional investing and venture capital. We also discuss how Latin America compares to Southeast Asia, and Ishan gives advice on how to approach the Latin American market.
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.
You would think that in 2018 you could pay almost any bill online. But that’s not the case in many Latin American countries, although the process is becoming easier.
While companies such as Xoom, Multicaja, and Nequi are streamlining online payments in Mexico, Chile, and Colombia, respectively, many people still find themselves queuing up in three-hour lines to pay their utilities, credit cards and other bills every month.
One expat in Mexico explained how he used five different payment methods for his electric bills over ten months because the rules changed each time.
So how do people keep track of their payments and wade through the bureaucracy each month to pay their bills? What happens if you send a payment late or the providers send the bill to the wrong tenant? It depends on the country.
Note: Portal Finance recently closed a $200M deal with one of Latin America’s largest investment banks, BTG Pactual, to provide financing to small and medium businesses across Latin America. They were also winners of Magma Partners’ Latin America wide Fintech competition in 2016.
After growing up in the Bay Area, Diego Caicedo left Popayán, a small town in Colombia, at age fifteen to go to university in Bogota, then dropped out two semesters before finishing his degree in engineering. Why? He had a plan to build a massive, vertically-integrated coffee company that bridged the US and his native Colombia. Three years later, a strong La Niña year wiped out the coffee industry and he was back at square one.
Diego has never been one to give up after his first failure, though. In this episode, we talk about how he rebounded after closing his first business, how Diego became an entrepreneur in Chile’s mining industry, then how he realized the opportunities in Latin American fintech and started Portal Finance to help small businesses get liquidity when they need it. Diego is a lifelong entrepreneur with a lot of lessons to share with people just getting started, so check out this episode of Crossing Borders to learn more about how Diego does business across Colombia, Chile, and the United States.