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.
At Magma Partners, we work with people who share our values, whether they’re the founders we invest in or the mentors and investors we bring on to our team. We hope to create lifelong relationships with the people we support.
For this episode, we’re featuring eleven Magma entrepreneurs –some are members of our portfolio, and others are from our team– who have appeared on previous episodes of the Crossing Borders podcast to share their advice to founders from Latin America on how to get started.
As a startup, raising money outside of your region can be intimidating. You may think there’s too much competition in a new, foreign market or that it’s too difficult to compete from abroad. However, getting investment in Latin America can be just as challenging, if not more difficult, than raising funds in another country such as the US.
Before pitching to an investor, you’ll need to do a significant amount of research. You must prepare yourself by answering questions that address everything from “Why are you solving this problem?” to “Is your company a fit for the VC fund?”
Here are ten questions startups should prepare to answer before meeting a VC.
The insurtech industry worldwide received over US$2.3B in investment in 2017, a 36% increase from the year before. From 2014 to 2017, the Latin American share of the insurtech market grew from 1% to 7.6%, and the number of insurtech startups increased by 114% in 2017. This uptick is logical as insurance plays a vital role in stabilizing emerging economies and minimizing risk.
Latin America is underinsured, despite steadily growing incomes over the past two decades. Currently, insurance penetration, calculated as the ratio between insurance premiums written and GDP, hovers between 2-4% across the region compared to 6.2% globally and 7.3% in the US, the world leader, in 2015. Latin America still lags behind the rest of the world in insurance coverage.
As Latin America’s most developed economy, Chile is also the most developed insurance market in Latin America. Earthquake insurance is required for all mortgages and after Chile’s 2010 earthquake, a group of mostly international insurers paid out claims that reached around 4% of Chile’s GDP.
Compared to the rest of the region, Chile has a relatively open and well-regulated insurance industry. While Brazil has become a top player in insurtech, the insurance industry in Brazil is mired in complex regulations. Still, growing middle classes across Latin America have yet to invest heavily in comprehensive insurance policies for a host of reasons.