Just before lunch, after a morning of fireside chats at LendIt Fintech LatAm, was the heavy hitter Pierpaolo Barbieri, CEO, and founder of Ualá.
A writer, historian, economist, and now entrepreneur, Barbieri’s Argentina-based company runs a financial management app for 3.5 million users and recently raised a $350 million Series D round at a $2.45 billion valuation.
“We live in a continent where over 50% of adults have never had a payment system that isn’t cash,” Barbieri said. “When we doom people to operating only in cash, we doom them the chase to build a credit history, or to save or access insurance, let alone access payments.”
“We thought to give accounts to everyone, give them a global payment system, in our case a global Mastercard, and using that, we are better able to offer investments, offer savings products, installment, offer credit products,” Barbieri said. “Since the last time we talked, we have expanded to offer those products, as well as merchant acquiring.”
It was the highest single funding round in Argentinian history, and because the fintech thinks forward in no small part. The Ualá userbase captures 22% of 18 to 25-year-olds in Argentina. So there’s still room to grow in a country with a young population, seven years younger than the US and China.
Ualá is a reigning financial super app, complete with connected Mastercard, bill payment, investment products, loans, BNPL, and insurance. Launched in 2017, the company reported that 65% of its users had no credit score before downloading the app but now have access to a fleet of financial services.
Barbieri said success came from not just building an entirely in-house tech shop but partnering with outside firms that could offer services like insurance better than Ualá could on its own.
“Our idea was to build a financial marketplace, but that marketplace does not need to virtualize every product,” Barbieri said.
Build with partner
“We have mobility insurance, health insurance, cell phone insurance pet insurance, those are the things we built with a partner because they need a better delivery mechanism, and we need to offer our clients a better way to get insurance. But, that doesn’t mean we need to offer those products ourselves.”
Ualá branched out and launched in Mexico this past year. Now the super app plans to add full banking with state licenses after applying to buy Mexican ABC Capital bank.
While expanding to Mexico and hopefully more, Barbieri said the biggest challenge has been regulatory compliance. Outside of the EU and its banking union of sorts, there are no regions where a banking license in one country can give you access to an entire continent.
While expanding to a new country, Barbieri said it is important to keep branding uniform while adapting the experience to the local customer needs.
“The biggest challenge is to acquire the license that enables you to provide the products to the customers that need them,” Barbieri said.
“The brand is consistent, but the experiences are different. Finance is very local, when we got to Mexico we built from scratch. We launched day one with things that took us 18 months in Argentina.”
It is easy to compare LatAm to China, a country that saw an entire economy shift from cash to digital in little more than a decade. Barbieri said the same revolution could be underway in LatAm, but regulation and infrastructure still need to change.
“I think it’s difficult to put a number on it, but the pandemic has accelerated the changes. There are many needed regulatory changes, especially tax changes needed in Latin America,” Barbieri said.
When I go to the U.S. I pay for everything with my NFC-enabled phone: so the question about QR and NFC doesn’t matter as much as ‘beat cash’ together with different options and competition, and better rails and I think Latin America is developing those.”
