LAVCA took the opportunity to check in with social entrepreneurs Juntos Finanzas and their Co-Founder Ben Knelman to learn about their expansion in Latin America and how they grew from a university class project to a company with global aspirations.
LAVCA: Please summarize your business.
Knelman: Juntos Finanzas supplies a suite of three SMS based personal finance tools that drive account activity and build savings for the underbanked. Juntos partners with Latin American banks and other financial institutions to help cash-based households track their spending and save towards goals. Our most popular product, a B2B platform, is scalable with dynamic intelligence that can support millions of individualized, automated conversations simultaneously in multiple languages, anywhere in the world. Our technology platform is a quickly deployable turn-key solution: it runs parallel to a bank’s IT system, removing any need for lengthy integration cycles. As bank customers begin using our tools, they start to form and deepen regular savings habits as they work toward a pre-set, concrete goal. Harnessing the power of behavioral research, our SMS program motivates the creation of new savings patterns, making it easier for users to save. The messages are designed to encourage users to build their savings in small amounts on a regular basis. As a result, not only do end-users build new behaviors they didn’t have before, but the bank experiences success: a lift in savings deposits and deeper engagement with their new customer base.
LAVCA: How did you come up with the idea for Juntos Finanzas? Had you started a company before? How does your background help you to succeed in managing this new venture?
Knelman: Juntos began as a class project at Stanford University. My team worked with night shift janitors on campus to prototype tools that would help immigrants with their personal finances. Over the course of a year, one of the janitors, Karina, told me she had used the tools we had created to track her money and had saved over $2,000. That was the moment that launched Juntos.
My background is in economics and user-centric product development. My co-founders Dante and Katie bring technical and international development expertise. We’ve won leadership awards from the World Economic Forum, Ashoka and Intuit.
LAVCA: Your product suite consists of three different SMS based tools, each with a different distribution model (B2B, B2C, etc.) Give us some details on each. Is there any one that has been most successful? What is the revenue model for each product?
Knelman: Our two B2C products focus on personal and business financial tracking, engaging with individuals and small businesses.
Our B2B product, as described aboveis our most popular and focuses on savings. Clients for this product are financial institutions (either commercial banks or Microfinance Institutions) that pay a subscription fee to deepen client engagement and account usage.
LAVCA: Where are the majority of your users based? What type of presence do you have in international markets? What type of partners are you working with?
Knelman: We have a small user base in the United States that we used to test and refine the product. This summer we will launch several large scale engagements in Mexico and Colombia (100K+ users). All of our partners so far are large, publicly traded Latin American banks.
LAVCA: Juntos Finanzas was initially targeted to the US Hispanic population but is now shifting to focus on Latin America. What was the reasoning behind this shift? What opportunities do you
see for products that engage both the US Hispanic and Latin American markets? Does Juntos plan to expand beyond LatAm?
Knelman: Last November, we were honored to receive the top prize at the G20 Financial Inclusion competition in Mexico City. We had always intended to bring our products to Latin America, but this prize gave us broad exposure to Latin American financial institutions who were excited about Juntos’ potential to address account dormancy among newly banked segments. The response was substantial enough that we moved forward with building our team in Latin America, hiring a Latin American Regional Director, Felipe Tibocha, who is based in Colombia. Now, we’re 100% focused on expanding in Latin America.
More broadly, we believe that banks around the world face challenges with financial inclusion and we believe that our company can scale to meet these demands globally.
LAVCA: What sort of financing have you received thus far? From whom?
Knelman: Thanks to several large cash prizes, Juntos has operated for almost three years on a small “friends and family” angel round of $350,000.
LAVCA: Does Juntos Finanzas intend to raise any additional funding? If so,when?
Knelman: Juntos is currently raising a seed round of $750,000. As of 5/15 the round is 50% full only six weeks after opening. All commitments thus far have been made by angel investors.
LAVCA: The past few years have seen an increase in awareness of social entrepreneurship and Impact Investing in Latin America. What kind of financial investors are you targeting at this stage? Are you focusing on investors who are seeking business models with a double bottom line? Are you primarily targeting local LatAm or international funds?
Knelman: We are pursuing investors who share our passion for global financial inclusion. We’re pursuing conversations with investors based in the US and in LatAm who have a focus on impact investing. Our team would benefit greatly by having investors join our team who have experience in scaling products across multiple contexts and countries.
LAVCA: How do you plan to put your next round of financing to use? Beyond capital, what additional benefits do you hope to gain from bringing in equity investors?
Knelman: This round of financing will allow us to expand beyond the bank partnerships we’ve already closed and reach more users in Latin America. We are already on target to reach approximately 100,000 consumers by the end of the year and we believe that we can reach 650,000 by the end of 2014.
We hope to find equity investors with deep experience in scaling mobile products in Latin America. Connections to financial institutions or Telcos are also a huge plus.
LAVCA: What is your most pressing strategic challenge right now?
Knelman: Scaling. Our products have proven to be highly effective at motivating savings behavior. Now, we face the challenge of bringing this product to orders of magnitude larger than ever before.
LAVCA: Where do you see Juntos Finanzas five years from now?
Knelman: We believe that Juntos has the potential to further financial inclusion around the world. We see Juntos operating across four continents, allowing banks to engage successfully with newly-banked consumers in emerging economies.
In this way, Juntos unlocks a second step of global financial inclusion. Mobile technology is rapidly giving the world’s unbanked access to formal financial services. Juntos creates the engagement necessary for them to be successful.