LAVCA caught up with Germán Dyzenchauz, CEO and Co-Founder of GoIntegro, to discuss how taking on their first round of financing (after bootstrapping the company for 10 years), has impacted their overall strategy and growth.
LAVCA: Please summarize your business.
Dyzenchauz: GoIntegro is a corporate social platform in the cloud, bringing together a diverse set of engagement solutions for Human Resources. The platform combines a corporate social network with applications designed to manage Internal Communication, Corporate Benefits, Recognition and Rewards Programs, and Incentives Programs. The employee perks network leverages a diverse set of partners, with more than 2,000 merchants. Currently, GoIntegro has 110 employees and is used by over 250 clients in 10 countries, and reaches over 1 million users per day.
LAVCA: How did you come up with your business idea? What makes GoIntegro unique?
Dyzenchauz: We founded the company 11 years ago in Argentina in the middle of a terrible economic crisis because we saw an opportunity to reconnect an organization with their employees. Our first solution had the main objective of repairing the relationship between the company and the employees. By developing a corporate perks program, branded with company culture, organizations were better able to maintain employee satisfaction and retain talent on a budget. Since then, we’ve been developing different talent management solutions on the GoIntegro platform, creating a central point of interaction for the company and workers.
LAVCA: How does your background help you to succeed in managing your business? What did you learn from working at your family business?
Dyzenchauz: My father has been an entrepreneur since he was young so I grew up learning about how to manage a business. He founded a construction company in Buenos Aires and started by buying and remodeling old houses with my grandfather. He eventually grew the business and started developing new houses. Working with him was an inspiration and also a great opportunity to learn. I gained invaluable knowledge about all the pains and problems that are part of this journey and most importantly, I learned not to be afraid to take big risks. Growing up, I thought this was as a natural gift, but now that I am an entrepreneur, I understand that it is not something that is natural for everyone and sometimes requires work.
LAVCA: What sort of financing have you received thus far? From whom?
Dyzenchauz: After bootstrapping the company for 10 years, we closed our first round of investment in 2012. The round was led by Riverwood Capital, followed by Kaszek Ventures, with Francisco Alvarez-Demalde and Nicolás Szekazy joining our Board. Both have extensive experience scaling companies and are helping to grow our business in Brazil.
The innovations we are creating in the HR industry with our corporate benefits, recognition and rewards, and corporate social network solutions, are newer to the region and can create hurdles for adoption. However, organizations in Brazil are starting to change the way they are managing these processes and the market is so large compared to the rest of Latin America, that there is a real growth opportunity for GoIntegro. The funding will be used to create a robust local team to drive our sales outreach in the region.
LAVCA: How did you grow the business across Latin America and how did you expand geographically over time? Where are your offices now?
Dyzenchauz: We have offices in six countries in the region. We started our expansion in 2008, by opening offices in Chile and Peru, followed by Colombia in 2009. We then opened our office in Brazil at the end of 2010 and in Uruguay this year. For the first 10 years, the company grew 20% to 25% year-over-year. Overall, we have seen similar growth rates across all countries, but we anticipate the Brazil operations to grow 10x in 2013 alone.
After closing our first investment round, we had the chance to bring on more Sales Reps, which is driving higher growth rates (45% in the first year) and we expect to achieve between 50% to 70% in the coming years.
Looking ahead, we expect to start local operations in Mexico in the first quarter of 2014.
LAVCA: Who do you view as your competition (locally and globally)? What do you see as your competitive advantage?
Dyzenchauz: We are facing competition from local companies who are concentrated on just one country. But, they often have limited operations and generally only offer one solution to clients, which puts us at an advantage. A combination of our one-stop-shop of different talent management solutions, and our presence across Latin America with local support in each country, as well as local content in our corporate benefits and rewards platform give GoIntegro a clear competitive advantage to close regional deals.
Overall, global companies still have a very small presence in the region, but we anticipate that this will change in the next two years.
LAVCA: What are the benefits of working with both a global firm (Riverwood Capital) and a local firm (Kaszek Ventures)? How actively are they involved in management/operations of your company?
Dyzenchauz: When we started the process of raising a round, coming from running the business on our own for 10 years, a priority was not only to understand what kind of experience and business value an investor will bring to the company, but also to feel very comfortable working together on strategy and vision.
Both Francisco and Nicolas have a significant understanding of how to scale a business, including extensive knowledge about strategy, as well as experience with the finer details that are very important to accelerate growth.
As a Sillicon Valley firm, Riverwood Capital brings knowledge of SaaS business models, which is not easy to find in Latin America’s investment firms, who are generally less experienced in this area. On the other hand, Nicolas and Hernán of Kaszek Ventures have built one of the most incredible internet companies in Latin America (MercadoLibre), which is also an important strength to have under our belt. As an entrepreneur, I feel extremely supported by our partners.
LAVCA: What is your most pressing strategic challenge right now?
Dyzenchauz: Most recently, we have been working on fine-tuning our sales process. We are ready to scale the business with a large sales effort and partners in all countries. For us the challenge of creating a high performance inside sales team, is to understand the different cultures in each country and create a specific sales process and team for that region. What works perfect in Colombia, probably will not work in Brazil, so these efforts continue to take a considerable amount of our energy.