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Clip CEO Adolfo Babatz: Why investors should be excited about LatAm fintech

February 6, 2018
https://youtu.be/jE1MQyfhcuw

Adolfo Babatz, Co-founder & CEO of Clip, talks about the fintech opportunity in Latin America during the LAVCA Venture Investors Meeting in NYC in 2017.

Founded in 2012 in Mexico, Clip enables anyone to accept card payments, at any time, and anywhere by turning smartphones or tablets into a card terminal. Investors in Clip include Alta Ventures, American Express Ventures, Angel Ventures, Endeavor Catalyst, Fondo de Fondos, General Atlantic, Sierra Ventures & SV LatAm.

This content is made possible with support from Omidyar Network and Telefonica Open Future_.

Telefonica Omidyar

TRANSCRIPT

  • English
  • Spanish
  • Portuguese

Adolfo Babatz (Clip): In the case of the US, often tech companies are going to take a niche of a particular market—in loans, or payments. It might be a very big niche, but it’s a niche, after all, because the vast majority of consumers and businesses are already served.

In the case of emerging markets, in Latin America and specifically Mexico, the vast majority of consumers and businesses are still not served. So, there’s an opportunity for a fintech company to actually take the entire market. It creates a kind of winner-takes-all dynamic, which doesn’t happen in US fintech, because the market is mostly already served.

So, I think that’s unique. That’s what we’re seeing in Mexico, at least in the case of payments: The market is shifting towards a winner-takes-all dynamic. And it has to do mostly with the fact that you have very low acquisition costs and very high customer lifetime value. So the economics are really good.

Adolfo Babatz (Clip): En el caso de Estados Unidos, a menudo las compañías de tecnología ocupan un nicho de mercado específico: en préstamos o pagos. Puede ser un nicho muy grande, pero es un nicho, después de todo, porque la gran mayoría de los consumidores y las empresas ya están atendidos.

En el caso de los mercados emergentes, en América Latina y específicamente en México, la gran mayoría de los consumidores y las empresas aún no están atendidos. Entonces, hay una oportunidad para que una compañía de fintech realmente tome todo el mercado. Crea una especie de dinámica de ganador que se lleva todo, lo que no ocurre en fintech en EUA, porque el mercado ya está atendido en su mayoría.

Entonces creo que eso es único. Eso es lo que estamos viendo en México, al menos en el caso de los pagos: el mercado está cambiando hacia una dinámica que el ganador se lleva todo. Y tiene que ver principalmente con el hecho de que tiene costos de adquisición muy bajos y un valor de vida del cliente muy alto. Entonces la economía es realmente buena.

Adolfo Babatz (Clip): No caso dos EUA, muitas vezes as empresas de tecnologia vão ter um nicho de um mercado específico – em empréstimos ou pagamentos, seja o que for. Pode ser um nicho muito grande, mas é um nicho, afinal, porque a grande maioria dos consumidores e das empresas já são atendidas.

No caso dos mercados emergentes, na América Latina e especificamente no México, a grande maioria dos consumidores e empresas ainda não são atendidas. Então, há uma oportunidade para uma empresa de fintech realmente levar todo o mercado. Se cria uma espécie de dinâmica do vencedor, que não acontece no fintech dos EUA, porque a maior parte do mercado já está servido.

Então eu acho que isso é único. Isso é o que estamos vendo no México, pelo menos no caso de pagamentos: o mercado está se movendo em direção a uma dinâmica de vencedores. E tem que ver principalmente com o fato de ter custos de aquisição muito baixos e um valor de vida de cliente muito elevado. Então, a economia é realmente boa.

Clip CEO Adolfo Babatz: Why investors should be excited about LatAm fintech was last modified: February 21st, 2018 by Editor
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Quote

  • This is not the first and will not be the last measure that we are going to take. We are serious about changing the rules and having a better environment for entrepreneurship to thrive…

    Clip CEO Adolfo Babatz: Why investors should be excited about LatAm fintech was last modified: February 21st, 2018 by Editor

    –Mariano Mayer
  • We are very careful about not overcapitalizing companies.

    Clip CEO Adolfo Babatz: Why investors should be excited about LatAm fintech was last modified: February 21st, 2018 by Editor

    –Alan Patricof
  • Making an investment decision comes down to the people.

    Clip CEO Adolfo Babatz: Why investors should be excited about LatAm fintech was last modified: February 21st, 2018 by Editor

    –Alex Rossi, Managing Partner, LIV Capital
  • We look at the longevity, the fit, deal attribution by team member. We look at their performance as well as how they focus and what their expertise is…What differentiates them from their peers?

    Clip CEO Adolfo Babatz: Why investors should be excited about LatAm fintech was last modified: February 21st, 2018 by Editor

    –Adam Ritter, Vice President, Harbourvest
  • The most helpful thing that an investor can do for an entrepreneur is connecting them to great people, and then taking them to experts and connecting them to early customers and partners.

    Clip CEO Adolfo Babatz: Why investors should be excited about LatAm fintech was last modified: February 21st, 2018 by Editor

    –Cyrus Massoumi
  • We never do a deal alone, never, not one single deal in our entire portfolio are we the only investor. We always have someone else.

    Clip CEO Adolfo Babatz: Why investors should be excited about LatAm fintech was last modified: February 21st, 2018 by Editor

    –Alan Patricof
  • Empathy is one of the things we value a lot.

    Clip CEO Adolfo Babatz: Why investors should be excited about LatAm fintech was last modified: February 21st, 2018 by Editor

    –Michael Nicklas, Partner, Valor Capital

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