This article delves into the experience of Oriol Ros i Mas working in the Latin American market, the evolution of the fintech landscape, and current technology trends. The executive and investor provides valuable recommendations for startups looking to expand in this region and offers his insightful perspective on the sector.
The beginnings: Latinia’s experiences and challenges entering the Latin American market
Latinia’s journey, starting as a notifications app, began with a clear vision: recognizing the immense growth potential despite the obstacles ahead. At the time, the decision to focus on Latin America was not easy, but the promise of a developing market with a large number of underserved consumers was irresistible.
Mobile phone penetration (SMS) was much higher than internet access, in contrast to what was happening in Europe. They always targeted corporations, but it was the banks that showed the greatest interest in real-time messaging. These entities didn’t just want a service; they wanted to buy a license for the software.
This challenge pushed Oriol and his team to set prices and establish the conditions to offer this innovative product as SaaS. Oriol noted that the burst of the “dot-com” bubble slowed their progress at that time, as many executives saw them as a group of youngsters playing at being entrepreneurs in the wake of the innovation trend.
By 2008, with a dozen banks and rural savings institutions in their client portfolio, they had to decide whether to focus their efforts on Europe or Latin America. They started exploring banks in Central Europe, but with Spain on the verge of financial rescue, one of their interlocutors asked: “What is it like living in a country with 25% unemployment?”
Challenges that fostered the startup’s learning: socioeconomic, cultural, and go-to-market
They then decided to shift to Latin America, hoping that the technological potential of the region would outweigh the economic situation. By then, large companies such as Telefónica, Santander, and BBVA had already established a presence there. “Our doubts arose from the business model and the level of financial inclusion and digitization,” said Oriol.
It was a socioeconomic challenge, translating not only into the opportunity to serve the large percentage of the population without access to financial products but also those who only had a bank account.
He added, “Just because we speak the same language, doesn’t mean the go-to-market strategy is easy.” The particularities of each Latin American region must be deeply understood when doing business. It’s a mistake to assume that concepts and processes can be extrapolated. “It’s a kind of economy of scale that doesn’t work,” he emphasized.
Selling through channels didn’t work for them, despite working with multiple sales teams—integrated systems teams—that typically served banks. The reality was that price sensitivity (Oracle and IBM adjusted prices locally) was crucial for closing deals.
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Fintech developments vs. in-house developments: What are the benefits?
Our CMO wanted to know how Oriol viewed the current situation compared to those early days. He explained that they were competing against the idle resources of the bank and the large giants of the North American market. This continues to happen today, and in their negotiations, he always explained to the banks: “What will happen if you develop internally is that my first update will be far superior. Why? Because it draws from the needs of 15 other customers with similar requirements to yours”.
“We’ve spent six months collecting insights, and that first update will be much better than your in-house development”, our guest explained.
The product roadmaps of fintechs are clearly enriched by this, which gave them a boost in Latin America. The traction of their product increased, and there came a time where they were confident that banks no longer saw trusting them as a risk.
“As they say, no one gets fired for buying from IBM. But the first purchase from a fintech company may seem like a risk, though it’s not,” the expert assured. That inflection point, which every startup goes through, is based on offering certainty. As Juanjo mentioned, “In the end, although we are technology companies—Latinia and Coinscrap Finance—what we sell is trust.”
“More than trust, I’d say that B2B sales are entirely relationship-driven because the person in front of you is not risking their own money, they’re signing a contract with the bank’s money on the line. If something goes wrong, their career could be seriously affected. You can see the fear in their eyes. You have to reduce that fear.”
Key lessons from Latinia when closing a deal with a bank
After discussing commercial relationships and sales processes, the conversation shifted to the technical and economic aspects. Once the long negotiation processes—sometimes lasting up to 2 years—are over, our guest talked about two other fundamental aspects in the case of Latinia: integration and discounts. (Spoiler: never give them away for nothing!).
Years of experience bring wisdom, which is why they have long ensured to guarantee revenue milestones when signing an agreement. The implementation of a project can take a long time, and “that’s a desert for a startup.” The “discount tunnel” is another stage that must be navigated, but Oriol is clear about one thing: “What am I getting in return for giving you this discount?”
One of the things that doesn’t require much resource dedication from the bank but is very useful for its tech partners is the possibility of publishing a success case. Gaining their approval to share a few key figures from the collaboration and the product results provides significant exposure and boosts trust with potential clients. “It’s a matter of credibility,” said Oriol.
And that’s the end of the first part of our Meets! We hope you enjoyed it. We invite you to listen to the podcast or watch the full video. Also, follow us on LinkedIn, where we will soon be publishing the second part of this exciting interview.
Thank you for your attention!
