The fintech platform transforming financial services distribution in Brazil

Quona Capital


Franq is democratizing access to financial services for SMEs and consumers by pairing innovative technology with an independent broker network

When Paulo Silva was in his late 40s, he traded his suit and the hustle of banking in São Paulo, Brazil for swim trunks and pristine, white sand beaches. His new life in Florianópolis was tranquil; unaccustomed to the ample spare time he now had, he found himself picking up old hobbies like windsurfing, as well as exploring new and innovative ideas.

“While I loved the work I did, my kids were grown, so I had decided to give up my corporate life,” says Silva, who had started his career in banking as a teen, and who held senior executive director posts at Brazil’s major banks, including Citi, HSBC, and Santander Brasil. “It just felt like too much, so I moved to an island to ‘figure it out.’”

While Silva was enjoying island life, the banking world was only a phone call away. It was 2017, a year that would be remembered for the cascades of layoffs occurring across the Brazilian banking sector. The layoffs highlighted a changing reality: a significant number of Brazil’s branch networks were closing, leaving consumers and SMEs without ready access to needed financial products and services. And with the branch closings, layoffs left a surplus of bankers who needed help finding their next jobs. Many turned to Silva for advice, as they saw in him someone familiar: an accomplished, ambitious veteran of the banking industry who was a little lost in figuring out his “next big thing.”

“Most of those people had like 20 years of experience at their banks,” says Silva. “They would give me a call before they got home with their layoff news, asking me if I could help.” Silva found a way to assist these callers: he hired a recruiter who supported the bankers in sprucing up their resumes, setting themselves up on LinkedIn, and preparing for job interviews. Once they were ready, Silva would make introductions.

Some bankers found their next jobs — but the demand-side problem remained. Who was going to help consumers and SMEs who were used to going to a trusted single provider to manage their financial lives? Silva began to see this as a larger issue, and one in which his new network of bankers could help.

Creating solutions through partnerships

As it happens, the city of Florianópolis in Santa Catarina is also one of Brazil’s major innovation and tech hubs. Silva got a glimpse of what was brewing in the fintech world while living on the island.

“When working for a big corporation, I didn’t clearly know what was going on the outside,” says Silva. “I was surprised by the speed and the quality of products that [fintechs] are able to put in the market — it’s amazing. But the challenge they have? It’s distribution.”

Somewhat ironically, as bankers were getting let go from their branch jobs and seeking new opportunities where their expertise would be valued, Brazil’s central banking system was investing in and rolling out a number of solutions. “With fintech and open banking, there were tons of different products happening everywhere,” he says. “But they were not connecting with consumers and SMEs.”

Building products is one thing, but getting them into the hands of people who need them is an entirely different matter. As an experienced banker, Silva had been distributing products his entire life. He realized that the crucial missing piece in getting most new financial services products to users wasn’t marketing — but partnerships.

“Everybody was talking about digital distribution, when the reality is that the fintechs were looking for partnerships to sell,” says Silva. “Marketing and distribution through Google was crowded, expensive, and wasn’t bringing the right customers.”

Good products were out there, and they could meet the needs of consumers and SMEs. But matching consumers with the products they needed when said products were offered by different providers was a challenge. Silva knew customers needed someone they could trust who could help them wade through the growing morass of financial offerings.

Democratizing access to financial services for SMEs and consumers

Knowing that he was onto something, Silva cherry-picked a team of seasoned professionals to help transform the initial ideas he had into a company. Daniel Ferretti, who built his career in Marketing and Digital Channels for Sicredi and Santander, was onboard from day 0 to lead growth. Shortly thereafter, they were joined by Gustavo Hartmann, whom Silva had known for decades. After a successful career in the UK, Hartmann had recently returned to Florianopólis to start his own tech company before joining Franq as CTO.

After a year of conceptualizing, developing and fine-tuning the initial idea — which was living on hundreds of Post-it notes scattered across a wall in Silva’s home — the three co-founders made the decision to launch Franq. Franq is a single fintech platform that connects autonomous banking professionals and independent financial advisors (IFAs) to over 50 providers of financial services, including fintechs, banks, and insurance companies.

Today, Franq’s network of IFAs tap into their wealth of experiences to find better products, ranging from credit, lending, insurance, and checking and savings accounts from multiple providers, and offer them to their existing customer bases as well as to new customers. In turn, SMEs and consumers can gain access to these products through the Franq open banking platform. The end result? Convenience, cost savings, and products that are best aligned with consumers’ particular needs, at no added cost to the users.

Giving the customer the power of choice

Today, there are over 7,000 personal bankers on Franq’s platform, which has originated over $6.45 billion in credit. With more than150 financial products to choose from, IFAs via Franq become a one-stop-shop for their customers. “It gives the customer the most powerful thing: choice,” says Silva. “On the other hand, how can you use your power of choice if you don’t know how to choose?”

Where customized solutions were previously only offered to high-net-worth clients, Franq is democratizing financial services for consumers and SMEs, 70% of whom are served today by only five major banks. The dearth of comprehensive offerings from major banks leaves many Brazilians without access to better options. Plus, more than 40% of Franq’s IFAs are focused on the SME segment.

“When you need a mortgage, you’re going to ask the right person to help,” says Silva. “When you need a small business loan, you ask the right person to do that. So with Franq, we keep the relationship managers taking care of their customers. And you have a team of technical people taking care of every single product when they need it.”

Helping independent banking professionals thrive and tap into their true worth

As many of these veteran banking professionals left their big banking careers with little experience in making a go on their own, Franq invests in guidance and training for bankers and IFAs, all year round.

“Many of these banking professionals have never worked for themselves, and they’re used to being part of the institution,” says Silva. “We not only connect them to products in the fintech space, but also point out that the most important part of the platform is the banker. We say, ‘don’t advertise Franq, advertise yourselves.’ “

Franq also helps banking professionals understand their value, and serves as a coach by shaping them into independents. The platform offers A-to-Z support to IFAs as entrepreneurs, and provides training using tech, relevant content, and a marketing and tax advisory board working in tandem with senior product specialists. Plus, a daily broadcast each morning keeps them looped in on product updates and relevant industry news.

Forging ahead in creating a new segment

As the first and largest autonomous banking network in Brazil, Franq is creating a new segment in the banking industry.

Franq has helped over 120,000 individuals and 35,000 SMEs gain access to financial products, and is positioned to double its reach by 2023. The next step? To expand and enhance its existing data and engineering teams and to continue to support its growing network of IFAs.

The Franq team is proud to be building a segment that didn’t previously exist. “Nowadays a banker may not be as scared about losing their job because they know they have work to do through Franq,” says Silva. “For us, transformation in financial services is about understanding customer needs and making the right match where everyone can win.”

Quona Capital co-led a $12 million seed round for Franq in October 2022. Other investors included Globo Ventures, Valor Capital, Broadhaven Capital, FJLabs and Caravela.

Disclaimer: Quona portfolio companies were selected for profiles based on objective, non-performance-based criteria for the purpose of illustrating the types of investment made by Quona funds and their impacts. These profiles are being provided for illustrative purposes only, in order to provide examples of the idea generation, research, and thought process of Quona investment teams. No representation is made as to whether or if the investment ideas represented in these profiles have been or will be profitable. It should not be assumed that Quona will be able to identify similar investment opportunities in the future, or that any such opportunities will be profitable. The above statements include the opinions of the Firm and are for illustrative purposes only. There is no assurance that any trends depicted or objectives described in Quona profiles will continue or become successful.



Quona Capital

Quona Capital is a venture firm specializing in financial technology for inclusion in emerging markets. Learn more at quona.com.