Image Credit: Global66

WHY WE INVESTED

The Startup on a Mission to Transform Money Transfers (and Wallets) Across Latin America

In 2017, Tomas Bercovich and Cristobal Forno moved from Chile to London with a plan to learn everything they could from UK-based fintechs in order to launch their own in Latin America. They saw an undeniable opportunity. Consumers and small businesses across Latin America were badly in need of an alternative to the expensive and time-consuming route of moving money through traditional financial services like Western Union. “The most important thing about being in the UK was to live as a customer of all the fintechs there,” says Bercovich. “We saw where the value was and that helped us shape our vision for Latin America.”

They wanted to create a platform that facilitated instant and seamless virtual money transfers across currencies in Latin America. For that, they needed a partner with a payment network. But after many cold calls and LinkedIn messages, they kept getting turned away. “In the beginning, nobody wanted to give us a minute,” says Bercovich.

The co-founders persisted. They decided to launch their MVP alone and learn. It grew. Finally, they got the ear of a payment startup that saw something in their idea. “After knocking on a lot of doors, we found an open-minded fintech company willing to bet and start a partnership with a couple of entrepreneurs,” says Bercovich.

Global66 launched in 2018 across four countries with an initial focus on remittances. Since then, the company has raised more than $20 million in funding, completed more than $450 million in money transfers across borders, opened 400 different corridors for international transfers, and grown to a 220-person team working across nine countries. To date, more than 4,500 SMEs have signed up for the company’s B2B services. “We are building from scratch in multiple countries at the same time,” says Bercovich.

It’s an undertaking that requires a significant investment in regulatory and technology infrastructure and back-end work, involving collaboration with different banks and partners across countries, all of which have their own unique banking systems and regulations. To tackle the challenge, Global66 has a local country manager focused on the specific regulations and particulars of each country. In Argentina, for example, the country manager must navigate the use of four different local currencies. “You need to go country by country, regulation by regulation, which can take two to three years for each regulation,” says Bercovich. “It’s a huge barrier to entry, but we are getting through it.”

And then, of course, there has been the challenge of scaling an international business during a global pandemic. When COVID-19 hit hard across the globe last spring, the World Bank projected that remittances — money sent by migrant workers to their families back home — would fall as much as 20 percent. But by last summer, they had rebounded and reached record levels in countries across Latin America.

Remittances have always played a crucial role in economies across Latin America, with migrants living abroad, primarily in the U.S., sending money back home to support their families. Research has shown that remittances tend to be countercyclical, with migrants sending more money home the worse the circumstances in their home country get. With the pandemic came an ever-increasing need for people to send money abroad to relatives in dire economic straits — a demand that helped accelerate the growth of Global66. “COVID gave us a push,” says Bercovich. “We were able to handle that push because we had the infrastructure and processes in place.”

Once COVID hit, Bercovich and Forno quickly realized they didn’t have to hire exclusively in Chile. The company, which was made up of 40 people in March 2019, has since expanded to a team of more than 220 people spread across nine countries. “We hire the best person for the job no matter where they are, their age, their gender, their religion,” says Bercovich.

Bringing so many new employees spread around the world onboard has required a strategic approach. Each new hire is paired with an existing employee who helps them get acclimated, and Bercovich and Forno make sure to interview everyone before they’re hired to communicate the vision and purpose of the company firsthand. “When you’re hiring 100 people in six months, if you don’t get to know them at the start, you don’t get to know anyone in the company,” says Bercovich, who also holds monthly town hall meetings across the company to give teams a chance to connect.

While the company started with remittances, it’s quickly growing to include a full suite of financial services across currencies throughout Latin America. The remittance business is run by a team of around 30, but the vast majority of the company’s employees — some 170 people — are focused on building out future projects for the company. The goal is to be able to offer consumers a global account with a full range of products.

In June 2021, Global66 first launched a digital wallet in Peru and Chile that enables users to have money in both currencies and send money from one currency to another instantly, with one click — an undertaking they have since expanded to Argentina, Mexico, Ecuador and Brazil. The multicurrency wallet enables users to have their own country’s currency, currencies across Latin America, and eventually, those currencies will include U.S. dollars. “Many of the currencies in Latin America are very unstable,” says Bercovich. “We believe the U.S. dollar wallet will have a great reception from customers in Latin America. Right now, a U.S. dollar account is not available to regular people.”

Giving people the ability to move money from one point to another instantly and easily — whether that’s immigrants sending money back home to relatives, small businesses handling payments or freelancers traveling across countries — meets a huge unmet need. “We want to become one of the most important financial marketplaces in Latin America,” says Bercovich. “That is our goal.”

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