Pierpaolo Barbieri: evaluation

Transcript context

…In cultural terms, the startup market in Latin America still seems underdeveloped to me. A few days ago, I looked at the per capita income of Paraguay, which is not a country that leaps to people’s minds. It was about seven times higher than that of India — a highly imperfect comparison, but nonetheless much wealthier than India. Yet in the world of startups, India compared to Latin America — it doesn’t even seem close. What, culturally, do you think is keeping Latin America behind? Or would you dispute the categorization? I would say that, first of all, there’s a huge cultural difference in the proclivity of people to go into startups. I think it’s only become cool in recent years to become an entrepreneur in Latin America. Even when I grew up in the early 2000s in Latin America, it wasn’t very cool. A lot of the people that have gone abroad from Latin America stay abroad. They don’t want to go back. I lived 12 years in America and then returned to Argentina to start Ualá. Those two lead me to a more important point, which is the availability of capital. There’s a lot of people that want to deploy more capital into Chinese tech or Indian tech. Their relative stability, demographic profiles, and size of domestic markets means that every VC fund that loves risk wants more exposure into those. Whereas, for Latin America, that has lagged behind. When we started Ualá, I can’t tell you the amount of funds that told me, “Yes, we might sit in San Francisco. We might sit in New York, three, four hours away from Mexico, but we don’t look at Mexico. We don’t look at Brazil. We don’t deploy any capital in Argentina. Please don’t bring me your idea. You’re based in Argentina. That’s too unstable a market for us to invest.” In 2019, when we raised our Series C, it was the first time Tencent invested in Argentina. It was the first time that SoftBank invested in Argentina. Only the first time in 20 years that Goldman Sachs invested in Argentina in a real economy play. We represented 96 percent of all the venture capital funds raised by Argentine companies in 2019. Yes, 2019 was the year when Macri lost the reelection. We can have that conversation, but the truth is that there’s a dearth of capital. You cannot really have entrepreneurship and people willing to take the bet if you don’t have readily available capital. That has changed first in Brazil. Why? Because of its macroeconomic stability, generally speaking, and also because of its availability of a huge domestic market. A lot of entrepreneurs are saying, “Well, if nothing else, I’m just going to copy that American idea or copy that Chinese idea and bring it to Brazil. ” Finally, if people are willing to deploy the capital, I think Latin America is generally grossly underinvested outside government bonds and the energy sector. Are Latin American families somehow too happy, too supportive, and not nagging enough, because it strikes me that relative to per capita income, a lot of Latin countries seem happier than average, or happier than comparably wealthy Southeast Asian countries. Have you in some social ways engineered the family too well? And that you could just stay put in the family and be accepted, and no one kicks your butt across the room?…

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