Growing Organically: Sebastian Kanovich, CEO of dLocal (Part 3)

Sramana Mitra: You inherited 40 customers from AstroPay. Were you doing prepaid private label cards for these 40 merchants and then you switched that to something else? What was the case for the spin off?

Sebastian Kanovich: First of all, we didn’t want to have a company which was both B2B and B2C. We wanted to have one company serving the end users. That was AstroPay. Then we wanted to have B2B.

Sramana Mitra: You were doing both. You were doing the private label card business and then you were doing the B2C business.

Sebastian Kanovich: Yes. Those customers were already using the single API. They didn’t suffer any migration in terms of integration.

Sramana Mitra: What is the business model of your working with these 40 customers? When you started, you said you were profitable within a month because you were bringing 40 customers into the company.

Sebastian Kanovich: The business model is we charge them a flat fee similar to a credit card. It is a per transaction flat fee. Then we always collect local currency. We profit from a small spread in the currency.

Sramana Mitra: What were the metrics of the first year of the business? You said you’ve only done this for a year. What kind of metrics are we talking?

Sebastian Kanovich: I can tell you how much we grew this year, which is over 400%.

Sramana Mitra: In this one year that you’re doing all this revenue, have you moved beyond the 40 customers or are all this revenue coming from the 40 customers?

Sebastian Kanovich: Today, we have over 350 customers. We grew.

Sramana Mitra: What is the customer acquisition strategy? Do the merchants come to you? Do you choose the merchants that you want to go after? What is the customer acquisition methodology that you practice?

Sebastian Kanovich: We are present in all the conferences. We do a lot of education in emerging markets. We do have inbound merchants but our experience is that they tend to be not the most relevant.

Sramana Mitra: All 350 customers are e-commerce customers?

Sebastian Kanovich: I don’t know what you consider as e-commerce. Is Facebook e-commerce according to you?

Sramana Mitra: Facebook is not e-commerce. They do advertising.

Sebastian Kanovich: We do advertising companies as well. We do transport companies. We do hospitality companies. It’s tough to define the different tiers from one another.

Sramana Mitra: You have multiple different styles of Internet companies basically.

Sebastian Kanovich: Yes.

Sramana Mitra: You’ve given us a picture of this business. It’s a relatively short story. Is there something in your story that you would like to discuss that fits our purpose of and educational story? What have you learned from this business that you can share that other people can learn from?

Sebastian Kanovich: The fact that we are bootstrapped and that we were always sensitive of what the market was asking is something for entrepreneurs to learn. We are not on the VC mode. We choose our bullets very carefully. The other thing we’ve done in the last eight years is that we kept ourselves very true to our vision, which is doing cross-border payments in emerging markets. When I say we remain very true, we had 10 times more requests to go to US or Europe and we have formally declined all of those times. That’s something to be learned.

This segment is part 3 in the series : Growing Organically: Sebastian Kanovich, CEO of dLocal
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