1Mby1M Virtual Accelerator Investor Forum: With Cristobal Perdomo of Jaguar Ventures (Part 2)

Sramana Mitra: Let’s do some examples of what kinds of things you’ve invested in. It doesn’t matter if it’s from the first or second fund. What I want to understand is how you think about these investments.

When did they come to you? What did they have when they came to you? What did you see in these ventures to really convince you and compel you to write the check.

Cristobal Perdomo: When someone comes to us when they’re doing a funding round, it might be too late for us. When you do a funding round, entrepreneurs are good at dressing up the company and showing you the right metrics.

If you get to that company before that,  you should get a better picture of what the company is like and what the founders do. One company that was our investment from fund one is Konfio which is a lending company in Mexico providing SME working capital loans. They’ve been accelerated by 500 Startups.

We met them while they weren’t in the 500 Startups program. That’s one company where we interacted a lot with the founder. We liked his approach. We liked his background. We just thought that the product might not be suitable because at that time, he was doing consumer finance loans. We thought that might be too risky because of the ticket size, margins, and economics. We helped him think a little about it.

It was the founder who came up with the idea of working capital loans. There was an immense market for that. There was no competition at that time. He had the right profile for doing it. He was an ex-banker with a Mathematics degree from MIT. We invested in that company from seed to Series C. We try to follow-on our companies with at least two rounds.

Sramana Mitra: Let’s do another one.

Cristobal Perdomo. Another company we invested in is in Argentina. It started out as a marketplace for cleaning services for the home. The problem that most of those companies run into is that the market doesn’t scale as quick as you would like.

There are problems with how to get cleaning people, or how you get paid. We saw that same thing happening to us. It’s a female founder. She had a unique asset in the amount of cleaners in the database. She had around 200,000 cleaners in the database and about 85,000 people paying for those services.

She realized had a unique opportunity to monetize and help bring financial inclusion to this incredibly underserved segment. We started providing very basic financial services at the beginning where we gave them a debit account. The bank’s services are targeted for large loans. Otherwise, it doesn’t make any economic sense for them. They were giving $5,000 loans to a person making $200 a month. We ended up bringing that in-house. Now, the only thing we do with the bank is create the bank account. That has become the engine of growth for the company. For the people hiring the services, they can pay through the platform.

Sramana Mitra: How about a B2B example?

Cristobal Perdomo: We have a company you’re familiar with – MercadoLibre.

Sramana Mitra: MercadoLibre was my client a long time ago.

Cristobal Perdomo: We have this company called Producteca, which is based out of Argentina. They have clients in Mexico, Chile, Uruguay, and Colombia. They integrate offline vendors to sell into marketplaces including MercadoLibre, Amazon, and Walmart.

Usually these vendors have a huge headache in integrating with these markets. Once they upload on the platform, they can distribute that to many marketplaces. When you go to a marketplace, you may probably not have enough SKUs in your catalog. We solve both sides of the equation. For the marketplace, we offer more SKUs in their catalog and for the vendor, more distribution channels.

Sramana Mitra: Is that subscription fee business model or a transaction fee business model?

Cristobal Perdomo: The company ends up taking about 1% of the revenues.

This segment is part 2 in the series : 1Mby1M Virtual Accelerator Investor Forum: With Cristobal Perdomo of Jaguar Ventures
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