Building a Global Hardcore Financial Technology Company from Brazil: Ricardo Josua, CEO of Pismo (Part 2)

Sramana Mitra: Now we’re in 2012?

Ricardo Josua: 2014. I started another venture in finance providing structuring for asset-backed security. It was lateral to the business we were doing at that point. I also began working with EdTech on modernization for schools.

Sramana Mitra: In what capacity were you involved in these ventures?

Ricardo Josua: As a partner. It was a very interesting experience. In 2015, my former CTO was still at the first venture that I’d started. She left in 2015 and went to Silicon Valley to visit some FinTech companies. She came back all excited. They were benchmarking themselves against the incumbents. There are so many exciting companies with lower CAPEX and more modern microservices.

My first reaction was, “No way”. She was not only an extremely bright person, but she was also convincing. She kept showing stuff. She was a CTO at that point. She left and went back to school learning cloud computing basics and learning the ropes. She was learning alongside new entrants. She said, “I can do this now. I don’t require 300 people to do this.”

She eventually convinced me to join. I joined her while keeping my other businesses. Then in December 2016, I said, “This is getting exciting. If you want to do it, we need some institutional support because this is some serious business.” Not only the money itself, but this was dealing with other people’s money. We needed to be sure that it was backed by people who have big pockets.

We found this venture capital firm called Red Point. They were funding a lot of startups here. We started conversations in November. After about three months, we got a seed round.

Sramana Mitra: Based on what premise?

Ricardo Josua: There were two ideas. One was, there was this new trend in cloud computing and microservices – largely infrastructure for financial services still relying on mainframes. The existing rails for banking and payment were very old. The transaction after you connect to terminals relies on a protocol that was last updated in 1987. This is the backbone of everything we do in payments. It’s not different from other banking activities.

I said I wanted to do something that is able to provide newer technologies. At that point, we thought that the world would converge largely on digital wallets like Alipay. That didn’t turn out to be the case. The trend was clear that the current infrastructure was very old and crumbling under its own weight. It’s a huge addressable market, which is a concern for investors. We had expertise in the field. I had four other partners. I had worked with these four people throughout my career.

Sramana Mitra: That hypothesis checked out?

Ricardo Josua: Yes, not the digital wallet piece.

Sramana Mitra: The backend?

Ricardo Josua: 100%. More so than we ever imagined. This is something that people tend to gloss over. Hindsight is 20/20. Just the way we tell it to ourselves, going over the things that you got right and building back a narrative that makes sense based on current facts, I’m very conscious that I check assumptions and make sure to be as humble as possible. There are a lot of adjustments and missed bets.

What did turn out was that we thought we would start with more modern companies. As it turned out, larger institutions were already feeling the pressure from newer FinTech firms. Although we were getting business from smaller and newer FinTech firms, incumbents were starting to talk to us. We ended up becoming a relevant player in the enterprise market.

This segment is part 2 in the series : Building a Global Hardcore Financial Technology Company from Brazil: Ricardo Josua, CEO of Pismo
1 2 3 4 5 6