Rethinking Financial Paradigms in Latin America

May 29, 2020

Rethinking Financial Paradigms in Latin America


At Timbi, we like visionary thinking. Especially coming from young entrepreneurs and founders. And being part of the ecosystem that enables and supports FinTechs across Latin America, we believe that FinTech solutions have the power to transform the uneven access to financial services across our complex geographies and extensive territories.

Last week, we had the pleasure of speaking with Valiu’s Co-Founder and CEO Simon Chamorro.We had already visited Valiu’s headquarters in the past and have gotten a glimpse at the culture within the scale-up at firsthand (you can find that post here if interested).

¿Why Valiu? ¿How was Valiu born? 

Valiu was born out of the confluence of a couple of motives/reasons. The first was my encounter with the world of crypto by coming close to an enterprise working with Ethereum. I was lucky because that was in 2014 when the industry was still at a very young age. Another thing is that I have made teams with great partners, all with very diverse abilities that complemented one another. We started working on Valiu as a side project, getting into the world of crypto, studying, and meeting at nights to figure out how to deploy a solution for the regional situation. As you know, I am Venezuelan and I had to grow up and see from up close the devastation and economic collapse perpetuated by hyperinflation. I saw from up close the fragility of our economics and monetary policies. That’s why I don’t really believe in our current democracies: democracy has failed and it’s easy to hack, we’ve seen its collapse all around. Countries’ economies worldwide are fragile and prone to inflation which ends up devastating societies in the long run [just like Turkey, Siria, Lebanon, Iran, Argentina]. Even here in Colombia, last year the dollar reached its highest peak level ever. I’ve always been passionate about finance, and about the dichotomy between finance and politics. That’s the kind of macroeconomic picture that you have to keep in mind when solving the complex problems South American countries have. Innovation allows society to leapfrog and tackle challenges with skill, reassuring humanity that most problematic issues can be fixed with the help of imagination and technology.

We found Valiu listed within the Refugee Investment Network and also learned that Valiu has collaborated with the Open Money Initiative. This tells us a lot about Valiu’s purpose. Could you expand on this subject?

Valiu’s mission is to enable financial prosperity for everyone regardless of country of citizenship, nationality, or status. We are working to help people acquire financial stability while becoming less dependent on monetary policies set by their countries. For realizing this mission our vision is set at creating a stable monetary union across the continent. We are doing this while providing access to safe dollar financial services to anyone, anywhere they go. Our services include savings, payments, and investment based on USD and built through crypto services.

You describe yourself as a technotopian idealist. Do you believe technology has the power to revolutionize governance? [Ex. Blockchain systems for voting and truly transparent electoral processes? An even more efficient and even deployment of public services?]

I think that kind of political and systemic change is set to happen eventually. We are currently under a generational convergence and sooner or later the technologies of the future will undermine our old legacy systems. But when I refer to technotopian I want to allude especially to the fact that technology has the power to help humanity. Technology helps to solve mistakes, finding solutions to real-world problems. Just think of issues like overpopulation, hunger, pollution, climate change. Technology has become our ally for confronting these challenges. Just like the internet gradually spread, technology is abundant and has the capacity to grow exponentially. And as costs related to technological advancements continue to reduce, we will start seeing the deployment of technology for solving global problems at scale. Technology has allowed us to mitigate things like the depletion of the ozone layer and can aid in improving clean air within our cities if we take climate change seriously. Humanity always unites when survival is at stake. We are currently living one of those moments. Our survival instinct unites us. And with the help of technology, we can tackle the challenges that threaten our existence.

What do you think of the FinTech ecosystem/community in Colombia? ¿In LatAm?

I think numbers in LatAm speak for themselves. Markets such as Brazil, Mexico, Colombia, Argentina, and many others are thriving and have experienced significant growth lately. New startups are constantly born to tackle the many problems across our nations. Regulation is a major issue and a very important one for reaching overall success. I believe regulation must remain at the forefront of our “battle” for most FinTech ventures to emerge. Colombians are fighters, they naturally know how to move to succeed and most have a native entrepreneurial spirit. And what’s even more important, Colombians have DNA made for adversity which helps them thrive even in disadvantageous conditions. The FinTech scene is only beginning to surge with ventures coming from Bogotá, Cali, Medellín, and other places across Colombia. Regulation up to the point as evolved favorably for the ecosystem. I believe that the risk for LatAm is the way in which regulations are going to evolve for the financial technology sector. The way the legislators regulate is still a risk. Proper regulation allows for economic prosperity but in our very own Latin American capitalism which if full of protectionism, regulation might turn around any time hurting startups trying to revolutionize access to financial services through technology. The great challenge is for regulators to help FinTechs play and luckily that’s beginning to change. 

What has been the biggest difficulties that you’ve had to face while doing business in Colombia? And in LatAm? What have been the greatest challenges? 

As most entrepreneurs in this region would coincide, there are three main challenges related to doing business in Latin America. First, access to venture capital is scarce (things are changing but there’s still much to advance). Second, comes regulation (and we’ve touched upon this issue before already). Third, is the issue of finding the right talent. Rockstar talent is difficult to find. Nonetheless, I think our situation also presents us with a great opportunity. Life is short and I tend to get bored very quickly. As a FinTech founder, I have found that issues around money are complex and not easy to solve. I have always felt passionate about solving currency and money issues. Money has to evolve and the time is now. And I have found and continue to find a great motivation for solving and providing solutions for this issue. And as a leader, I have recently realized the importance of being the voice of the team facing the external world, be it regulators, banks, or people in general. There is a need to educate people regarding the issue of money and the possibilities for social impact related to this issue are immense. 

¿How does Valiu impact directly on users?

We provide financial education to our users and put a great effort into educating our user-base. We want them to have a better full vision of their finances. We also aid them in achieving greater financial stability. We support them with easy, fast and affordable financial services while promoting financial inclusion for those underserved or unable to access because of their circumstances. We deliver a solution for their money needs while maintaining privacy but also being compliant with regulatory requirements. We respect the privacy of our users keeping up the technological capacities to successfully identify them. In a way, we are controlling the balance between privacy and compliance (because the government sometimes sees privacy as a liability). 

Where is Valiu headed?

Valiu is propelling a dollar-based savings system for users to store and save money in dollars at the best rates possible. Our next step is to enter Peru, building a cash-in-cash-out system for digital financial inclusion and establishing crypto-dollar trading services. With this approach, we can contribute in our very own way to diminish the vast influence of the U.S. Federal Reserve. As you know, the external debt of our countries keeps us in gridlock. Working with crypto-dollars will allow us to bring more stability to our homelands by helping people store value within an independent stable financial infrastructure not dependent on the external financial and monetary policies which have long kept us under siege.

Could you tell us a little about your experience at Y Combinator?

I have been asked about YC a lot lately. I think YC is an excellent accelerator. You don’t lose much time which sometimes happens at other accelerators and ends up being detrimental rather than helpful. YC understands what an entrepreneur needs and that is to work, work, work. Never stop working. We had a very exciting and also challenging experience sitting down to talk with some of the minds in YC. We received from them useful feedback for our venture, but most of all I think the full experience helped us grow as persons too. I would urge all founders participating in such endeavors to never lose track of themselves while trying to build your project. Don’t neglect your health, keep exercising, and try to maintain that work-life balance to avoid breakdowns. 

What message would you give to future entrepreneurs and founders in Latin America?

[Buy Bitcoin! Just kidding, but seriously]* To raise your chances at succeeding I recommend trying to learn as much as you can. Find a venture at a very early stage, join the team, and really try to expose yourself to the ecosystem. I would also recommend staying “scrappy” or low cost. That is key to knowing how to grow in a healthy and sound way. Try to gain traction from scratch, keep numbers upfront, and keep your costs low. That way, at the time of raising capital you won’t be then scaling uncontrollably, hiring too quickly and burning capital. Without real market differentiation, you are doomed to fail. And that differentiation is based on gaining traction through numbers, the real numbers behind the scenes. Know how to operate low cost and stay “scrappy”. 

If you want to learn more about Valiu and Simon check out a few of these links we have compiled:

  • Valiu: Leveraging crypto to reach the displaced url
  • Valiu: Refugee Investment Network url
  • Valiu’s Bitcoin dollars are changing remittances, starting in Venezuela url
  • Venezuela-Based Valiu Develops “Cryptodollar” to Combat Inflation url
  • Valiu adds crypto-dollar value to remittances in Venezuela url 
  • Bitcoin in Emerging Markets url
  • Three Reasons Why Valiu Picked Bitcoin Over Stablecoins in Venezuela url
  • Simon Chamorro, Valiu: Revolutionizing the Venezuelan Remittance Economy, Ep 98 url 
  • Fintech en Colombia: ¿Cómo Valiu está cambiando las remesas? url
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