Our Investment in Apurata seed round

ApurataPrestamos

Better financial products for underbanked Latin Americans

Only 1 of ever 3 of Latin Americans have access to formal credit from banks, credit unions, or other formal lenders. The rest of Latin American adults, when in need of a loan, borrow from neighborhood lenders that can range from the wealthy neighborhood “Senora” to shark lenders with APRs above 100,000%. Apurata is born to bridge the information gap that keeps underbanked Latin Americans from accessing credit products from high quality institutions.

We are happy to announce our participation in Apurata Seed Round to help bring better credit products to the Latin America middle class

The problem

No credit history, No credit. No credit, No credit history. The vicious cycle of lack of access to credit is born primarily by middle class and lower middle class Latin Americans that have informal jobs, independent businesses, freelancers, or most people without a well established corporate job. When any of these people need access to financing, they are faced with a dearth of options.

The solution

Apurata addresses the need of the underbanked population by developing a product that is customized to meet the needs of each borrower, matching income flows and debt payments, that is flexible to repay, and that can be serviced in small increments that permit most borrowers from meeting their obligations. In addition, using propietary in-house technology, Apurata can credit score the intent and ability of each customer to complete their payments.

The opportunity

In Latin America, the estimated demand for credit from the underbanked population is $20 to $30 billion USD, with each country representing a $3 to $5 billion dollar opportunity in assets, basically equivalent to $30  to $40 billion USD in gross interest income.

Challenges

Fintech startups face multiple challenges, including regulatory issues and competition from well established players that have a significant funding cost advantage.

Changing how the lower middle class in Latin America transforms the lives of millions of people, enabling them to access credit in a secure and conveniente fashion.

The company is looking for developers and credit risk experts to continue their growth. Investors with extensive experience in the fintech sector that are interested in considering an investment opportunity in Apurata may contact us.

 

Advertisements

Investment Portfolio

Current portfolio

Apurata

BlazingDB

Conekta

MiMediaManzana

MejoresMudanzas and CotizayContrata

Nubity

Oja.la

Rocket.la

SoloStocks

Shopeando

TiZKKA

Vontravel (aka Vontrip)

Acquired / Exits

TasteSpace (SeMeAntoja and SinImanes)

The above portfolio is representative of the investments that Escala.VC has completed. Some of the investments could do business under slightly different names such SeMeAntoja (SeMeAntoja.com) or SinImanes (SinImanes.com). Our investments are typically completed during the early stages of the company, when they are looking to accelerate their growth post an incubator / accelerator program.


Our investment in Nubity seed round

Nubity server management

Managing your IT infrastructure is typically not your core competency, but it is Nubity’s

Think about Nubity as an IT version of TechCrunch Disrupt 2014 winner “Alfred”. Companies run their virtual servers on Amazon’s AWS, IBM Softlayer, Rackspace or a bunch of competing services that race each other at blazing speeds to commoditize processing power, memory and bandwidth. Some of our customers also contract services to reduce costs, optimize usage & monitor potential security issues. Nubity sits on top of all these services and manages infrastructure alerts and alarms, ensuring improved up time and consistent deployments–all in all a happier virtual/cloud server experience. Today, Nubity manages servers. Tomorrow Nubity will be your service provider to monitor and manage all your virtual infrastructure, including cloud servers and software platforms.

We are happy to announce our participation in the recently completed seed round for Nubity, Sysadmin as a Service.

The problem

IT resources, such as cloud servers, are becoming increasingly integral to any business but remain a noncore function. Small and medium businesses that use the cloud seldom have the necessary expertise and resources to manage this infrastructure effectively. The result is subpar utilization and/or expensive management (i.e. a $100/hr programmer may take a couple of hours to solve a server problem, for the same price a company could have delegated their server management for an entire month to Nubity).

The solution

Nubity provides the full spectrum of services helping small and medium businesses manage their IT infrastructure through a simple monitoring tool that groups and summarizes warnings and alerts across multiple server providers (multi-cloud). The monitoring tool also provides customers the opportunity to fully outsource their server management needs 24/7, allowing Nubity to provide comprehensive and preventative maintenance to all your IT resources.

The opportunity

Cloud computing spend in Latin America is in the $ billions and while growing overall, it is becoming increasingly affordable on a per unit of processing power (or per unit of memory). If businesses can delegate the management of these low cost servers to platforms such as Nubity, adoption of cloud computing will increase. Nubity can make money on both sides of the table: helping small and medium companies adopt cloud computing and helping cloud companies differentiate their offering based on service quality.

Challenges

  • Nubity is an outsourced service managing mission critical equipment and information. Operating errors could cause serious reputational issues
  • Low cost competition can emerge from countries such as India or via automated service platforms, that provide 80% of Nubity value for 20% of cost
  • Customer acquisition costs maybe high given SMB market fragmentation and sophistication level (i.e. ability of customers to carve out Nubity functions)

If you are an IT manager and want to reduce your System Administration costs, increase reliability and security, or want to delegate 24/7 server management to a specialized firm, consider trying out Nubity.

Investors with extensive IT and corporate sales experience in North America feel free to contact us regarding our potential next equity raising rounds as Nubity prepares to increase its participation in the North American market.

For additional information on the cloud server industry, and the importance of high quality customer support and system administration, see the recent Rackspace investor presentation emphasizing its “Fanatical Support” as its key differentiator vs other cloud companies.

Our investment in Tizkka angel round

TiZZKA fashion advisor

We want you to look your best everyday

With TiZKKA you will be able to get real-time fashion tips from your favorite stylists/fashionistas on how to look great for a date, an important meeting, hanging out with friends or even hitting the gym. TiZKKA keeps your fashion radar fresh with the latest styles, sharing with you looks from fashionistas you are interested in and helping you discover others to complement your personal style.

We are happy to announce our recent investment in TiZKKA angel round, a social photo-sharing app for fashion conscious people (and those fashionable in-progress) to connect, browse the latest trends or get advice on their looks from professionals.

The problem

People want to look great all the time, but unfortunately very few of us have an inner fashionista or one that can be reliably summoned on demand.

The solution

Today those looking for fashion advice share their looks on facebook, instagram, or snapchat and ask for friends feedback. Unfortunately current tools are not optimized for this purpose resulting in eclectic feedback that is ineffective and typically untimely.
With TiZKKA you can get instantaneous feedback from professional stylists and fashionistas, who have access to your wardrobe inventory and can help you match those red shoes you love with the best look for the occasion.

The opportunity

Today, the market for on-hire fashionistas is tiny. But by enabling people to access a stylist on demand we expect this market to expand dramatically. Further, the revenue opportunity for TiZKKA includes native advertising, lead generation and fashion intelligence. Overall, we believe TiZZKA will be able to monetize a slice of the global fashion business, which is worth hundreds of billions of dollars.

Challenges

As investors, we view the principal challenges of TiZKKA to be:
– improving user engagement levels while making the platform widely available to fashionistas and users globally
– the emergence of competitors (the idea is too interesting for only one company to tackle)
– absent typical Silicon Valley funding, maintaining an awesome user experience while starting to generate revenues

Congrats to the co-founders are Gabriel Roizner (@groizner) and Nathan Schorr (@nathanschorr) on a great product.

Download the app here.

More information at AngelList.

Should you have fashion experience and an interest in investing in this opportunity, feel free to reach out to us at: ideas@escalavc.co

Note: This note is not designed to analyze all of the investment considerations (including terms, traction, technology, product/market fit tests, etc) as some of this information is confidential.

Our investment in TasteSpace

TasteSpace was formed from the merger of SeMeAntoja and SinImanes in early 2013. We invested in October 2013–it was our second Latin American Venture Capital investment.

SeMeAntoja was started as a web based online food ordering marketplace (SeMeAntoja.com) in Mexico, similar to the USAs Seamlessweb or GrubHub, and quickly evolved into a mobile solution targeting students in upper middle class colleges in Mexico. It was natural for them to focus in Monterrey, Nuevo Leon.

SinImanes also begun life as a web based online food delivery marketplace (SinImanes.com) in Argentina and prior to its merger with SeMeAntoja focused on young professionals in Buenos Aires.

I first met one of the founders (Tavo Zambrano) when searching through AngelList for startups in LatinAmerica. Only a short year and half ago (early 2013) I was only able to find few (less than 5) Latin American startups listed there (today a similar search including Argentina, Chile, Colombia, Mexico and Peru results in 1991 startups to browse through). Together with Ignacio Guglielmetti, they formed a great team with the right skill sets and determination to grow in a highly competitive market that included Rocket backed Hello Foods and Pedidos Ya and was likely to see other heavy weights such as Delivery Hero, Just-Eat, and Movile enter the fray.

We believed that the leading position of SeMeAntoja and SinImanes held in Mexico and Argentina (respectively) was not only sustainable against the new entrants but highly covetable by them and decided to join a large seed funding round together with 500 Startups and NXTP Labs to further fund the growth of the TasteSpace (the combination of SeMeAntoja and SinImanes).

Our investment thesis includes:
a) Defensible leadership position in a digital marketplace
b) Demonstrated agility to innovate and stay ahead against powerful rivals
c) Agile and well rounded team (5 founders in TasteSpace)
d) Food delivery opportunity is enormous in Latin America and ripe for disruption

The main risks to this investment:
a) The team’s ability to execute a mobile first strategy ahead of competition
b) Over-investment (low ROI) by large players with the hope of buying share