Pioneering fintech in Uruguay, with Mateo Infantozzi

In one way, it's slightly surprising that Mateo Infantozzi Riembau was a fintech founder. Not because there were no signs of entrepreneurial thinking, but because his early successes came from the travel industry. More so because, at the time, "there was little room for startups in Uruguay and even less room for fintechs". But local innovators have changed that quickly. Now "fintech is sexy", and Mateo and his co-founders played a significant role in that change.

You can find Prezzta at https://www.prezzta.com/ (or on LinkedIn)

You can find Octa at https://www.octa.dev/ (or on LinkedIn)

You can learn more about myself, Brendan le Grange, on my LinkedIn page (feel free to connect), my action-adventure novels are on Amazon, some versions even for free, and my work with ConfirmU and our gamified psychometric scores is at https://confirmu.com/ and on episode 24 of this very show https://www.howtolendmoneytostrangers.show/episodes/episode-24

If you have any feedback, questions, or if you would like to participate in the show, please feel free to reach out to me via the contact page on this site.

Oh, and if you’re in need of more banking podcasts, you can find related content at https://blog.feedspot.com/banking_podcasts/

Regards,

Brendan

The full written transcript, with timestamps, is below:

Mateo Infantozzi 0:00

From the borrowers' side, it's 'I need the money' but for the lenders, we had to build this trust by showing all the cards, it's 'sometimes you are going to win, sometimes you're going to lose'. We were not granting any loan. It's your race, and you have to trust that I'm going to do all my efforts to get that money for you.

Brendan Le Grange 0:28

On the 2nd of July 2010, I was one of 84,017 people inside Soweto's Soccer City stadium, and if I had to guess 84,000 of us were rooting for Ghana. South Africa had already been eliminated from the tournament, so they were the de facto home team and we were buzzing. Ghana had gone into the lead seconds before halftime then Uruguay had equalised, and now we were deep into extra time and the Black Stars had been awarded a free kick in an attacking position on the right.

The initial cross was flicked on, leading to some scrappy play in front of goal until suddenly, as if scripted, the ball bounced kindly for Dominic Adiyiah, who smashed it home to put Ghan into the semifinals... and I won't sanction any other version of history.

Until recently, that's all I knew of Uruguay. But no more. Welcome to How to Lend Money to Strangers with Brendan Le Grange.

Mateo Infantozzi, co-founder of Prezzta and co-founder of Octa.dev, welcome to the show. It's not often that I get to speak to someone who's currently building two different fintechs, so I'm really looking forward to some great stories today.

But before we get into the meat of those, let's talk about your background and the experiences that have shaped you. What was your life like pre-Prezzta and pre-Octa?

Mateo Infantozzi 2:01

Hi, it's a pleasure to be here. I was born and raised in Montevideo, Uruguay, here in South America. I've worked for several US companies so I have that corporate background in the travel industry. I spent about 10 years working for those corporations and 2010 one company bought the business unit that I was working for, it opened a new office here in in Montevideo, so I was responsible for that opening - it was kind of my first startup, let's call it that way.

Brendan Le Grange 2:44

Yeah, looking at your CV, I would have guessed entrepreneurship in the travel industry - what was the spark that actually led you into peer-to-peer lending and the broader FinTech space instead?

Mateo Infantozzi 2:56

Well, that's a good question, actually. In 2014, Pablo Gagliardi, we had been friends since we were kids, my co founder at Prezzta, reached out to me with this idea of peer to peer lending. We saw that this was something that was going on in the US and UK, especially with Lending Club. At that point, I got 100% involved with the project started, studying the market, studyin the legislation, finances... we realised that there was an opportunity, and we went for it.

Our first round of funding was from family and friends, and in 2015, we launched Prezzta as the first peer-to-peer lending platform of Europe, and probably, I think, was the 2nd or 3rd in LATAM.

Brendan Le Grange 3:53

And that was now seven or eight years ago. If you cast your mind back to that time, what did the Uruguayan lending landscape look like? What were the alternative lending products that consumers would have been having to choose between?

Mateo Infantozzi 4:10

Well, the Uruguayan lending market was very traditional at that point. And I think we helped to change this.

Banks and some big financial institutions were the only ones allowed to lend money. Although lending money, it's absolutely legal in Uruguay, there are certain things that you have to do.

Uruguay, it's a small country, we have around 3.5 million citizens. There's a market of around $3 trillion in loans every year. We have a very good percentage of internet access around 80% of the time and a huge number of smartphones. Today we have around six million smartphones in the entire country. And it's almost double the number of citizens. So it's kind of crazy.

In 2012/ 2013 was a great year for the Uruguayan economy. In 2014, the economy started to go down, but softly, and by 2015 the economy was going down down, there was a huge need of fresh money. And by around 2016, we had a lot of people needing for money. And on the other hand, we had people that wanted to lend money to people.

Brendan Le Grange 5:40

You brought Prezzta to the market at a quite a volatile time and a new concept, first in country, one of the first in the whole continent, so a new way of thinking into a fairly traditional landscape. What did Prezzta bring to the market that was different? And how did you connect those people that were looking to lend and looking to borrow?

Mateo Infantozzi 5:59

Prezzta at that point, was leading in several areas. First, it looks like it was 100 years ago, with some few years ago, it was one of the first that was completely online, completely online, one of the first fintechs in the market, and when the word FinTech was not now, and some people don't know right now. So we introduced the concept of peer to peer lending through a company, because peer to peer lending, you can have a cousin that will lend you money or a friend that will lend you money, but through a company through someone that it's it's in the middle, that was completely new. And also, we gave the opportunity to investors to invest in people to help people through these peer to peer lending. So there were a lot of new concepts when we launch it. And sometimes, it's like, we were ahead of time ahead of market, you know,

Brendan Le Grange 7:03

how do people respond, has the marketplace changed in those seven years, how's praise to change since those early days,

Mateo Infantozzi 7:10

it was quite a challenge. Sometimes, if I think about how it feels, we were ahead of marketing, by way, and the market is always prepared, we had to educate borrowers and lenders on this new business model, let them understand that there's something new and it, it will work. It's just different from what they're used to. We knew that there was a big borrower market, because it's their big amount of money late in terms of lungs, that was not a concern, but yet still had to make an understand that there was someone person that was lending them the money, someone that trusted on that borrower. And that's something that was quite difficult. And on the lender side, the market, it's smaller than there were fewer opportunities, but still attracted. But the legislation here UI was not giving them a lot of room to embed. So they had they have always liked the same product to invest in.

Brendan Le Grange 8:22

How did you address that issue of building trust between the borrowers and the lenders.

Mateo Infantozzi 8:27

From the borrower side, it's, I need a man, I don't care who gives skin. But for the lenders, they had to trust this model, they had to trust on the company, we had to build this trust by communicating by being clear by being honest on what was going on. Showing all the cards, it's sometimes you're going to win, sometimes you're going to lose, we were not granting any loan was like this, what it's going to happen, and it's your risk. And it's that was something that we try to be very clear from the beginning. This is your money, it's your decision. And if this borrower doesn't pay, there's nothing we can do. We're not going to make any money. If this borrower doesn't. You have to trust that I'm going to do all my efforts to get that money for you.

Brendan Le Grange 9:23

In the peer to peer model was at one to one so I would lend money to one borrower directly or is it in a pool of funds?

Mateo Infantozzi 9:31

Our bull was one to one. There were a few after us. There were a few companies that started operating in the market and and they were doing more that well that proud funding, let's say but their legislation wouldn't allow that. And at that point, it was not very clear what was allowed and but our model was one to one.

Brendan Le Grange 9:58

What does presta look like? Today, what is the business look like at the moment,

Mateo Infantozzi 10:02

In 2017, after up to three years operating in the market there was still no legislation, and so we started to look at other opportunities to grow our business. That year, by the end of the year, the central bank created a new legislation that will start to regulate our business, and it was very restrictive for everyone doing peer to peer lending.

At the end of the day, what happens is that all the companies that were doing peer to peer lending, had to stop because the business model was not able to continue in the way the central bank wanted to do it. Fortunately for us, we were able to keep up our our business: we already had a really good platform, that today is a loan management platform that we are offer to banks, to startups, financial institutions, to onboard to originate new credit lines, and to administrate manage those those loans.

So basically from 2018 to today, and we will continue on this path: developing and selling our loan management system as a software as a service.

Brendan Le Grange 11:37

And I think now's a perfect time to introduce your other business.

As I said up front, you clearly enjoy a busy calendar because it's not just Prezzta that you're working on, you've also launched Octa.dev Talk to me about where Octa fits into that bigger picture, and how the two businesses are interrelated.

Mateo Infantozzi 11:58

The idea started around the same time that we launched Prezzta, in 2018. And that was something that my partner, my co founder at Octa, Andrés Piccardo, he was working corporate stuff and he saw that was there was a lot of need in the market for doing some specific things for the FinTech industry that Prezzta, wouldn't go there.

The idea of Octa was to continue developing the platform, making that platform, the best platform in the market. And so there was this need, and in the market. We wanted to do something about that.

We didn't want to leave money on the table, as we say here. So basically, the decision was that Prezzta was going to continue as it was, developing the platform as was planned. And anything else should be done separately. At that time, Andreas and I spoke, and we started working together in parallel and started servicing Prezzta throughout with staff augmentation and providing resources to continue developing that platform.

Brendan Le Grange 13:20

One thing I noticed when I looked at the two businesses that Octa already has this big regional presence. So as you said earlier, Uruguay is a small country, but with Octa you've spread across the region - how did that come to be?

Mateo Infantozzi 13:35

We have a few small customers that we were working with locally. But our first big customer that gave us the opportunity to have a regional presence was a remittance company. That remittance company has almost 12 million customers it was funny, this was before COVID started and they wanted to build this mobile and web app to let their customers to send money without the need of going to an office or go into their bank. So this remittance company contacted us and we built this app, we continue to service in this company, evolving their app and in this path, we started working with other companies in other markets.

The experience with Prezzta, experience with this remittance company opened up opportunities in the region. And at the same time we have these FinTech knowledge and this is something that we speak the same language with other co founders with other C-levels. When it comes to time to talk about pains, talk about business opportunities, roadmaps, technology roadmaps, we know what the, what they're going through. It is what differentiates us from other software factors. So it has helped us and gave us the opportunity to have customers all over that.

Brendan Le Grange 15:11

Yeah. And I wish you the best of luck for that continued expansion. Mateo, you've now launched two fintechs out of Uruguay, what is the startup space, like the FinTech space like there?

Mateo Infantozzi 15:23

Back in 2015, there was, I think, little room for startups, less room for fintechs. They word FinTech was new for everyone.

So after a few years, watching the news over time, whereas there's a new unicorn legislation, after COVID, were moved, almost obligated to think outside about what I'm trying to say. All kinds of businesses needed to transform their business and adapt to new, this new reality. That was a huge milestone for this new digital era that we're living today. So this was a huge opportunity for both press. And banks and financial institutions and other companies from the FinTech industry need to learn money, learn to move money, customers needed to move money in different ways and receive money.

But offices were closed.

They needed to transform, they needed to adapt the way they were doing businesses, and shift the paradigm, how and why things are done in a certain way. And here we are, basically.

We talk to them, we're bringing customers a huge set of expertise, development products for consumption, industry, making great alliances, they're, they're great companies doing great stuff, startups, they're thinking outside the box fintechs that are trying to help people. That's what we try to do. And beginning with Prezzta, what we're trying to do here is try to think and trying to innovate and help people. So we're knowing incredible, talented people, as we say, there's a huge opportunity for fintechs I think there's, there's a lot of room. Fintech is sexy. And as we like to say, without a doubt, we help to develop the FinTech industry.

Brendan Le Grange 17:35

Clearly, you're not somebody who sits around waiting for things to happen to you. So I'm sure you've already got some thoughts in mind about the next six months or next year - what are you looking at in terms of Prezzta, in terms of Octa for the future? What should we be keeping an eye out to see what you do next,

Mateo Infantozzi 17:54

We are looking forward to continue to help companies to go through this digital transformation. Providing resources provide a muscle to the IT teams providing know how to be a partner to be trusted. And and looking forward to land in 2023 in the US and the Canadian markets.

Brendan Le Grange 18:19

I love to hear big bold goals for the future and the audience for this show is very much in that North American space. Lots of American listeners in particular. So something for them to look forward to and to keep an eye on. Mateo, thank you so much for your time. If people are listening, maybe people in America wanting to see what might be coming their way. Other people just interested in the space of facilitating FinTech around the world, where can they go to learn more about either business to keep up to date with the news?

Mateo Infantozzi 18:49

Well, first of all, it was a pleasure to be this podcast, I love sharing my my experience, say always moving industry, whoever wants to follow me, they can do it through LinkedIn. I know my name is kind of hard to say, but it's Mateo Infantozzi Riembau, they can follow me there, follow Prezzta, follow Octa and I'd be delighted to talk.

Brendan Le Grange 19:17

I'll put those links in the show notes as well to make it extra easy. So yeah, thank you again for your time. And thank you all for listening. Please do look for and follow the show on your favourite podcast platform, and share the updates widely on LinkedIn where lending nerds are found in our largest concentration. Plus, send me a connection request while you're there.

This show is written and recorded by myself Brendan Lagrange in Brighton England and edited by Fina Charleson of FC Productions. Show music is by Iam_Wakw and you can find show notes and written transcripts at www.HowtoLendMoneytoStrangers.show

And I'll see you again next Thursday.