Empowering Peru's Fintech Startup Revolution with Amparo Nalvarte: From Kulky to B89

Brian: Welcome to the Nearshore Cafe podcast. I’m Brian Sampson, your host, and I wanted to first thank our sponsor, Plug Technologies. That’s P-L-U-G-G.Tech, that provides software developers for U.S. companies. I am very excited today to introduce our guest. I tried my best to roll my R’s for you, um, but, uh, welcome, Amparo! It’s so nice to have you.

Amparo: Thank you very much for the invitation.

Brian: Absolutely. Uh, before we, we get into all these great topics, tell me about the chair that you’re sitting on. That is a really cool chair!

Amparo: It really is! What? It’s a normal chair, actually. I’m, uh, I am in my office, home office.

Brian: Home office, good, good. Well, um, uh, you know, we, we talk with entrepreneurs and business leaders all over Latin America on the show. Um, and, uh, what I first want to do is maybe set the stage on, uh, you know, uh, you’re from Peru. So tell us, first, you know, for, uh, for people that are listening and watching that have never been to Peru, uh, where to go, uh, the major tourist attractions. Maybe let’s start there.

Amparo: If you talk about Peru, there, there are two things that you will hear a lot. The first one is Machu Picchu. Everybody knows or wants to, to go to Machu Picchu at least once in life, so it’s a really good place where you should go, or people should go. And the other thing is, the Peruvian food is delicious, delicious, delicious, delicious! So there is, there are people that only come to Peru for gastronomic tourism.

Brian: Oh, really?

Amparo: It’s, it’s really good.

Brian: Now, when I went to Peru, so I did Cusco and Machu Picchu, of course. Um, and the food that I remember having… Now, I was also a solo backpacker at the time, okay? And, uh, I remember having incredible chicken. The chicken was like the best-tasting chicken maybe I’ve ever had. Um, is that, uh, something that Peru is known for? You know, maybe what are some of the other cuisines that, that you, you’d recommend?

Amparo: Yes, now that’s a *Pollo a la Brasa*, but it’s, uh, awesome! It’s delicious and it’s cheap, so, yeah, everybody can, can eat that.

Brian: Yeah, I remember, um, I think I even got it from the supermarket, and it was just like, oh my gosh! It was probably like the equivalent of three U.S. dollars, and I had so much food, it was so tasty! I don’t know, what is, what is the secret? What is, uh, um, maybe, uh, if you could share a little more about the secret, or what it, what does it taste like for people that are listening?

Amparo: Actually, that’s like, uh, the best secret of the restaurant experience at all. I don’t know how they prepare that, but the difference in the preparation, in the process, is that, uh, you don’t put the chicken on the oven. You put, uh, on a like a big old oven, but put in a line, and this, the, the chick… This is the line, and the chicken is around this line, and this is going like turning, turning around. So the preparation is different. So, and also, that gives us like a different, um, flavor because of the *carbón*. *Carbón* is the name in Spanish.

Brian: Okay, okay, good enough, good enough. Yeah, it was, uh, it was so excellent. And then, uh, Machu Picchu, um, what, what should people know about Machu Picchu that haven’t had a chance to travel there yet? Uh, there are two types of, of, of, of people: a, if you, if you like adventure, or if you don’t, if you don’t like adventure and you don’t like to walk a lot. Uh, you can take the, the train, then the bus, and then go to Machu Picchu and then walk around for two hours. You can see… Now you have different routes, uh, A, B, or C, I think, or one, two, or three. You can choose one of them and you can see the… and you can see Machu Picchu. But if you’re more adventurous and you want adrenaline in your life, you can do a Camino de Inca. It’s… and it can take around two days, three days, four days, eight days, depending on what you want to do. So, we are like very high, so you cannot breathe well, and that’s something that you want to know before you go there. So you need at least one or two days to prepare your body and be comfortable with the, with the space there. So, um, do you want to walk eight days, or five days, or four days? It’s like, you need to be prepared for that.

Brian: Yeah, I remember having, uh, I think it was like coca leaf tea to acclimatize. Oh my gosh, I felt fantastic! By the way, is that, is that, um, common throughout Peru or mostly in the higher elevation?

Amparo: Only in the highest places, yes.

Amparo: Yeah, it’s not good for people that do sports. For example, we have here, uh, Paolo Guerrero, a soccer player, that he… And when he had the process for anti-doping, uh, they saw that this tea was part of the ingredients. So it’s like…

Brian: So we’ll, we’ll make, maybe, make a caution for athletes, uh, yes! Okay, I like it. And then, um, you’re in, in Lima, correct?

Amparo: Yes.

Brian: Okay, um, so I’ve been to Lima. I loved it; I thought it was a really interesting city. But, um, but, uh, you’re there, so who better to defer to than you? Um, tell our audience more about what, what Lima’s like, what, what they should know about it.

Amparo: Lima is a big city. There are around 11 million people living in Lima, and in Peru we are like 33 million people, so one-third of the population lives here. So there is a lot of people, a lot of traffic. And we have different zones, like the zone for tourism, like Miraflores or Barranco. There is a booming place, uh, for people that want to have fun. Uh, we have San Isidro that is a financial zone. Um, yes, and we have different places that are around, around Lima. But if you want to go to the airport, for example, at least you need to, to prepare for one hour. So, yes, for the traffic, and it’s not that near to the city center. So, yeah.

Brian: I do remember that. Yeah, I do remember the traffic. Um, and I, I’d imagine that, uh, the majority of business is happening in Lima, uh, versus the rest of the country?

Amparo: Yeah, yes, yeah.

Brian: Um, tell us about the, um, the business culture and the, the business climate. I mean, you know, what is it like doing business there? What’s the, the work style?

Amparo: I think that there are two different types of businesses here, you know. Actually, the people that live here, it’s, I mean, are really good entrepreneurs, because there are a lot of entrepreneurs there. And, but because of necessity more than because of a passion, you know, they want to, to resolve the problems of their families. Um, they have to work, and they create their, their own jobs. Um, and we have seen people on the street selling things, or selling desserts, or some *chifas*, which is our food on the street, and we have a lot of that, of that things. So, but the culture of, uh, of entrepreneurship here, it’s really, it’s really strong. Hey, but those are like more traditional businesses and are like very small businesses, no? On the other side, we have like, uh, the startup world, you know, the startup and technological, FinTechs or or HealthTech or any the other, the other type of businesses. Um, we have the system that is supported by investors, by the academy, by the government. Uh, the technology, the technological part is not that strong. We have good developers, uh, but there are not enough developers, that, that’s a problem. Um, but we’re working on that, no? We had some exits in the, in the market. I mean, people that sold their companies. Uh, but for example, we don’t have a unicorn here. That’s something that is missing, I think.

Brian: I think, uh, you know, there’s often a couple different pieces you need to create a perfect startup ecosystem. You know, you need developers, you need investors and capital, you need a culture of people being able to take risks, right? Um, and then, uh, and then you need, um, uh, you know, just the overall environment, you need enough people, population, you know. I’m curious, uh, you know, your take on that, um, and, uh, you know, maybe besides active developers, um, is Peru, um, trendy and positive on, on the other things? Are there other, other areas for improvement?

Amparo: Related to the, to the developer part, uh, we have two really good universities that are not in Lima or in the south of Peru, and we have very, very good developers there. What is the, the problem that we see is that they are being higher, hiring, hired by bigger companies. So, for example, uh, I don’t know, PayPal hired one of the, my, my team, and I cannot support that, that salaries. It’s like, if I’m paying soles and they, and people pay the same but in dollars, it’s like four times what I’m used to pay, so I cannot compete with that.

Brian: Yeah, yeah, I can see that. You know, as we look at other, other markets as well, I’ll say Argentina, um, uh, it’s very hard for domestic companies, um, especially if they have an English-speaking developer, uh, because it’s opportunities to work directly with the U.S. and U.S. dollars and big companies and, and big money.

Amparo: Uh, now that they can do some office, it’s like, oh, yeah, yeah, for them, it’s awesome! It’s like, good luck! But remember that they give you your first job. Don’t forget me! Don’t forget, don’t forgive me! Excited.

Brian: Um, well, let’s, let’s talk more about you and your background. I found your, uh, your profile, um, in our earlier conversation, just fascinating. And I’d love to maybe start from the beginning. You know, where did you grow up? Um, how did you develop this entrepreneurial mindset? Um, your education? And then I’m sure I’ll have, you know, a dozen other questions.

Amparo: When I was young, when I was at school, no, and I mean, my family, my, my dad, he’s an entrepreneur since always. So I grew, I grew with the mindset that I should be my own boss, I should have my own company, where I should be independent. And, for me, that was good, no? But like for everybody that hears those things, it’s like, okay, but what I should do, no? I wish is a million idea that I should work with. And so that’s like, that’s why we are, um, but it had that information always in my mind. So I knew that I would be an entrepreneur at any time, but I didn’t know doing what. So when I was at university, I studied business administration. To finish the career, I had to create a business plan, so I created Kulky. That was my first startup, you know. It was a very successful business, too.

Brian: And your very first one?

Amparo: Yes, I actually… this is my, my second job, no, my second, the second course, because I failed the first one. My first business plan was failed. Like, I did tourism in the north of Peru or something like that, but it didn’t work. I didn’t approve the, the course, so I had to do that again, and Kulky was born there.

Brian: Yeah, yeah, well, tell us, tell us more about, uh, Kulky. Um, what, what do they do? Who is it for, the market? Um, and, uh, maybe, you know, some of the, um, uh, interesting parts of that journey?

Amparo: Well, in that moment, when… Until now, there is a problem, no, that the cash is the king in most of the cases, or in most of Latin American countries. Um, that’s a problem. But in 2013, when I, when I started with Kulky, there was a bigger problem. And when we tried to discover why people were using only, or were accepting only cash, and why they weren’t accepting, um, credit cards, for example, we realized that it was too expensive for them. And the acquiring work was divided into different brands. So, you, you, in that moment, you needed a terminal for Visa, then you needed another terminal for MasterCard and things like that. And that was expensive also for people. And if you were a small company, you had to wait like six months to receive your terminal. So, so that was, that was a problem. And of course, it was expensive. And at the university, we had a person that was selling like just more food or snacks outside the university, and he only received cash. So we wanted to give him the solution to use Kulky to accept credit card payments for the people that they study at university. So there was, uh, like our user persona. Now, we wanted to solve his problems, and we started with that. And when we had the prototype of the product, we went to him and said, ‘Okay, use it.’ He said, like, ‘Good, okay, but, but I wouldn’t use that.’ And we said, like, ‘What? No, but it helps you! I mean, this helps you a lot.’ ‘No, but I need to use like your code, I need to use my cell phone to, to save payments.’ ‘No, no, I prefer to receive cash and continue writing in my, in my notebook.’ And we were like, ‘Okay, okay.’ We were in an industry where the problem was still there, because the, the, the money, the money was a problem. I mean, the cash was a problem. And we said, ‘Okay, we need to find the early adopters.’ Who are the early adopters for this solution? So we were in that moment, we were part of Wayra, one of the acceleration programs of Telefonica, and we were working with other startups there. And the other startups, they were doing e-commerce in that moment, no? So they were the perfect clients for us, because they, they were processing or accepting payments with payment gateways in other countries, because in Peru they didn’t find anything that, that gave them the solution. So we said, ‘Okay, we have the payment processing that is the most important thing, is the core of our solution, but just change the way we integrate with, with these companies.’ And we only changed like the face of the, of the solution and changed the market. And we started with, with the startup and really e-commerce for online. Very interesting.

Brian: How, um, how your user persona changed over time. That’s, that’s very interesting. When you say ‘we,’ uh, what did the initial founder team look like?

Amparo: We were two people: Nicolas, Nicolas. We studied together at university. When we wanted to enter the university, like when I was like 17, then during the, during the, of the university, we didn’t see each other too much. But at the end of the, of the, of the university, we got together to, to do the, the business plan.

Brian: Yeah, and the continuous partners. And, uh, you were the business side, and Nicolas also on the business side or the technical side?

Amparo: No, we were both the business side. I mean, the technological part for us was like, ‘We will solve that.’ Yeah, no, we need to, we will bring someone that has, uh, the knowledge of that, and we can resolve that with the specialists. But on our side, both of us were focused on the, on the business side, but with different perspectives. Now, for example, if he was really focused on the product because he’s like so analytic and very focused on the details, and for him like the best thing was to be responsible for the product. In my case, uh, what do you think I was focused on? Um, selling, yeah. Selling was my part, like trying to find new partnerships, trying to find new clients, and always be, always be outside, trying to find new solutions and income for investment and everything for, for the company.

Brian: Yeah. And did you end up raising capital for that business?

Amparo: Yes, yes, we received around one million dollars in total in three rounds. Incredible!

Brian: These were, uh, the investors were, uh, from Peru or outside?

Amparo: Yes, almost all of them were from, from Peru. Yes, yeah.

Brian: And, um, you know, as, uh, you know, as we talked about earlier, um, Peru is up and coming, you know, as a technology center, and, um, but even this is almost 10 years ago, uh, that the business was, was started. What were some of those, um, early investor conversations like? Um, was it hard to raise money, or were there fewer startups, so less competition? You know, how, how was that, um, uh, early on?

Amparo: Um, no, it was really hard to get, uh, to get money because, um, in that moment, it was something new for people. So I remember that one person wanted to give us $50,000 for the fifty percent of the company. Now, we said, like, ‘What? No, no way, no way, no way!’ So we always had a trainee salary at least for the three, four years. Yeah, but some, something that really helped us was, were the programs like the accelerator program from, from Wayra, who received that… We received there $50,000 for the government. Also, we received $50,000 more, so we could support with the money the first years of the company. And we were like very efficient with, with money, not trying to make it last for months or years, no? Yeah, we did that. Um, but now I have a new startup, and with Kulky, I sold Kulky. I had an exit in 2018, 2019. And when I created my second startup, for me, it was very easy to receive investment, because I had something successful in my portfolio. You know, like, they started that could say like, ‘Okay, she could do a business, she could sell that business to a big company. That is that company.’ Um, so it’s like for me, like a check. Now, ‘Okay, so she, she has this, this support.’ Yeah.

Brian: And did you know right away that you wanted to raise money for this current venture, or were you, um, uh, thinking about bootstrapping, you know, after you had, uh, had already had this success?

Amparo: There are different situations. When we started in 2020 with B89, this, that is this, the second company, um, we started looking for investment, and we received in one year and a half around nine million dollars. Without the, without money, we did a lot of things. We hired a lot of people. We were in the team, around 100 people, no? There was a, it was a big team. But when in November 2021, things went like not so good. And we started like, um, we weren’t expending too much money, and we didn’t have too much cash, and the market was changing. Now it was that moment where investors, they were looking for a lot of numbers and, uh, yes, specifically numbers, no, good KPIs. We say like, ‘Okay, no, we cannot continue, uh, looking for investment in that way. We need to be more efficient.’ So we did a lot of changes. We received our last invest, our last investment, in the year that was four million dollars. And we still have the money. Now we are still, since November 2021 until now, uh, more than, more than one year, it’s like, we are still working with that money. And we are now like very, very efficient. We are not 100 people, we are 30 people in the team. We changed a lot of providers. We re-negotiated the contracts, the conditions and everything. We have to do a lot of changes to, to be sustainable. That’s our main focus now. You know, we don’t want to launch or to look for investment in the next six or one year, no, six months or one year. I mean, something that really, if, if we stop losing money, we will look for investment. Yeah, yeah, if not.

Brian: Yeah, you’re not alone. Uh, the last 18 months has really been a year of efficiency for startups all over the place, right? And I think you’re also not alone of, um, uh, probably a little over-hiring, you know, as we all were very optimistic, right?

Amparo: Exactly.

Brian: The global economy. So, out of the, the 30, the 30 or so people, uh, what are they focused on? I don’t think we’ve talked so much about what you’re building right now.

Amparo: Yes, now I have B89. B89, it’s a neobank. We are helping people to get their first credit card. So we have a program that it’s a credit builder solution. If you want to apply for a new credit card and you don’t have information on the system like the bureaus or financial bureaus, and we help you to create that, that history for six months. And then if you pass the process, uh, if it works with gamification, or you need to complete some challenges, and if you do that, then you graduate and get your first, your first credit card. It’s like our, our challenge or our main purpose is to give access to the people. And we have the cards that are Visa. We are partnered with Visa, and we are also in the cross-border payments solution because, uh, for example, one part of the market in Peru are foreign people, like Venezuelan people that live here. And they work here. They don’t have information here. They need a credit card here, and they also need to send money to their countries. Not all countries.

Brian: Oh, interesting, interesting. Um, who do you run up against the most, uh, with that, and maybe what are, what are some of the, the key differences that you’re doing?

Amparo: We’re giving, we’re giving them like an ecosystem to, to our clients. We’re a mix of Wise and neobank, for example. Now, we want to, to be a mix of that, you know. One solution that you can have like the credit card, the prepaid card, and also you can send money. Well, that’s a, that’s the, the main, the main focus.

Brian: Got it. And, you know, another area I wanted to, uh, get into is, um, uh, you know, what we talked about earlier about building that ecosystem in, uh, you know, in Peru and Latin America in general. And, um, you know, you often not only need, uh, developers and ideas and business people in the environment, but you also need capital, you need investment. And you’ve become an investor yourself, um, and I’d love to hear, uh, you know, maybe, maybe two things. Um, first, a little bit about some of the investment that you made, and then second, um, what are you looking for, you know, in, uh, in companies that you, you decide to invest in?

Amparo: I, I think that as opportunities… Now, if a startup’s related to agriculture and education and healthcare, in those three segments, there are like a lot of opportunities that they’re growing a lot. And what do I look for in people to invest in? I see people. I’m always focused, I mean, if you have a business and it’s your, and that business is, it’s what supports you or supports your family, that means that you’re going to kill for that. Now, you are going to do the best to, to make that work. And I think that that it’s very, very, very, very important. Because I had, I invested in one startup, and the founder was a, this startup was his, his second, like his second job or something parallel, and in one year it was bad. So, so it was a disaster. But I learned that if it’s your main source of resources for you and your family, you are going to, to die for that.

Brian: I think that’s a great point, and probably works universally. It doesn’t matter where you are in the world. That’s, that’s a great, great perspective. Yeah. And, and how about specifically, what are, um, what are some of the companies that are still around that you’ve invested in? Maybe we could give them a little bit of a plug, too?

Amparo: Yes, most of them are related to FinTech because I’m really focused on, on FinTech. Now, for example, I invested in Rextie, that is an exchange. Yes, exchange. They exchange soles and dollars, the, the currency. And they’re growing; they’re expanding now to Canada, and they are growing, they’re growing really good. The founders are a couple, no, they, a couple, their husband and wife. They are 100% on, on that. Uh, I have another investment that I’m working on now, they like processors for payments. Um, uh, if SDK or solutions related for tap on phone or payments with a cell phone and all that things. Um, because it’s part of, of, of what I know, no? I also invest in the… And I know it’s not only my job, it’s I, I put money on, on that to make it work. So, yeah, that’s great. Yes, those are my main investments.

Brian: Good. Well, I’m wishing, uh, all the success for, uh, uh, for both your company and, and your investments. Um, I just have a couple, uh, last questions for you. Um, uh, you’re obviously a global person, and, you know, I think last time I talked to you, you were, uh, in Vegas or somewhere, you know, at a conference. And, um, uh, especially for, um, for people that you meet, uh, say in the U.S., you know, the U.S. has been trending looking at Latin America a lot more, and I think a lot of people are, um, curious, you know, of, of many things. What advice would you give to someone who is, um, uh, maybe, uh, new to Peru but they’re looking at investing in Peru or starting a business in Peru, but they’re from the States? You know, what, what advice would you give them?

Amparo: I think that, uh, knowledge, it’s something that is missing in Peru. We can have here people that have like the best attitude and they will kill for their, for their startups. And, but they need more knowledge growth in methodologies, or how to work with AI, or how to think big. That’s very, very important: how to think big. Uh, people from the U.S. can share that information, can share that knowledge or that way of thinking, uh, with Peruvian people. That will be like very, very important.

Brian: That’s great, that’s great. And, um, uh, obviously you speak English fluently, but, um, it’s not your first language. So, uh, you know, one, one question I always have is, uh, your favorite English word.

Amparo: My favorite English word? Uh, ‘yes’!

[Laughter]

Brian: Always positive! Always. I like it. That’s, uh, it’s a, it’s an entrepreneurial word, too, like, ‘Say yes,’ you know, and things will happen, right? Exactly.

Amparo: Exactly.

Brian: Um, well, uh, that’s, uh, that’s all the time we have today. Um, Amparo, it was amazing having you. I learned a lot about Peru and entrepreneurship and just things that I can take anywhere, and I’m sure our audience will too. Uh, another thanks to our sponsor, Plug Technologies, P-L-U-G-G.Tech, a great place to find software developers in LatAm to help U.S. companies. Hi, Amparo, thanks again for your time today!

Amparo: Well, thank you very much, and I hope that people can, can hear this and enjoy!
[Music]