Tomas Bercovich
CEO and founder at Global66 on entrepreneurship in Latin America.
“The conditions are beginning to be met so that the venture that really adds value and generates impact obtains the necessary financing”
The Chilean engineer at the head of the money transfer fintech is leading a team of more than 300 people that in just three years, are all over the continent helping users make immediate cross-border shipments and payments from their cell phones. In this interview, the first of our monthly ‘Meet the C-SUITE’ series, Bercovich tells us about his beginnings in the startup world and his vision for financial products that allow freedom for both people and companies.
By SIMALCO Brandlink
The old saying about whether an entrepreneur is born or made, with Tomas Bercovich is solved: it is born and made.
“What drives me, and I have always liked is doing things: at 11 I applied for a job at shopping centers as a part-time salesperson for the holidays, I began working in a ski shop, which in the summer sold nautical gear. Then I worked as a waiter, and I also played music when I was in high school, using my own equipment until I earned enough to buy professional equipment,” he recalls.
Fresh out of the Catholic University of Chile (PUC) where he studied civil engineering, he created his first real venture together with two friends, called ZhetaPricing, a revenue management solution applied to the film industry.
“We started working with Cinehoyts with the ‘Cine a Luca’ (‘movies for two bucks’) initiative. We managed to convince the chain after a year. His manager believed in us despite being a couple of kids and we started the pilot and it went from being an average theater to being the cinema that grew the most in attendance in the country. That allowed us to grow with the firm throughout Chile. Then we started working with Cinépolis in Mexico and it went very well… so well that they ended up copying our system and kicked us out of Mexico and Chile as well”, he explains.
More initiatives would come: the software firm Izytech, and the discount e-commerce Cuponatic, that today is in Chile, Peru, Colombia, and Mexico.
His experience as an entrepreneur did not stop him from continuing to study. “I went to Warwick, north of London, for an exchange semester, then I did a one-year program at Columbia University, called Entrepreneurship and Competitiveness for Latin America (ECLA), which is supported by Banco Santander and Endeavor to form high-impact entrepreneurs in the continent”.
It was there that he met Cristobal Forno, his founding partner at Global66, who is also the founder of Capitaria, a major online trading firm. It was he who called Tomas to suggest that he would not take a sabbatical year in Miami, but rather in London.
“He saw what was happening there at the technology level, what was happening all over the financial industry, how it gave users access and simplify things, to lower rates or prices in different financial products, and he came back to Chile very motivated. That’s when he called me out of the blue one Sunday night: ‘Let’s go to London together and from there we’ll set up a bank for LATAM,’ he proposed. We discussed it with my wife and our two families went to live abroad for two years”, he details.
THE PAIN OF LATIN AMERICA
From that call until April 2018, Tomas and his partner Cristobal were able to develop the MVP -minimum viable product- or pilot for their dream solution, which allowed them to make a transfer from Chile to Peru.
– Why this type of transfers?
The international transfer market is one of the greatest pains in Latin America. Before Global66, people had to go to a branch of a transfer company, spend money and time on transportation, standin line, pay a very expensive 6%-8% [commission] for a transfer, and many times they don’t understand the exchange rate, so we first decided to focus on solving that problem and that is why we started with transfers to Peru in April 2018 and in December of that year we launched Global66, having built enough infrastructure at the height of banking technology in different Latin American countries.
– Is that something our continent is runningbehind?
In the US there are 300 million inhabitants and there are more than 5,000 banks, here in Latin America we are 600 million people and there are 150 banks, and of that number, 50% of people are unbanked or underbanked. So, there is a huge opportunity. We want to make life easier for people and companies in the financial world, we want to give them a simpler, faster, more transparent, low-cost solution, in different financial products, we already have three of them and we are working at full capacity to build an ecosystem of very robust products, and the other thing is that we see that both people and companies today are looking for freedom.
– What do you mean by freedom?
I mean the ability to move freely around the world. With the pandemic we have realized that people can live wherever they want, study and work from wherever they want, in a vast majority of jobs. We believe that people will begin to live where they want to live, rather than where they were born, but opening an account in another country is difficult, not to mention lending you money, which is impossible, since they don’t know you, they don’t have your credit history, nothing. With Global66 you will be able to have your global account, where you will be able to own all the currencies you want, you will have your Mastercard to be able to pay wherever you want, you will be able to request a credit- independently of the country where you are, because we are going to meet your needs in time, we are giving access to a sort of global bank and the same will apply to companies.
– How has the growth of Global66 been?
These three years have been a little crazy: we have grown from scratch to more than 300 employees, distributed in Chile, Colombia, Peru, Argentina, Spain, USA, Brazil with a pandemic in between that forced us to work differently and to look for talents in different parts. Today we have three products: international transfers, both for individuals and for companies, today a person can make a family remittance or can send money to an account to another person in the world, they can pay for a series of services, such as rent or studies, and a few months ago we developed our app to make instant transfers between users. And what we have just launched three months ago our multi-currency wallet, where people can, with Global66, have their wallet in local currency and in other currencies.
THE LIFE OF THE ENTREPRENEUR
Global66’s bet has paid off. In August 2020, they raised a little more than US$4 million in Seed series and in July of this year they raised US$12 million in series A with Quona Capital, in the United States, reaching a total capital of US$20 million in financing, adding rounds of financing, private capital and seed.
– How do you see the entrepreneurship in Chile and the continent? How much have we grown? what are we missing?
I started a business 15 years ago and at that time I was a weird breed. There were few entrepreneurs: it was much more comfortable to go to work in a large company with benefits and make a career. Not today, today it’s the other way around. I always do the exercise, when I am invited to universities to talk about entrepreneurship, to ask those from the audience who want to be entrepreneurs to raise their hands, and there is a big 80% of young people raising their hands. When high-impact ventures emerge, this generates motivation at all levels in the ecosystem, both for entrepreneurs and investors.
– Is it difficult to obtain financing to undertake your own startup?
For me it has been a big struggle, because raising capital in Chile was very difficult, because the truth is that family offices preferred to invest in safer things, like real estate…rather than placing money into venture capital and they were somewhat right, because, at the end, there were no great [successful] cases. But today that has changed, and I would say that the vast majority of family offices are either looking at investing or seeing how they will do it, learning about venture capital and that is good.
– In Chile, the government has been behind quite a few undertakings…
I think that Corfo (the Chilean government office for production incentives) has done a good job, they have opened several lines of seed capital and support for Chilean startups to support entrepreneurship and today there are also several companies that have closed rounds with funds from the United States and Europe and the funds are already looking to Latin America, there is no longer the excuse that there is no money. Today I believe that the conditions are beginning to exist so that the kind of [entrepreneurship] that is really adding value and generating impact can obtain the necessary financing for its company.
– But the system is always perfectible
At the level of public policy, there are things to do. In England there was an incentive for people to invest in startups, so if things went wrong, you could use it as a credit in your annual taxes. Today if you invest in Chile and things go wrong, you are still going to pay taxes, you cannot generate a credit on that, as companies can, where their loss reduces the tax base. If you encourage people to invest in the seed stage, it is most likely that there will be more liquidity to [invest in] that stage of companies, and with that more companies will go through that valley of death.
– Does reaching a Unicorn status keep you awake at night?
We are not interested; it is far from being a priority for us. What really matters to us is impacting the lives of people and companies, simplifying their lives. Help them to be free and if we achieve that, it will be a consequence, but seeking to be a Unicorn for us does not make any sense.
– How has the process of managing, looking for better talent and retaining it been for you?
The basic thing is to try to find people who align with our purpose, who truly believe in what we are doing, to make life financially easier for people and companies, to achieve this freedom. That is the core. That we are aligned to where we are going and that it be a purpose and a cause that unites us all.
The next thing is that we don’t want Global66 to be my dream or Cristobal’s, but rather everyone’s dream and that whoever doesn’t want to assume by himself – in fact, I would love that tomorrow we had 50 successful ventures from employees that were once in Glolbal66 – let this be their venture and, in that sense, we are all partners, they all have stock option programs and part of what I would love to see is that tomorrow everyone in the team could buy at least one apartment or a house with their shares in Global66.
– What was it like growing up as a company in pandemic times?
For the most part, it began to cost us a lot to find talent in Chile and we reached out to look out in other countries and it worked. We said, ‘if it is working for us at the technology level, let’s open our search pool to all of Latin America’, because in the end we can find better talent. If you focus on finding talent from a single country you will find talent from that country alone, but if you open your search you will most likely find people with a better fit or more qualified for each of the positions you are looking for.
– What bumps on the road have you encountered so far?
Bumps on the road is a daily obstacle for the entrepreneur. The first three to four years I lived with a tight stomach every day. Since I started my business, I’ve probably been robbed more than ten times, not at Global66, fortunately, but problems did arise with the pandemic, and nobody knew what to do. Entrepreneurship is living with uncertainty and trying to make the best possible decisions with the information that one has available and surrounding yourself with smarter people than yourself, to make the right decisions, but it is always important to emphasize: trying to focus a lot on the client.
– You are usually seen with a big drawing of a mountain behind you, does this have a meaning for Global66?
Having an entire company focused on a common goal is difficult. Climbing the Everest is a difficult challenge full of intermediate stages, or camps. So, in that phase, before launching Global66 we drew our own Everest: what we wanted to achieve in each camp and what was at the top of our Everest. And today at Global66 if you ask the team, everyone is clear about what our Everest is, what the goal is, where are we going…it helps us a lot to focus the company towards common goals.