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In the six years since the Mexican fintech loan Credijusto was launched, David Poritz and Allan Apoj have achieved more than 250% annual revenue growth and have managed to turn Covid-19 into an opportunity.

But when the co-CEOs decided to become mainstream by acquiring a bank, even one of their biggest supporters hesitated.

Hernán Kazah, co-founder of Kaszek, the largest venture capital firm in Latin America, worries that the acquisition of Banco Finterra may cause the two to lose focus. Or as he said: “When David and Allen said they were going to buy a bank, I thought they were crazy.”

Poritz is a 32-year-old American anthropologist who later became an entrepreneur and holds a master’s degree in public policy from Oxford University. Ironically: “Fintech was born to disrupt the banking industry,” he said. However, in June, Credijusto spent an undisclosed amount of less than $50 million to become a bank.

For them, this proves their core belief that after successfully challenging an outdated financial institution from the outside, they can now change it from the inside.

Like Credijusto, Finterra’s goal is nearly 5 million small and medium-sized enterprises, which account for half of Mexico’s GDP and employ 70% of workers, but it is difficult to obtain credit. But the unique selling point of Credijusto is the way it processes electronic invoices, taxes and other data to provide customers with loans within hours.

Kazah has always worried that the price tag will be too high, “and there may be surprises,” but Poritz and Apoj insisted on their position. They have begun to evaluate whether to apply for a bank license to take their business to a new level.

However, this may take several years. When Finterra went public in 2019, “we chose to buy rather than build a bank from scratch — it was faster and we saw a lot of consistency,” said Apoj, a 31-year-old Mexican economics graduate who is an entrepreneur. In the year after graduating from university.

The goal now is to “get the speed and flexibility of fintech services at a cost that banks can provide,” Apoj added. Currently, their minimum interest rate is 7.5%. With Finterra, “we can now financially compete with any major bank.”

In addition, the “this [acquisition] Doubled our size. .. It gives us a lot of room for growth,” he said.

There are 51 banks in Mexico, but only a few banks provide most of the country’s loans. Even successful entrepreneurs like Poritz and Apoj, from 2015 to 2019, Credijusto’s revenue increased by more than 250% annually, but they were also refused to use personal credit cards-Apoj said this is a “symptom of the financial system”. Get service”.

Market concentration left Funding gap According to data from the World Bank, the International Finance Corporation and the SME Finance Forum, the total financing of SMEs exceeds US$160 billion.

“SMEs are indeed left behind,” Politz said. “We hope to build the first true digital banking solution for SMEs.”

Credijusto has issued loans of approximately US$500 million to US$600 million, and plans to double the combined customer base of the two companies to 12,000 by the end of this year, with special attention to the underserved agricultural sector.

Within two weeks of the acquisition of Finterra, this unnamed merged entity launched a credit card in cooperation with American Express, providing a five-month buy-and-pay service, and integrated digital financial planning tools for operations. For small companies It is more flexible and cheaper.

The two met in 2008 at Brown University (Apoj’s first week in office), and they are not shy about taking risks. During the Covid-19 pandemic, they introduced a revolving, mortgage-backed line of credit, which proved to be the lifeblood of restaurants.President Andres Manuel Lopez Obrador Provide small businesses Loans worth slightly more than $1,000 But almost no other pandemic helped.

Credijusto also works with Uber Eats Become the exclusive financial partner of the delivery service in Latin America, enabling businesses on the Uber Eats platform to obtain fast loans.

“Covid helped prove our business model in a very unexpected way,” Politz said. “We were able to navigate Covid well and validate our business in a shorter period of time.” In fact, even during the pandemic, revenue increased by an “incredibly respectable” 30%, Apoj said Loan defaults are “not as bad as imagined.”

First-class venture capitalists and funds — including Goldman Sachs, Credit Suisse, Point72 Ventures, New Residential Investment Corp, QED Investors and John Mack, and Kaszek — are all happy, and they have invested approximately $400 million in debt and equity.

“Capital alone does not make a business successful, but Mexico’s institutional capital is a major differentiating factor that allows us to scale up,” Poritz said.

In terms of “unicorns”-start-ups worth more than $1 billion, Mexico has long lagged behind other Latin American countries. But since October last year, it has accumulated three, and Credijusto has set its sights on joining them-the two believe that this proves that they are building what Poritz called “high growth, real solutions to major pain points, Success in high-impact business.

Three questions from David Poritz and Allan Apoj

Politz

Who is your leading hero?

Joseph Mittelman, A successful developer, teaches leadership at Brown. We used to ride bicycles for 90 minutes. At the critical moment when I graduated from college, he was a very important leadership coach.

What is the most important leadership course you have learned?

If you communicate and manage expectations clearly, 90% of friction and conflict can be avoided.

If you were not working in Credijusto, what would you do?

I will divide my time between the academic world and the non-profit world.

Apolipoprotein

Who is your leading hero?

Barack Obama defended his health care plan, saying that it is important not to let perfection be the enemy of good people. Many people in the tech world are purists-if you pursue perfection, it tends to slow down innovation.

What is the most important leadership course you have learned?

If you don’t like something, please speak quickly. I understand that you sometimes have to unplug.

If you were not working in Credijusto, what would you do?

I will go to law school-this is the best way to business.I have always wanted to work in finance

Apoj is responsible for technology and internal operations, while Poritz manages investor relations and finances. He has seen the prospects for international expansion, and providing loans to small businesses to further enhance North America’s integrated supply chain in the United States and Canada is an important driving factor. increase.

Becoming a friend and business partner has always been a reward. “When you are in the trenches of a startup, you need to do it with people you like,” Politz said. “But to say that we always agree, this is not the case.”

He said that in fact, a disagreement delayed the company for more than a year. “I made a little tactical mistake. Allan wanted to create a multi-product business from the beginning. I think we need to focus on a few products,” Poritz said. “I’m too conservative.”

In turn, Apoj regretted that some inappropriate employees “didn’t pull the trigger as early as possible”, which he said eventually caused the company’s technological development to be interrupted for two years. But both of them are in their twenties and lack experience. “We didn’t have the confidence to make these decisions in the early stages.”

As a result, the pair has evolved into what they call “super communicators.” “We are very, very open to our employees,” Poritz said.

Before Credijusto, both of them were involved in other entrepreneurial projects. Poritz founded Equitable Origin, a non-profit organization focused on indigenous rights, and remains its president. While working at Brown, Apoj spent a year designing a healthier landfill solution for Ecuador’s tender. He eventually lost, but recalled that it was a “great experience”.

Now, the pursuit is to become “This A new bank for SMEs,” Poritz said.

Or as Apoj said: “There are still tons to build.”

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