Commerce Conversations

SMB Payments Around the World: LatAm (Clara)

Episode Summary

In this installment of SMB Around the Globe we sit down with Gerry Giacomán-Colyer co-founder and CEO of Clara, an entrepreneur with a journey that spans the bustling tech scene of the Bay Area to pioneering micro-mobility solutions in LATAM. Discover how Gerry's insights from previous startup success and challenges led him to pivot towards B2B payments and commercial credit cards. Gain valuable perspectives on the financial intricacies of the LATAM market, the hurdles in establishing multi-country credit card solutions, and the innovative solutions Clara built to overcome them. Uncover the evolution of Clara's focus from startups to mid-sized SMEs, with Gerry sharing the secrets behind their locally issued credit cards and robust payment solutions. Don't miss the chance to hear Gerry's admiration for business leaders like Gary Kelly and his personal advice for founders navigating the intricate landscape of entrepreneurship. Tune in for an exploration into the future vision of Clara and Gerry's unwavering commitment to building impactful solutions in LatAm.

Episode Notes

• Gerry initially found himself in the Bay Area, started an MBA at Stanford, and worked in tech in SF.
• Inspired by the evolving mobility landscape, he saw an opportunity for shared bikes and scooters in LATAM with higher density and traffic issues.
• Gerry founded a micro-mobility startup in LATAM, which later merged into Grow Mobility, achieving rapid growth across 7 countries.
• Despite market success, Grow Mobility faced challenges in financial practices, access to funds, and resource traceability.
• Gerry's transition to the B2B payment space and commercial credit cards was driven by the need for financial agility and sound practices in the mobility industry.
• The experience highlighted the importance of financial efficiency for business operations and employee needs.
• Dan inquires about the initial focus of Clara on fast-growth startup customers, given Gerry's background in the startup ecosystem.
• Gerry mentions that startups in the ecosystem were among the first to recognize the need for financial controls, visibility, and agility.
• Clara initially resonated with startup customers, with over 80% of the top hundred startups in Mexico using Clara.
• However, Gerry emphasizes the broader opportunity beyond startups, with 90% of Clara's business today coming from non-startup customers.
• Clara has expanded its focus beyond startups to include a wide range of companies, and 90% of the current business growth is outside the startup segment.
• Clara's underwriting process has led them to primarily work with mid-sized SMEs and above, avoiding the smallest companies or individuals.
• Over time, Clara's products have become more robust, meeting the needs of even the largest enterprises operating in LATAM.
• Clara is the only company offering locally issued credit cards in multiple markets, citing an example of a customer, Smart Feet, a gym chain in Brazil.
• Clara aims to evolve into a platform where companies not only make payments but also receive payments, creating a comprehensive financial ecosystem.
• Establishing a multi-country LATAM solution for credit cards is challenging due to the region's lacking infrastructure, requiring Clara to build much of the solution from scratch.
•  Existing market enablers were not equipped to meet Clara's needs, lacking capabilities in credit, business collaboration, and having functional shortcomings in APIs.
• Clara overcame these challenges by investing eight months in building its solution, operating under its principal member license, and establishing a direct relationship with card schemes, primarily MasterCard.
•  Presently, the company is concentrated on developing a robust payment solution, encompassing all payment methods utilized by businesses.
• The future vision includes potential expansion into more countries, serving a broader customer base while maintaining the core focus on enhancing payment solutions for businesses.
• Gerry cites Gary Kelly, co-founder of Southwest Airlines, as an admired business leader for steering the challenging airline industry with a remarkable 40-year profitability record.
• Southwest's success, according to Gerry, stems from its approach of using first principles, reimagining the entire industry beyond customer-facing aspects like seat assignments and lower fares.
• In the absence of Clara, Gerry envisions himself exploring other ideas, maintaining a reservoir of concepts waiting to be pursued or kickstarted to address unmet needs.
•  Despite having multiple ideas, Gerry's present focus is solely on Clara, dedicating every waking second to the company and its mission.
• Gerry advises founders to be crystal clear upfront about the type of company they want to build, acknowledging the honor and dignity in running a well-managed small business, a prevalent model in Latin America.