The difference is creating something for the long term and finding partners who can believe in the long term, build with us, help us, and find an agreement that allows us to do it in the long term. Our mission hasn't changed since day one: to bring financial services into the 21st century. That allows us to provide radically more efficient services with far fewer people, passing the benefit to the customer. That's why today, the best yield of any bank account in Argentina is at Ualá.
First, thank you very much ARCA for organizing the event and for the invitation. My name is Emanuel Hernández and I am the Director of Research at LAVCA. For those who don't know LAVCA, it is the Latin American Private Equity and Venture Capital Association. We are a non-profit entity based in New York that seeks to promote more private investment because we believe that is the engine the region needs for better economic development. It is an honor for me to be here with Pierpaolo Barbieri, who is the founder and CEO of Ualá, one of the largest fintechs and neobanks in Latin America and an extraordinary example of a startup that started here in Argentina but already has a regional presence and world-class investors. To start the conversation, Pier, I'd like to talk a bit about the beginnings of Ualá and how the process of raising capital over the years has been. So, I'd like to go back to 2017 and have you tell me a bit about what you remember from those early days and how it was raising the first millions for the Ualá thesis.
Well, first of all, thank you very much, Emanuel, for being here and for moderating this panel. It's a pleasure for me. And thank you all for coming back from the break, because I think the most interesting thing about these events is the networking that happens when people meet and create spectacular synergies, talking about everything we want to create and all the opportunities of digitalization in Latin America. So, for you to have left there to come listen to me is an honor, and thank you for your time. If I go back to 2017, obviously we were living in a different time in Latin America. I think digitalization is much earlier. We are about to turn 8 years since the launch of Ualá. Today we have more than 10 million customers throughout Latin America and we operate banks in Argentina, Mexico, and Colombia, which makes us different from the fintech we were when we started. And if I go back to that moment, what I would say is key is to be very clear about what you want to build. We had five features we wanted to do in the original value, and in fact, we did 3.5 and then launched because we didn't have capital for more. Our seed round was $200,000. In fact, the Soros partner who wrote the check told me it was the smallest check he had ever written in his life, and that the lawyers had cost more than the check. And I said, 'Well, but it's Argentina, we have to live with what we have.' And with that, we built the product. So, we had a very clear idea of what we wanted to build. We had a set of features. In this business, I think the most important thing, if I go back to those moments, is to be able to ship the product, which is absolutely necessary to test with real users, real issues, and real problems to see what is solved, in order to then go and seek more capital to build the team that allows you to do the full stack. So, it's just about seeking what is necessary to do the essentials, and from the essentials, build a team, build a board, a cap table. And now that I have to give back to the community with 17 Sigma, which is the Venture Capital Fund that I co-founded with Bianca who is here and manages it, we are looking for entrepreneurs who can do that, be resilient, build the minimum viable product to grow the team, grow the vision, and go for the capital needed to do the full stack.
And you mentioned Ualá is 8 years old, so you went from that million-dollar seed round and have been through several waves of venture capital growth in the region. When you raised that million-dollar round, we were recording about a billion dollars invested in the entire region. Today, that amount is invested in about two or three months. So the region has grown a lot, and even in 2021, we recorded up to $16 billion in a single year. How do you think the appetite has been changing, especially with this last round you raised for a total of $366 million? How did you manage in this more challenging environment to raise that capital?
I think the most important thing is to have long-term partners. When I started Ualá, I said it would take us 7 or 8 years to achieve what we really wanted, the full stack, and I spent two and a half years doing a bank migration and 26 months waiting for regulatory approval in Mexico when I bought a bank. So, in the business we are in, it's not a vertical SaaS, it's not a business where I can hire 10 people, create a product, ship it, and then it's pure economies of scale. What we are doing is trying to redefine the financial system. We have a financial entity that can offer payments, collections, services, investments, credit, and do it with artificial intelligence. All of that takes a long time to build, and that's what creates a moat, a defense. Why? Because there are very few banks in our region. In Mexico there are only 50, in Argentina 60, in Colombia 35, while in the United States there are 4,750 and in Europe 3,800. So, the difference is creating something for the long term and finding partners who can believe in the long term, build with us, help us, and find an agreement that allows us to do it in the long term. We see the same rounds the same way we saw a million, we saw it in the last round where we raised what we raised because we believe in the future and we are just getting started. Our mission hasn't changed since day one: to bring financial services into the 21st century. That allows us to provide radically more efficient services with far fewer people, passing the benefit to the customer. That's why today, the best yield of any bank account in Argentina is at Ualá. It yields more than any money market fund from any fintech and any bank. Most banks follow the money, it yields zero, with us it yields 37 or 40% if you use the account. In fact, mine yields 45% because I use it so much. So, the more you use it, the more it yields. That is something unique that you can only do with technology and efficiency. And we focus on making the best product, enabling financial inclusion, giving accounts to everyone, and then being able to do all those services, but without long-term partners, it would be impossible.
And let's stay on the topic of partners, because when you look at the list of Ualá's investors, obviously there are huge global investors, but for me, something that stands out is also the presence of corporates. For example, Tencent has been there for several years, more recently Alliance, one of the largest insurance companies, and also the entry of Televisa, Univision. So, for me, it's interesting what they see as attractive in investing in a fintech and what synergies are created internally by having those corporate partners among Ualá's investors.
Well, I never talk about what hasn't launched, but we have partners with whom we are building products from whom we learn. From Tencent, which has been an investor since 2019, we have learned how to ship. They have even helped us find the hardware. At Ualá Business, we offer hardware to merchants so they can collect with radically lower commissions than the competition, and Tencent helped us build that product, find it, and make the hardware, which of course is difficult to make and the logistics are difficult. With Allianz, we create products and they have also helped us understand how to operate as regulated entities. When you are a bank, and in Argentina we are not only banks, but we have an investment fund management company that allows us to create investment funds with lower commissions than the competition and therefore more yield for the user. These are things you have to learn from the best in the world. Allianz is the largest insurer in the world. Tencent is one of the largest tech companies in the world, and they help us create products and think long-term and how to build value with them for the future. What I think is that if we look at the world, digitalization is happening faster and faster. In China, digital payments are 70% of payments. In Europe, they are already over 50%. In the United States, they are close to 50%. In Latin America, we are at 20%. So, one of the few things I know is that tomorrow there will be more digital payments than today. So, if I can make services 90% cheaper than my competitors, I can serve more people at a better cost, with more efficiency, and that allows me to reach a more diverse audience, and we see more and more people coming to Ualá. In fact, yesterday was the absolute record in dollars bought and sold on Ualá since we launched the feature in 2019. So, things are built over time and with partners like that. It's much easier than learning to operate as the entities we have to be, which in our case is a bank, and I'm very happy that other competitors of ours have realized that only banks win banking, and that's why they are looking for banking licenses.
Yes. And there, I think it's very interesting because you were quite pioneers in that sense of seeking banking licenses from the beginning, meaning you operate in three countries and in all three you have licenses. How was that integration process? For a tech-based fintech to then integrate those more traditional operations of three entities.
