RIO DE JANEIRO, BRAZIL – Brazilian billionaire Eduardo Saverin, one of Facebook co-founders alongside Mark Zuckerberg, has boosted his stake in Mexican startup Yalo, the first and only company in Latin America to receive an investment from his fund, B Capital Group.
After having led the company’s Series B round last year, this Wednesday, the manager announced that it was once again the leader in the startup’s US$50 million Series C round.
Founded in Mexico by entrepreneur Javier Mata, Yalo (formerly Yalochat) specializes in a market dubbed chat commerce. In practice, these are online sales and services through messaging apps such as WhatsApp, Telegram, and Messenger. According to the founder, the goal is to take companies to the channel where consumers want to be served.
Brazil, as one of the world leaders in the use of social networks, quickly became an important market for the startup, which has operations throughout Latin America, the United States, India, and Southeast Asia. Among its over 1,000 clients in 41 countries are multinationals such as Coca-Cola, Nestlé, Unilever and Walmart.
In an exclusive interview with EXAME IN in Brazil, Saverin said he believes that the solution created by Mata and his team of 250 people has high chances of placing Latin America on the map of the great global software suppliers.
“The region has great successful examples, such as Rappi, Loft and Nubank, but since the local market is big enough they haven’t needed to win over the world yet. In Yalo’s case, as its client companies are global industries and consumer goods companies, they ultimately take the startup to other countries. Thus, the company only opens a new market when there is existing demand. It is similar to what Facebook did in the beginning when it opened the network to new universities that had a significant volume of registered users,” says the investor.
It is precisely in business internationalization that B Capital Group can help Yalo. The venture capital manager, founded by Saverin with partner Raj Ganguly (a former Bain Capital veteran) in 2015, has over US$1.9 billion of assets under management and seeks corporate-oriented businesses in healthcare, finance, and digitalization industries around the world. In total, there are nearly 50 startups in the portfolio, most of them based in countries in Southeast Asia, Europe, and the United States.
“I like to be engaged and close to our investments, but entrepreneurs like Javier hardly need any help on a day-to-day basis. In Yalo’s case, we help with international expansion and sales acceleration,” says Saverin, who has lived in Singapore since 2009.
B Capital’s partnership with the international consulting firm Boston Consulting Group is also a differential for investments. According to Mata, the consultants’ support helps large potential clients understand how they can use Yalo in their digitization process. “Going to companies with B Capital and BCG helps us show the potential of our technology for business,” says the startup founder.
But since the pandemic began, showing customers the importance of an online sales channel has been an easier job for the company. With the need for social distancing, brands worldwide have needed to seek ways to connect with customers online to continue operating. Coca-Cola, for one, began using the company’s solution to sell beverages to over 500,000 stores in Brazil through WhatsApp and experienced a 20% growth in total sales volume.
Driven by customer success, Yalo posted a 120% increase in revenue in 2020 compared to the previous year. Now, with the new US$50 million in hand, the startup wants to deepen its presence in Latin America and Southeast Asia, as well as develop more solutions within its tool. The company’s ambition is to offer customers more options to work with digital marketing and payments within the chat apps.
The room for growth is tremendous. According to a BCG study, the chat commerce market is currently worth US$35 billion per year in emerging markets and could reach US$130 billion by 2025. According to Mata, given this scenario, the company does not run the risk of “starving”, but needs to be careful not to suffer “indigestion.” With so many opportunities triggered by the growth of the e-commerce market worldwide, the founder is focused on keeping the business operating in the sectors in which it specializes: industry, retail, consumer goods, and financial services. “The challenge is to remain focused and continue delivering good results to customers,” says the entrepreneur.
For Saverin, Yalo’s history motivates him to seek other investments in Latin America for B Capital’s portfolio. The Brazilian assures that he is interested in investing in the local community and says that the doors are open to receive entrepreneurs who are thinking of creating businesses from the region to the world. “Capital is currently widely available in the market, but we can really help with international expansion. What we are looking for are people who are passionate about the challenge of transforming huge industries,” says the investor.
Billionaire before 30
Mark Zuckerberg’s former college classmate at Harvard University, Eduardo Saverin was one of the first to work on the social network founded in 2004 and initially named “TheFacebook.” Highly skilled in mathematics and finance, Saverin was in charge of the platform’s financial management in its early years. Facebook’s first physical address was the home of the Brazilian’s parents in Florida when the company’s launch was formalized. He also helped Zuckerberg raise revenues for the platform, contacting announcers interested in running advertising campaigns.
With the growth of the social network, Zuckerberg and his colleagues decided to move to Palo Alto, California, to be closer to big techs and investors. However, Saverin decided to stay in Boston to finish college and continued working remotely, managing finances and seeking advertisers. But the distance hindered the relationship and disagreements between the founders grew, until Saverin stepped down from the business because he disagreed with some decisions.
Years later, Saverin and Zuckerberg disputed in court the Brazilian’s equity stake in Facebook (he had invested US$19,000 in the website in the first year, the same amount invested by Zuckerberg). The dispute ended in 2009 with an agreement between the two ex-colleagues. Facebook acknowledged Saverin as co-founder and the Brazilian kept a 2% stake in the company. His fortune is currently estimated at US$18 billion (largely due to Facebook shares), which makes him the second richest Brazilian in the world, behind only entrepreneur Jorge Paulo Lemman, according to Forbes magazine.
Born in São Paulo in 1982, Saverin moved to the United States with his parents at the age of 10 and grew up in Miami, Florida. After graduating from Harvard with a degree in Economics, in 2009 he moved to Singapore, where he lives to this day. In 2011, he renounced his American citizenship, which led to criticism at the time that he was seeking to evade taxes levied in the country (something he has always denied).
In 2015, he founded B Capital, a venture capital fund, along with Raj Ganguly, another ex-Harvard classmate, to invest in technology companies. The first fund they set up raised US$320 million – with part of the funds coming from the Brazilian himself.
Source: exame