The J Curve with Gaston Irigoyen, founder & CEO at Argentinian fintech infrastructure startup Pomelo: five big ideas

I freaking love emerging markets in Latin America and been digging into Argentinian tech ecosystem in the last couple of weeks.

Despite the many economic and political crises or perhaps because of it, Argentina has produces some of the most exciting tech companies in Latin America. So before we transition to the five big ideas from my interview with Gaston Irigoyen, founder and CEO at Argentinian fintech infrastructure startup Pomelo, here are some curious facts about tech ecosystem in Argentina 👇🏻

🇦🇷 The first Latin American software company to initiate a public offering on the New York Stock Exchange is Argentinian Globant.

💥 The largest online commerce and payments ecosystem in Latin America is Argentinian Mercado Libre. They are present in 18 countries including Argentina, Brazil, Mexico, Colombia, Chile and Peru and are market leaders in each of the major countries they are present.

🦄 Argentina has one of the highest rates of unicorns per capita in Latin America and has produced at least 8 tech unicorns. Including: Mural, Auth0, Despegar, Globant, MercadoLibre, OLX, Prisma Medios de Pago, Tiendanube/Nuvemshop and Ualá. Auth0 was acquired by Okta. Despegar and Globant trade in the NYSE. MercadoLibre trades on NASDAQ

💸 Argentina’s financial system, with a huge boost in fintech, is approaching full coverage of its population as per Argentinian Central Bank. Mercado Pago (the fintech subsidiary of Mercado Libre) is leading the race towards financial inclusion. The overall fintech ecosystem has experienced massive growth: the number of fintechs went from 158 in 2019 to 343 in 2023 (Finnovista and Visa)

🚀 The largest venture capital firm based in Latin America Kaszek is Argentinian. It was founded by MercadoLibre co-founder Hernán Kazah and the company’s ex-CFO, Nicolas Szekasy, both Argentinians

🔬 Argentina has the robust deep tech startup ecosystem, valued at $1.9B+ or ~30% of the total value in the region. The majority of these startups focus on biotech (67% of the local deep-tech ecosystem). There’s a notable emerging sector in Spacetech, spearheaded by Satellogic

🧠 Argentina boasts a highly educated workforce, with 13,000+ IT graduates annually and a tech sector that grows at ~10% annually and IT exports surpassing $6B. The cost of hiring software developers in Argentina is ~50% of that in North America or Europe without compromising on quality or team productivity

So Pomelo and Gaston Irigoyen. What sparked my curiosity and desire to fly to Miami for IRL recording with Gaston?

Well, few things:

👀 Pomelo is one of the very few startups in LatAm that has two biggest and most reputable LatAm-based VC firms Kaszek and Monashees on their cap table

💰 The company went from 0 to $109m in VC funding, 3 to 300 employees, 1 to 6 markets in Latin America in less than 3 years. I was itching to distill some practical lessons from Gaston’s approach to fundraising, hiring and managing growth

💪🏻 Gaston is a third-time founder and in the very beginning of his career he was employee #5 in Google LatAm. Tons of learnings from that experience that he has transferred to Pomelo

⚡️ LatAm is emerging as a global leader in fintech. From my perspective, fintech infrastructure startups are the backbone of this growth

🌏 Horizontal GTM. Opening 6 markets including Brazil, the toughest of them all, in 2 years is no joke and definitely far from convention go-to-market approach. I was really interested in having a conversation about the upsides and downsides of this approach and why it was the right decision for Pomelo

AND NOW FINALLY FIVE (BUT MAKE IT SEVEN JUST THIS TIME) BIG IDEAS FROM MY CONVERSATION WITH GASTON

1️⃣ Argentina’s strategic advantage is high quality education and a highly skilled talent pool proficient in English and with global ambitions and experience

The cost of software development is 2x lower than that in North America and Europe without compromising quality

2️⃣ Being global from day one might be a huge de-risker and competitive edge for startups. Especially in turbulent markets like those in Latin America

The main challenges are operational and product complexity and capital intensity

3️⃣ Having firsthand experience with the problem you are solving informs go-to-market strategy and 10x time to market

Deep understanding of who the customer is and the scale of their ‘pain’ allowed Pomelo to build deeply regional thesis and get to 100 B2B clients in 2 years and 3x YoY revenue in 2023

4️⃣ Pomelo’s hiring framework is hiring plug and play people, those who have suffered from the problem Pomelo is solving and either worked with the founding team before or come from close network

This approach offers a lot of insight, speed and differentiation and helps shorten the learning curve which in financial services can be very long

5️⃣ There’s no such thing as regional product. The regional value prop is built by having uber local product strategy

The way in which you execute credit card business in Brazil is very different from the way you execute it in Mexico, Colombia or Peru

6️⃣ In financial services understanding legal and regulatory aspects of the business is super important.

Some founders especially those coming from outside of regulated industries don’t pay enough attention / make investments in legal / regulatory area and risk management

7️⃣ The secret sauce of successful fundraising in adversity, assuming that you have a very strong business, is well designed and well run process

Other factors that matter include etiquette and story telling. Gaston advises founders to do media trainings to enhance their story telling techniques

Gaston’s books recommendations: : Outliers by Malcolm Gladwell; The Outsiders by William N. Thorndike; Winners and Losers by Don Schemincke, and more

Gaston’s advice to startup founders: two good years of hardcore startup experience go much longer way than doing an MBA

You can watch the full interview with Gaston on Youtube 👀👇🏻

Or listen / watch the episode on Spotify 🎧

Before you go, here’s some content that I’ve been exploring recently:

Lessons from Keith Rabois accumulated by Mo Golshan on Notion (shared by Tyler Desk first)

Failure doesn’t exist - a shot of inspiration by late Kobe Bryant

Invest like the best with Ali Hamed - pretty cool unconventional take on finding investment opportunities

Thanks for reading,

Olga