Diego Rios

TBY talks to Diego Rios, Co-founder & CEO of Veci, about his mandate, differentiating from competition, and priorities for 2023.

What is your mandate?

Veci is the super-app that helps entrepreneurs and SMEs in Latin America to sell more and obtain the credit they need to grow their businesses. Small businesses are the major driver of Latin American economies as one of the main sources of employment, which is why our efforts aim to help SMEs sell more and get more credit. For example, when we go to European countries, small companies contribute more as a proportion of GDP than in Latin America, which basically happens for three reasons: The first reason concerns payments, SMEs do not accept digital payments because they are expensive and complex. The second reason is they lack credit, and because of the lack of information on them. Therefore, if you have a small business and you go to a bank to request a loan, you cannot demonstrate your income, whereupon the bank refuses the loan. The third reason is that they are survival businesses, and do not make enough to be profitable. We realized this, and it underpins Veci’s mission to make businesses sell more and obtain the credit they previously lacked, achieving both with a single application.

How do you differentiate yourselves in a crowded sector?

This has two approaches. First, you cannot build a great business on just one vertical or one single product. Consider payments done with cards; in Colombia, your margin is around 1% for each transaction, so building a great business with a 1% margin is a real challenge. Second, evidence shows that people in LatAm do not like too many apps on their phones. That is probably why Veci is so successful because, with a single app, you have everything you need to run your business: a banking account, all pay-ins and pay-outs, including Alternative Payment Methods, an online store, and loans. With Veci, you can receive payments from physical cards or even online; you can pay almost whatever you want, including all utility bills, suppliers and taxes, and even earn cash back for doing so. Also, you can get paid from digital wallets without having an actual account in any of those wallets. In addition, those transactions you make give you access to pre-approved loans. Our most recent innovation is e-commerce, which you can set up for free on your phone. This multi-vertical approach enables us to obtain a relatively small margin for many transactions, so, we can build a profitable business overall. Our users understand that with Veci they have all they need to run their business, so they do not need another app or other player. This is our bet; our game is to be user-centric, offering them all they need to grow their income or sales and get the loan they never had before.

What has been the user reception?

We have 35k users across 31 Colombian states and are processing over USD 2 million per month. Our strategies are fully digital, we do not have people on the streets, which spells low operational costs, and we are actively empowering neighborhood merchants.

How do you see Fintech disrupting traditional models of finance?

Traditional banks have learned how to remain competitive over time. They have also adopted technology to disrupt their own business. The way fintech can be competitive is by learning something from these traditional banks, such as how to make smarter decisions, and manage risk and reputation, for instance. Therefore, fintech can disrupt by learning from traditional banks and leveraging speed, because it is all about speed and cooperation.

What is your approach to growing the company?

We launched Veci at the beginning of the worst winter for startups of the past 10 years. But that makes us much more responsible in our decision-making. It is not about growing at all cost. When we launched, we decided that business was not about growth but profitability. Instead of having 200,000 users, we have 1,000, 10,000, and 30,000 well-attended ones. I tell the team that Veci is a revenue-driven startup. And the way to be revenue driven is by serving our users as best as possible, without looking for 200,000 additional ones. The big plan is to achieve break-even in 2023. The company must be profitable. We definitely want partners in this. At that time, we will seek out the right ones who believe in our mission and can help us build a financial business and extend our operations abroad. The strategy confirms that we are building a profitable business to attract adequate investors.

Are there any other priorities for 2023?

We must build a great app, and a great business to help customers navigate these challenging times. Our priority is to help SMEs to increase their income and obtain loans to do so, we talked before about the profitability of our business and that is for sure having the best product in the market as well.