Rebuilding Trust Through Consumer Credit in Venezuela | Pedro Vallenilla, CEO & Co Founder of Cashea

CHAPTERS:

1. Introduction and Early Life
   • Mack Meyer introduces Pedro Vallenilla and discusses his upbringing and early influences.
2. Entrepreneurial Beginnings
   • Pedro shares his journey into entrepreneurship, including his early ventures and the pressures of following in his family's footsteps.
3. First Major Success
   • Discussion about Pedro's first successful startup in Venezuela and the challenges he faced.
4. Failures and Lessons Learned
   • Pedro talks about the failures of subsequent startups and the lessons he learned from those experiences.
5. The Birth of Cashea
   • The story of how Cashea was founded, its impact on Venezuela, and the challenges of launching a fintech company in a difficult economic environment.
6. Building Trust and Credit in Venezuela
   • Pedro explains how Cashea has helped rebuild consumer credit in Venezuela and the importance of trust in their business model.
7. Future of Cashea
   • Discussion on the future plans for Cashea, including expanding financial services and becoming a super app for Venezuelans.
8. Reflections and Closing Thoughts
   • Pedro reflects on his journey, the impact of Cashea, and his pride in the company's achievements.

Cut The Check w/ Mack Meyer is a podcast about venture capital, startups, and entrepreneurship in Latin America and beyond.

New episodes drop every week.

Subscribe on Spotify

Stay connected with us on Twitter, LinkedIn, Instagram,

Have a guest suggestion? Email us at team@venturecapitalmx.com

Transcript

Mack Meyer (00:01)
Pedro, thanks for joining me today.

Pedro Vallenilla (00:03)
Thank you for having me. Amazing to be here with you. Having the opportunity.

Mack Meyer (00:07)
No, I have been a fan from afar. I've heard some great things about you, not only from Cashea but for you as a person. So can't wait to get into Cashea. But before then, it would be wonderful to kind of learn about a little bit about your upbringing. What inspired you early on? Did you have any passions? And then we'll go from there.

Pedro Vallenilla (00:27)
Yeah, going a bit back, maybe family, ⁓ I was brought up in a family that business was a thing. My father, my grandparents, my uncles, and early in life, ⁓ I didn't know what my passion will be or what would it be good at, and potentially could I be successful in business as they were, and that pressure started building up.

And when I got to college, ⁓ that's when it really, the pressure continued to build up. And in that moment in time, I've already been an entrepreneur. I've sold a drum set that I had, bought things from MercadoLibre, and that's the way I overall maintain them. But that overall curiosity, because of my upbringing, ⁓

Me trying to figure out what I was good at in life was like a, it's a bug and it's something that it was like from very early on.

Mack Meyer (01:30)
Yeah.

Yeah.

Yeah. And I have a question because I think, you know, growing up in a family where there's multiple entrepreneurs, potentially your father, uncles, close friends and family. Do you think it's a double edged sword where you see what greatness could be, but also like there's this pressure, right? And maybe self induced. was that the case for you?

Pedro Vallenilla (01:59)
100 % and at the end, I remember going through therapy and they were asking me and I don't know, I had the blessing of having my grandparents names from both sides and at the end, was Pedro Julio and Pedro from my father and Julio from my mother and they were amazing businessmen. And my mother always told me, this is the best name that I could have ever given you. It's like, mom, no.

Mack Meyer (02:13)
Mm-hmm. Wow.

Pedro Vallenilla (02:29)
So it's, it's, ⁓ and it's, it was like, and, and I really struggled early on. So I really struggled, ⁓ to get my footing, to really understand that I could generate some value. ⁓ and it was like a, really high bar. it's like, well, I've been given this privilege, ⁓ to learning from them, but am I going to be able to follow those footsteps? Am I going to be able to execute like them?

Mack Meyer (02:29)
It's the worst for me.

Pedro Vallenilla (02:58)
Am I gonna fail? It's like early on it was like, yeah, thank you, but not so thanks. It was like, yeah.

Mack Meyer (03:04)
Yeah, no,

everybody goes through it. Maybe these entrepreneurs are really tough. ⁓ But you mentioned you had the bug, the entrepreneurial bug, but there was a few endeavors you started before Cashea Do you want to share a little bit about what they were and then eventually how that inspired you to get to Cashea?

Pedro Vallenilla (03:11)
Hmm.

Sure. ⁓ The first thing is as I started struggling in school, my father passed away almost 12, 14 years ago, sorry. And in a way, the best decision he made or the best decision on my upbringing was cutting me off, saying, hey, if you don't want to go to college, if you are not going to do good in grades and good in school, I'm...

So you need to, yeah, you need to figure it out. And as my sisters were in this path or this happy path, I was in this, yeah. And in that moment in time, I started tinkering. I started trying to understand how I could make ends meet. And what I started doing was buying things from my friends and selling them from, through MercadoLibre.

Mack Meyer (03:53)
I support you. Yeah. Wow.

Yeah.

Mm-hmm.

Mm-hmm.

Pedro Vallenilla (04:23)
And ⁓ that started to be successful and started to earn money to cover my bills. But I appreciate that moment in life because my dad just, hey, take responsibility. And this was my side gig as I was struggling ⁓ through college, but I wanted to really build something. And in that process, I decided to join...

Mack Meyer (04:26)
Mm-hmm.

Yeah.

Mm-hmm.

Pedro Vallenilla (04:51)
extracurricular in college and decided to go and represent my university in Taiwan for a model in UN and I hated every day of that process going to getting ready to get there. It was I am doing this because if not, I'm gonna be kicked out of my house. I'm already being cut off. I don't want to be kicked out of my house. I don't want to be homeless. I already cash poor. I don't want to be homeless and

Mack Meyer (04:52)
Yeah.

Mm-hmm. Wow.

Ugh.

Yeah.

I don't want to be homeless.

Yeah.

Pedro Vallenilla (05:21)
In that trip, and I struggled every day until I got to to that, I was in San Francisco and bumped into Groupon. ⁓ And my, in my, into, into, just as, as soon as I got into the plane, I bought this magazine and page number four, started reading about Groupon. And this is a 10 hour flight to Taipei. So, and I.

Mack Meyer (05:35)
Mm-hmm.

Yeah, you could go back and forth on this magazine all you want.

Pedro Vallenilla (05:50)
Yeah, and I was like, I fell in love with the concept. I saw this was a great opportunity potentially to do this in Venezuela. Loved my e-commerce or I was getting in love with e-commerce because I'm from Cali. And I said, hey, this is a great thing that we could potentially do. And as I was flying into Taipei, said, hey, as soon as I get back, I'm going to do this. I spent that week in Taipei, didn't do anything.

about the coursework that I should have been doing, but reading about this company. I went back to Venezuela, told my dad that I was going to drop out of school and that I was going to launch this business. And he said, in that moment of time, I thought I'm going to kick you out of the house. But he basically said, me was Pedro, if you're so decided that this is what you want to do, I'm going to support you.

Mack Meyer (06:24)
my God.

Yeah, yeah.

Pedro Vallenilla (06:49)
⁓ I'll try to bring some investors in. Let's try to make this work." At the end, he told me a year later from that, that he just wanted to be supportive and because he knew that it could potentially fail, but 100%. But what happened was that 48 hours later after we launched, three months later, sorry, 48 hours after launch, we have sold $100,000 in GMV.

Mack Meyer (06:51)
Mm-hmm. Yeah. Mm-hmm.

Yeah.

Yeah, but were you surprised by that response by him?

Mm Yeah.

Pedro Vallenilla (07:18)
And we became, yeah, yeah, he was like, whoa, okay, now let's get into this. we became the biggest startup to have ever been launched in Venezuela. And I was 21 years old at the time. And yeah, at the end, this was supposed to be a life learning ⁓ experience of failure. And it became a huge success.

Mack Meyer (07:20)
and he thought there's no way this was gonna happen. He was looking at you like, whoa.

Is this fraud?

Wow.

Right. Wow. So that was kind of the first basically successful endeavor you launched, right?

Pedro Vallenilla (07:54)
And then it followed, but followed with many failures. And 21 years all the time, you can imagine that you could, yeah, you know everything. okay, yeah, at the end, okay, I dropped out of college. I went against my dad. This is working amazing. I'm doing, we're doing a lot of money. We're growing very fast. We have become the biggest startup that has ever been launched in Venezuela. And it's like all these things started to happen and...

Mack Meyer (07:55)
Yeah.

Yeah.

You think you do.

Pedro Vallenilla (08:24)
What could potentially go wrong, right? And I start tinkering with start number two, it failed. Launch start at number three, failed. Start up number four, failed. And what I loved through that process was it wasn't an easy and straightforward as I initially thought it would be. And in that moment in time as well, my dad passes.

Mack Meyer (08:36)
Oof.

Pedro Vallenilla (08:54)
pass away. ⁓ And it's like, it's not only, I believe in a way God or my dad just prepared me to have this opportunity to understand how to run a business, ⁓ what I fell in love with internet, with startups, but ⁓ basically, ⁓ yeah, don't know, a shot of humility, a reality ⁓ with the failures that fall.

Mack Meyer (09:10)
Yeah.

Pedro Vallenilla (09:23)
my successful initial startup.

Mack Meyer (09:28)
Yeah. And I was going to ask, and you could probably cover a whole episode just on lessons learned, but when you think of the first success and it's two dis, disconquento, right? Disconquento, disconquento, disconquento. ⁓ you thought you knew a lot. You probably knew less than you thought, but was there a takeaway from the other two or three failures that you said, Hey, I'm going to do this differently with Cashea.

Pedro Vallenilla (09:41)
To the squinton, to the squinton,

Mack Meyer (09:57)
What was one takeaway?

Pedro Vallenilla (10:01)
Many. ⁓ Yeah, many. ⁓ But if it's one takeaway was that the investors that you choose early on and the team and your co-founders is the most important thing of all. And for me, when we decided to launch Cashea and

Mack Meyer (10:02)
Many.

Mm-hmm.

Pedro Vallenilla (10:28)
there's a backstory and why I ended up with Cashea because startup number four, pivoted ⁓ and then moved to Santiago, Chile. That company grew. That startup after failing two or three in the middle, that became a company. And I decided to pivot to full-service restaurants just before COVID. ⁓ That company was going amazing, ⁓ but COVID hits and yeah.

Mack Meyer (10:31)
Mm-hmm.

Mm-hmm.

Yeah.

Okay, right.

Yeah. Yeah.

Pedro Vallenilla (10:57)
I'm bankrupt in that moment in time. I feel as a failure to my wife and kids. ⁓ Credit cards started calling me. ⁓ That company ⁓ now went to flames and I failed again. And I said, I can't believe that after moving to Santiago, Chile from Venezuela, after growing this company in eight countries, I decided to go after an industry that is the most affected after COVID. ⁓

Mack Meyer (11:10)
Mm-hmm.

Yeah, what are the chances?

Right, yeah.

Pedro Vallenilla (11:26)
And it's like,

that moment I time it, it's God, again, is punishing me and I don't know why, I do not know why, but I really understand that I need to get a job. There's no way I can continue through this madness. And as credit cards started calling me, ⁓ the only job that I was offered back was on a credit card collection agency. So they were calling me in the morning to collect from me and I was interviewing with them.

Mack Meyer (11:38)
Yeah.

Yeah, right. Yeah, of course.

Pedro Vallenilla (11:55)
in the afternoon and this was a startup that just raised a zero's a and at the end.

Mack Meyer (11:57)
Wow.

Yeah, you knew that you could work

there, get paid and settle the waves, settle the boat. Wow. Yeah, yeah, yeah.

Pedro Vallenilla (12:08)
They didn't know I was in debt. So I

was doing that without their knowledge. yeah, the end, fell in love with consumer credit. And I told my wife that I would never venture again. But now here I am.

Mack Meyer (12:15)
Mm-hmm. Yeah.

that was just a small little white lie. But you know, there's like a some, there's a very famous, like, guess, well known founder investor in the US called Naval. And he always talks about some of the best founders are able to always start over again. Like there's this thing where if you're always willing to go back to zero, you're going to do something amazing. And you've done this like many times. And I'm so impressed because it just keeps showing your resilience. And that's just pretty remarkable.

So you join the credit, I guess, collection company, and then that inspires you ultimately with this concept of buy now, pay later, correct?

Pedro Vallenilla (13:03)
Yeah, Basically what happened was I was there. I was really happy. For the first time in my life, I wasn't worried about how to pay wages or how to run a payroll. It was like, hey, I'm being ⁓ a very thoughtful and considerate dad to my kids. I'm being a considerate husband to my wife who had been supporting me. So she has been along all the way from first...

Mack Meyer (13:08)
Yeah.

payroll.

Yeah. ⁓

Pedro Vallenilla (13:32)
So she was ⁓ my girlfriend when I was struggling at school and she went from there all the way to two kids. And in that moment in time, I said, hey, I'm going to stay here. I'll continue to learn. There's so much ⁓ that I need to learn. learned a lot from Colektia, but one of my early investors calls me out and tells me, and this was one of my failed startups and tells me, what are you doing? And I'm like,

Mack Meyer (13:41)
Wow.

Mm-hmm.

Pedro Vallenilla (14:01)
I'm working in this company. Yeah, this is amazing. I failed Jessica. Yeah, I'm happy. Conversation number two, gets, okay, let's talk about your learnings. What has happened? Why did you believe you failed? Why did you, why, why, why, why? And basically in call number three, after we end up call number three, he tells me, Pedro, I believe you have the right scars. If you ever want to venture again, I'm going to be your first check.

Mack Meyer (14:03)
Yeah.

I'm happy. Yeah.

Call me. ⁓ no, no. Probably the worst thing you could hear, and your wife never wanted to hear from this guy. If you told her about this, at the time, I'm sure you have, she's like, why did you pick up?

Pedro Vallenilla (14:32)
Call me.

No, she was so pissed. was, she basically told me in Spanish, said, we had this conversation. We started having this conversation. It took like a 60 day, 60 days for me to finish making my decision. But in day number 60, I don't know, two months in, I say, Jessica, I'm going to make this decision. ⁓ I'm going to leave my job. I'm going to start this startup. It's going to be called Cashea. ⁓

Mack Meyer (14:45)
Ugh.

of course. Yeah, yeah.

Yeah, yeah. ⁓

Pedro Vallenilla (15:12)
I'm going to do this today. And she basically says, no inventes this, like do not do this. And our little one that is walking by and says, Papa, no inventes this. Papa, do not do this. Yeah. It's like, and at the end, we, in that moment in time, Jessica and I knew that, that I needed to execute, that I needed to, yeah, to quit my job. And, and she has to be supportive.

Mack Meyer (15:17)
No. Yeah. This is not. Yeah. Yeah.

No.

no.

Yeah.

Pedro Vallenilla (15:40)
Well, by Fort Gassier ever since, yeah.

Mack Meyer (15:42)
Yeah,

amazing. that's just in some ways it's like serendipitous where as much as she knows maybe it's not what she wants, she knows that it's going to burn. It's like burning in there. You know that you're ready for more. So the fact that she's so supportive is a testament to her and in your guys's relationship. Amazing. Wow. Amazing. Yeah.

Pedro Vallenilla (16:01)
It's impossible without them.

At the end, people talk a lot about the resilience on founders, but once you're married, it's the resilience of your partner that walk you through the ups and downs. And at the end, I lost all the leave that I could potentially do this. I was like, there's no way I'm going to do this successfully. ⁓ I've lost all the leave that I'm able to execute.

Mack Meyer (16:23)
Yeah.

Pedro Vallenilla (16:30)
I failed and I will never do this again. And at the end, she had this strong believing in me that said, okay, if this is it again, let's do this and I'm going to be supportive. And at the end is her resilience and her walking beside me that has made the difference. And yeah, so I'm so blessed. Yeah.

Mack Meyer (16:51)
Yeah,

truly inspiring, honestly, Pedro. There was a part there where I started feeling these goosebumps. I'm like, this is crazy, but this is real. So, Cashea give me the story of what it is and why it's so important to Venezuela, and then we can get in the product and so forth.

Pedro Vallenilla (17:08)
Yeah, 100%. Basically, in Venezuela, after hyperinflation, ⁓ credit says to exist. a country, Venezuela was one of the most interesting booming economies in the 20th century in Latin America, long-standing democracy, a country that had been doing amazing. after 2020, we have been having very difficult years.

Mack Meyer (17:24)
Mm-hmm.

Mm-hmm.

Pedro Vallenilla (17:37)
In 2017, hyperinflation hits and credit cease to exist. So imagine a country that was completely wiped out, ⁓ credit cease to exist and Venezuelans had no access to credit whatsoever. So if you got one of the biggest economies, the biggest oil reserves country in the world, ⁓ oil rich country that because of ⁓ poor management ⁓ view

Mack Meyer (17:52)
Yeah.

Mm-hmm.

Mm-hmm.

Pedro Vallenilla (18:06)
basically, the banking system collapsed, the credit system collapsed, and we were starting from zero. But things started changing. And one of the things that changed was Venezuela effectively dollarized. And after that, a company called Yummy that went through Y Combinator launched this ride hailing and raised money to launch this startup.

Mack Meyer (18:23)
Mm-hmm.

Gotcha. Mm-hmm.

Pedro Vallenilla (18:35)
a of a big sum of venture money that was raised. it's like, is perfect timing for us to do something in Venezuela. And I told this investor, okay, I'm going to take your money, but we're going to be relaunching consumer credit in Venezuela. So Cashet is a buy now, later. And basically what we have done is we have relaunched consumer credit in Venezuela. As of today, we're doing over 2.5 % of GDP.

Mack Meyer (18:38)
Yeah.

Yeah.

Mm-hmm.

Pedro Vallenilla (19:05)
Venezuela's GDP goes through cashier over 35 % of population, auto population in Venezuela has cashier in their pocket. We have become the biggest financial institution consumer facing in our country. And we're doing over 1.3 by now pay later credits per second. And per second, per second.

Mack Meyer (19:27)
her second.

Wow. So I mean, when you hear about product market fit, I think that defines it in some ways. ⁓ But yeah, yeah. Right. I think if you talk about something that actually has product market fit, this is it. But explain to me, from what I understood at first, it was like a little bit of like you thought you'd launch because I've researched you, I've watched a few interviews and you thought it would just happen. But there was a little bit of a disconnect at first. Right. So maybe take me through.

Pedro Vallenilla (19:38)
⁓ That's a great definition, yeah.

Mack Meyer (19:59)
you launch, how did you get your first couple of merchants? And then there's the merchants and then there's also the consumers.

Pedro Vallenilla (20:05)
Yeah, remember that when I launched my first company, I was 21 years old and we did $100,000 in GMV in the first 48 hours. So, Venezuela, there's no credit. ⁓ People are going to flock to this. ⁓ This is going to be an instant hit. And on the contrary, ⁓ first day zero, ⁓ second week zero. We start paying people just to get into that.

for us to really understand if this potentially could work. And yeah, we had messed up our go-to market and the way we designed ⁓ our initial strategy. And I call on an advisor of mine that today runs an amazing ⁓ CEO of an amazing public company in the U.S. and he tells me, Pedro, what are you doing? You're supposed to be doing amazing.

Mack Meyer (20:34)
Yeah. Yeah.

Mm-hmm.

Pedro Vallenilla (21:03)
offering zero interest loans in a country where credit does not exist, you're booming, right? And I know nothing's happening. And he tells me, you're going to stop everything that you're doing. You're going to call me right away and you're going to explain to how are you launching this product and explain that I'm doing this through performance marketing, that we've got some downloads, but people are not getting into debt. They're not using their credit lines. And he tells me, okay, you got it all wrong.

Mack Meyer (21:23)
Mm-hmm. Mm-hmm. Mm-hmm.

All right.

Pedro Vallenilla (21:33)
You have to be in that moment of purchase. Okay. This is supposed to be used at stores and you need to influence when the customer has the need. it's, for me was a, yeah, on the checkout. Now, now I explained this and see how obvious. Okay. ⁓ of course. Yeah. I don't know. I, at the end, Ramon came from Rappi Okay. ⁓ one of my co-founders, I came from TuDescuenton So there's, we hadn't.

Mack Meyer (21:44)
The checkout. Yeah.

It seems obvious by the time it's not that clear, right? Yeah.

Mm-hmm.

Pedro Vallenilla (22:02)
done real offline marketing and hey, this is the way we know how to do it. And so he tells me, you're going to do that. Your strategy, your actual strategy 10 % and we're going to change your strategy at 90%. We're going to do it this way. Are you willing to make the change? And I'm of course, I'm well, yeah. And we did $10,000 that month as we started changing the strategy, started working. Then we did.

Mack Meyer (22:06)
Right.

Mm-hmm.

Mm-hmm.

Okay. We should, yeah.

Mm-hmm. Mm-hmm.

Pedro Vallenilla (22:31)
35,000 or 25,000. The month after that, we did 400,000. A year later from then, we did 40 million. it's like sometimes having the right people on board, having advice, having this conversation, being vulnerable on the roll and saying, hey, I've completely messed up. We don't know what we're doing. I don't know why it's not working.

Mack Meyer (22:46)
Yeah.

Yeah.

Yeah, I don't know. Yeah.

Mm-hmm.

Pedro Vallenilla (23:01)
But sometimes having conversations, this will help you out. it's like, that's one of the many moments in life where an advisor has made a difference. And he owns zero equity in cashier, zero options. So, nah, I owe him for life, but it's, yeah, it's the worst. We've got advisors with an advisory shares and he's not an advisor and he's like, yeah.

Mack Meyer (23:04)
Yeah.

Yeah. ⁓

Worst is advisory shares. I'm kidding.

Just kidding.

But yeah, but that shows you also it shows you also though that one little kind of advice you took it you had the humility to say, okay, we're going to go to the merchants at checkout and say, hey, do you want to have this option? But it's all placement, right? And that's so intriguing, because it seems obvious by the time you're not thinking that way, right?

Pedro Vallenilla (23:30)
Hahaha!

100%. And now what we have been building is that we do believe that the biggest shift for us to move from offline to online is to understand how people buy. If you understand how people buy and in that time over 90, 93 % of purchases are being done offline. If you build trust there, then and you build trust through credit. Okay. And that's the way we have been doing it.

Mack Meyer (24:12)
Mm-hmm.

Mm-hmm. Yeah.

Pedro Vallenilla (24:18)
And then you show them a better way how to buy. Okay. That's the biggest shift from offline to online that you could ever do in LATAM. Because at the end of what really happens is people are asking to buy online and to build that trust. Okay. But if you're willing to understand and be humble enough to understand how they buy, let's build trust and then let's show them a better way how to buy. That's the biggest shift from offline to online that could have...

Mack Meyer (24:21)
Mm-hmm.

Gotcha.

Mm-hmm.

Pedro Vallenilla (24:47)
can be done in Latam. And that's the way we're addressing that. And that's the way we have been able to get over 7.3 million users.

Mack Meyer (24:50)
Yeah.

Gotcha. And do you find that acquiring merchants has been more straightforward or was there a little bit of a hurdle there as well?

Pedro Vallenilla (25:04)
So we were very Cashea poor. this company, when I decided to launch this company, this is a Venezuelan company. This is Venezuelan market. And we launched this company in 2022. in January 2022, it's still 2021. It's still, people are doing amazing investments. If the founder makes sense, if the team makes sense, potentially you will be able to raise money.

Mack Meyer (25:24)
Right, right.

Mm-hmm.

Pedro Vallenilla (25:32)
come

March, 2022, okay? And you got this, I don't know, this apocalypse, this what happened in venture is now you're a Venezuelan trying to launch a FinTech and there's no investments whatsoever anywhere in the world, but much less for Venezuela. So when we did finally ended launching, we had so little money and, but what I...

Mack Meyer (25:40)
Yeah.

There's a slow down, right? Yeah. Yeah.

Yeah.

Pedro Vallenilla (26:02)
What did work and a decision we made very early on and that was a right decision was we were going to we're not gonna be launching Venezuela, we're not gonna be launching Caracas, we're not even gonna be launching a specific ⁓ zone, we were launching in one shopping mall. And we were going to win one shopping mall at a time. And that was our network.

Mack Meyer (26:13)
Mm-hmm.

Pedro Vallenilla (26:27)
There was their first Atomic Network, Atomic, and there was like, we want to build this amazing experience in this main shopping mall in the country. And if we're able to do this here, that's the way, we will figure it out. And people didn't jump into it at first, but after that amazing December, we've been growing, have over 5,000 merchants as of today, 25 cities and over 15,000 strong wait lists.

Mack Meyer (26:40)
We'll figure it out. Yeah. Yeah.

Mm-hmm.

Yeah.

Pedro Vallenilla (26:57)
ready to be aborted. but initially a lot of no's, a lot of skeptics, a lot of, hey, this will never work out. Yeah.

Mack Meyer (26:58)
Wow.

Course.

Yeah. So one thing on the consumer kind of repayment side, because I've read some articles, the default rates are sub 2%. And then we can kind of get to one question about product roadmap. how have you guys maintained this credit worthiness underwriting? to maintain default rates below 2%, anywhere is impressive, but let alone in a country where there's limited credit and in Venezuela, pretty remarkable in some ways.

What do you think spend the one or two key points?

Pedro Vallenilla (27:37)
It's at the end, we do believe that non-performing correlates perfectly on the quality of the product. If we would build an amazing product, this would be the last thing Venezuelans will ever not pay. It's like how to build this amazing network of amazing merchants. And the first thing is, okay, let's build this amazing network. Okay. Let's make it.

Mack Meyer (27:54)
Yeah, yeah.

Pedro Vallenilla (28:06)
almost impossible for a user to really believe that, if there's this amazing network at my disposal, am I gonna lose this opportunity? Access.

Mack Meyer (28:16)
access. Yeah. Yeah. Like if I,

yeah, if I can't be on here on my life, my quality of life is severely less. Yeah.

Pedro Vallenilla (28:23)
And in the other side,

and trust is a word that is easily thrown out, okay, but now that we're doing 2.5 % of GDP, can potentially use that word is if we could bring trust back to Venezuelans and say, we do believe in you. We do believe that there's credit can be rebuilt in this country with little or no data at first. And we've been able to...

Mack Meyer (28:29)
Yeah.

Yeah.

Mm-hmm.

Mm-hmm. Yeah.

Pedro Vallenilla (28:52)
continue to develop this underwriting. At first it was over 7 % of non-performance and has gone down all the way to 2%. But people at first told us, hey, there's no way Venezuelans are going to pay. There's no Venezuelan, no way they're going to understand how to use credit. And what I've learned after working in collections is that Venezuelans are the best payers in the world. So we're the most responsible. And at the end, they've nourished this opportunity and they take care of it because they understand it.

Mack Meyer (29:05)
Yeah.

Mm-hmm.

Wow.

Yeah.

Pedro Vallenilla (29:22)
we as Venezuelans understand credit as an asset and we nourish it so much because we understand what happens when we lose it. And this country lived without consumer credit for seven, eight years. And once it's come back and it has come back through Cashea they nourish it, they take care of it, they are proud of it. And there was an investor that told us, and this is not

Mack Meyer (29:25)
Yeah.

Yeah.

Pedro Vallenilla (29:50)
our words, it's his, it's, guys, as I continue to learn more about you guys and due diligence, you have built this national treasure brand. And Cashea is potentially right now one of the most beloved brands, not the most beloved in financial institution brand, but one of the most beloved brands ⁓ in Venezuela. yeah, we're very proud of that.

Mack Meyer (30:00)
Wow.

Mm-hmm.

in the country.

Yeah, and you've made an impact on millions of people's lives, which is remarkable. ⁓ It can be overwhelming in some ways, right? But at the same time, I'm sure consumers have given feedback about other products they want. I'm sure you guys have whiteboarded many things. What do you think's potentially in the future for Cashea for other financial services when it comes to credit for consumers? Have you thought about that?

Pedro Vallenilla (30:36)
Yeah. And we have built, at first we did 42 day installments. So this was the perfect product for maybe a cell phone, maybe a pair of glasses, or maybe I needed to buy a tire for my motorcycle. But then we understood that we wanted to become that way helping us when it's buy and pay for things. And this vision of becoming

Mack Meyer (30:43)
Mm-hmm.

Pedro Vallenilla (31:04)
this finance and commerce super app for Venezuelans. Okay. It's not only just revolutionizing finance, but revolutionizing commerce as well. And now Cashea is heavily used on a day-to-day basis. So at first we understood active users as somebody who potentially use ⁓ Cashea every 90 days. Now we understand Cashea as a way for you to use

Mack Meyer (31:14)
Yeah.

Mm-hmm.

Pedro Vallenilla (31:33)
on your everyday life. And we have become ⁓ the payment, the way Venezuelans make payments. And this has become our bread and butter. And we will continue developing products as regulation comes along for us to do it successfully. But we will continue deepening financial products for Venezuelans and try to revolutionize car commerce as well and do investments and

Mack Meyer (31:40)
Yeah.

Mm-hmm.

Of

Mm-hmm.

Pedro Vallenilla (32:01)
potential ⁓ &A's for us to continue to work towards that.

Mack Meyer (32:04)
Of course. Awesome.

Last two questions here, Pedro, is first, I think it's somewhat a challenge to ask and you might not have an answer right away, but if you look back, you're so experienced now from many endeavors. Would you have done anything differently at first with Cashea? Obviously the go-to-market with the merchants, but is there any big thing? Are you like, wish I did this differently at first?

Pedro Vallenilla (32:29)
Whoa.

It's not easy to answer that. ⁓ But at the end...

Mack Meyer (32:37)
No. Could be from our

leadership side, could be from anything.

Pedro Vallenilla (32:43)
Yeah, potentially at first.

Yeah, being... And sorry, I don't know. I believe you can edit this part as well, right? That's it. Yeah, Mack at the end, it's... For today, it's difficult to really understand if I would have done anything differently. And at the end, I'm like... In my previous ventures...

Mack Meyer (32:54)
Yeah, yeah, no. No, for sure. I can edit it. Yeah, yeah. If you're like, Mac, take out this portion. I'll find.

Yeah.

Pedro Vallenilla (33:18)
maybe in hindsight, but as today, I've got no way to answer that question. Sorry. It's like, we've failed a lot. We've made so many bad decisions, I wouldn't, yeah. And we've struggled and we failed in so many, but there's no easy answer for that question. And I'll think about it, but potentially.

Mack Meyer (33:25)
Yeah, no, no, don't worry. No. Yeah.

You've been convicted on all of them. Yeah.

Mm-hmm.

No, totally understand.

Pedro Vallenilla (33:45)
We're gonna be too late when I have a way to answer that question.

Mack Meyer (33:47)
Yeah.

Well,

and also I would, you know, you could say Mac, I've, this is not my first ⁓ startup or endeavor or venture. So I've, I've learned a lot. Hopefully I'm not making so many mistakes. ⁓ yeah, no, no, no, no, we can, we can just make it like, Hey, I wouldn't have done anything differently, but last question. And then we're, we're, good on my end. ⁓ you have a lot to be proud of, but what are you most proud of so far in Cashea's journey?

Pedro Vallenilla (34:03)
Potentially. I don't know if you want to answer that question again or what should we do with this part? Yeah.

Impact. The way how credit can potentially and has changed lives. The stories of our users and what they've been able to do through this. ⁓ At the end, just rebuilding trust in a country where trust was lost and doing that through credit. It's a...

Mack Meyer (34:47)
Yeah.

Pedro Vallenilla (34:50)
It's just, ⁓ yeah, we're humbled every day that we have the opportunity to do this and we're, at the end it's a huge responsibility. So at the end, yes, we're very proud, but at the end we do believe that this as a responsibility ⁓ where we need to work a lot to continue to execute on that mission and to try to maintain that trust that we have been built because trust is...

Mack Meyer (34:55)
Yeah.

Yeah.

Pedro Vallenilla (35:18)
It takes years for you to build trust. ⁓ It's very easy to lose it. And at the end for us is we head down, we need to continue working. We haven't won yet. There's 99 % of the vision that continues to need to be executed and there's so much work ahead of us. So at the end, do not get too...

Mack Meyer (35:20)
Yeah.

Yeah.

Yeah. No.

Pedro Vallenilla (35:45)
I don't know, too shell-naked or too starstruck about, yeah, yeah, too starstruck about what has happened and understand that, yeah, you could be nominated as a ⁓ startup of the year or the most impactful company in the country. at the end, this is something that we, that's amazing. That's great. But back to work and that's the only way that we see moving forward.

Mack Meyer (35:46)
Yeah, just get ahead. Yeah.

Yeah, back to work.

Pedro Vallenilla (36:14)
that this could potentially work,

Mack Meyer (36:14)
Yeah.

No, it's so impressive Pedro and in some ways you're so far into the journey, but also in other ways you're just starting, which is a crazy. There's so many opportunities here. ⁓ Thanks for making the time and appreciate everything. And when you're in Mexico City again, let me know. Awesome. Awesome. Bye.

Pedro Vallenilla (36:31)
Let's do that. Un abrazo.

Bye bye.