Jamie Funfinergi, Co-founder & GP of Nazca VC

Welcome aboard Venture Passport, a podcast delivering an inside view of early stage global markets. Me, Jack Richardson, along with my co host Richard Armstrong, explore insights from the world's most innovative entrepreneurs and investors. This episode is brought to you by TAV. TAV is a global early stage VC with over 240 investments, 56 successful exits, six IPOs, 15 unicorns, including globally recognized names like SumUp, DeepL, and many others.

They write checks ranging from a hundred k to 1 mil and are sector agnostic. With a dedicated global team, TAV is focusing efforts on The US and Europe while also targeting emerging markets such as Indonesia, Thailand, Brazil. If you're an ambitious founder of a great idea, don't hesitate to reach out. Jamie Funfinergi, founder and managing partner of Nazca, one of LATAM's top early stage PC firms.

Nazca has backed some of the region's fastest growing companies including James, Fonoderra, Nowports, and Nuvercargo. Since launching in 2018, it has helped define the modern LatAm venture landscape with a portfolio that has collectively raised over 1,000,000,000 and built category defining businesses across fintech, logistics, and SaaS. With a deep operator mindset, Jamie and Manasco team have played a crucial role in scaling these companies from early traction to industry dominance.

So, Jamie, thanks so much for coming on today. We really appreciate it. We heard many good things. Obviously, your background is pretty exceptional, especially in the Latin tech ecosystem.

So maybe before we start, you could tell us a bit about your background and we can sort of go from there. Thank you so much, Richard and Jack, for making this open. I'm Mexican born and raised. I'm 52 years old, couple of cycles as an entrepreneur.

And since 10 ten years ago, I've been doing, venture capital coming in at seed and series a with an amazing partner. His name is Hector Sepulveda. He invited me over, and we've had a few cycles. Ship funds, it was a nimble industry when we began, and now it's evolved a little bit.

And more about myself, I started my first business when I was 17 because my family pushed me to it. Ever since, I've never stopped working and trying to build things, and we live in in in a dynamic economy, and many problems still still to be solved. So keeps me up at night and makes me go to the office every morning. It's it's trying to give a little bit of myself to improve my region economy.

That's what we try to do. Combining talent, capital, and business models in the future. And I'm not sure if that's what we are. So I guess from an early age, right, you wanted to focus on entrepreneurs and eventually venture into tech.

Right? Because as you say, you started your first business in '17. Or did is it because of, your families? I mean, did you have siblings as well that wanted to venture into this space?

No. It was mostly my own desire. Sometimes you plan your career path, but but sometimes it just pops up as it comes. At this cycle in investment banking, as an analyst based in New York, I loved it.

M and a, it was back when the tequila crisis hit in Mexico, so all the financial sector, it was a big turmoil. NPLs will sell, were selling at $20.30 cents on the dollar, good quality assets. And I just decided after the MBA to start doing something on my own and learned from one of the companies that I thought was pretty cool company in the media and entertainment business in in Latin America, and they started it from scratch.

They did their first concerts without having a venue, without having capital, and they presold naming rights of a crappy venue, and then they built an amazing company. Life has taken me in different paths, but I knew always that I wanted to do things on my own or with a good team. And I try to plan. Absolutely.

And hindsight's the amazing thing, like as it being seen, but you can see demographics or sectors at the very start of a trend. Now it's been very earlier than the LatAm and simply kind of next in ecosystem. And obviously it's very played to see the advantages of that now of like Udemy and Kevin and old success stories coming out. So, but but how did you first start out?

What was the thesis of Nowska? What, where did you see the options and how did that come to you? Sure. It was a nimble ecosystem.

It was, not more not over 20,000,000 in on venture capital investments yearly. Hector started it. He's an Endeavor entrepreneur. Endeavor, it's an organization that helps in emerging economies, entrepreneurs.

So after he had a successful exit with Endeavor, he visited Silicon Valley and a few other VC funds living there. And he said, this is what I wanna do. He literally Googled what a GP is, what an LP is. That's when we met.

I was first an angel investor. He said that I was his first LP. I loved it. And I also wrote personal checks in a few companies, to be honest.

I wouldn't be sitting here in this position because this is a long cycle. It takes time to build a platform, to build a team, to build wealth on your own because at the end of the day, you also wanna take some of that benefit home. So it was, again, nimble. So Kovacs series seed was priced at 3,500,000.

0 pre money. Invest those valuations. So we deployed more capital from direct investments from N and piece than from the fund itself. We're literally raising and deploying as opportunities rose.

The sector evolved from 2015 to '18. It was still very small, very shallow. Nobody wanted to lead except Cassek that came in and did a fantastic work in Quebec as well. But but nobody else wanted to price $20,000,000 series a's or or even post series a's.

So if anybody wanted to raise, $10,000,000 loss, so they had to go to Silicon Valley. CLIP was the first one, at least in Mexico to go there. And that was 1718 when when they did it, and it was a huge accomplishment. In 2019, SoftBank announced the the vision fund for Latin America.

Marcello did an amazing job there with his team, and and that's where the revolution began here. It was quick. The valuation just came very, very rapidly in '21, and and the cycles were as as everywhere in the world. No?

But it it hit us. It it was too long in the making and too fast in the scaling. At least that's how we live Interesting. Stage.

Yeah. We were just talking about Quebec. You're most noticed for your early investment in Quebec, which is one of the darlings of the Latin technical system. Tell us about how that opportunity came about.

That must have been a very nonconsensus investment back then. So that deal came through another portfolio company. The entrepreneur in in made introduction. The the former one, it it it's called c brands.

They do a mattress in a box. They're doing an amazing job also. Our other top performing company in in that pond. And literally that the first one came through LinkedIn.

It was a request for LinkedIn. They did have the metrics, the the the mattress, so we could sort of sit down and and and touch it and kick the tires, etcetera. And then he he made the introduction. He said, you should meet Carlos Mercio Tati, his sister, and and his cofounder because they they're building something great.

And, for some reason I mean, everybody has its own story, but mine is that I thought that the that the aftermarket or second fan market of ours was really messed up and and still is. Brazil had had its cycle doing the e commerce. They they had much formal industry, but we were still a mess. It was a lot buyers and sellers, very insecure.

And when we met them, they had bought with their own funds two cars. You know? One was a Volkswagen Jetta, and the other was a Nissan. I said, we've taken these cars in over 25 shops and dealers to get the the the mechanical test and the background check for the property security.

And they said, nobody has told us the same story, so it's messed up, and we wanna do it. And for some reason, I thought that something like CarMax in The US made sense. We don't have a a national registry of of cars. So you do have your invoice and you have, the rights to your car, but there's no registration on a nation.

That's how the the the the venture started. Pre seed was literally to buy the first lots of cars to set up a shop 25 miles from Mexico City. Series a was to start scaling and and and deploy some shops in in Mexico City, but we were 25 miles out out of the city, and it was hard to get interested buyers to look at the cars. And and I guess in terms of, you know, they probably approach a lot of investors.

Right? And then probably received a lot of no's. And then you guys believed in that. Many no's.

And literally on the series a, when there was some traction and then there were some sites of there was another institutional investor that put a term sheet. It was comp a competitive term sheet, and it was a 10% price difference between one and the other, and they didn't want to match. You know? So so that deal was priced I mean, I could be a little bit wrong, but it was around $25,000,000 pre money.

And those $2,500,000 difference made it may got got got the winner. So Yeah. I mean, that's really exceptional. But in terms of Nasdaq, you really back founders.

Right? I mean, if you look at your profile, your website, you're a founders come first. Do you really prioritize that over business models? Some investors will say they really care about founders.

Right? But then as I say, they're like, oh yeah, the business models are all. But with you guys in a way, it's like, you know, you don't really choose focus too much in their business model. Right?

You're right, Richard. Thing is, we believe that the talent, it's it's it's the key. No? And as many other VCs.

Here in Mexico, in Spanish speaking Latin America, we have a time gap where we can see a few business models that work some other places. No. And it's not necessarily an emerging and sorry, developed economies. It's it's more an emerging economies.

No. So so we do have like a roadmap of where certain industries might take, whether it's fintech on the lending space, whether it's credit scoring, whether it's e commerce, etcetera, etcetera. So that allowed allows us to to focus more on the on on the founders. But literally, it's more the empathy that we feel both Hector, partner, and myself, former founders, Laura from the team, she's a principal, she's a former founder, Adolfo who just left to start his own company.

So we've been there in in the startup world, not necessarily in the digital space because digital is different business models, but we understand what it takes. And and we believe that we have some sort of local network that we can help help these entrepreneurs and bring in international money and funds to help us build. Yeah, that's interesting. And it's always kind of well and good speaking about your winners on the poster boys and girls that have pulled earlier, but it's really interesting to to share an emerging market, essentially what his or her, like, biggest messes were perhaps.

Yeah. But like, so like rappy and, and a bitched down the early stages. So, Storm, what were your initial thoughts? And I guess, do you still regret it this day is kind of a a stupid question, but it'll be good to hear your thoughts.

So For sure. There's the mess ups and there's the anti portfolio. So whenever there's a company that makes sense big and we saw the company and we had the opportunity to sort analyze investment, that's our own fault. So why did we pass and what did we learn?

It's something that we think deeply, and it's actually in our pitch deck. Rapp is there. Gallo is there. Corner shop is there.

Few other companies. And and and specifically to your point in Rappi, we saw a pre YC and post YC. And the thing is that we thought the founders were amazing. It was just that the industry and the unit economics.

So our our estimates are current business business thesis. It is that, unit economics need to make sense, and that's been there since 02/2014, '2 thousand '15. We didn't see that they would make them work. In the beginning, we thought that this might be a winner take all market.

It was early also for us to start learning the g digital world. So, yeah, for sure, we miss those. And blame it on us. We have all the respect for for what they built and all these amazing companies.

And it's on not only that, it's not gone. It's it's few beautiful companies that that have been out there. Many of them were not born and raised in Mexico because Mexico took longer to develop. Colombia was ahead of us.

Argentina has been leaving since Mercado lived and before that, since the.com. And also, other regions. No?

So so it it was not easy really to build a international platform to invest abroad. We did invest a little bit on the first one, twenty two thousand fourteen, but it was not really until until late team nineteen that we thought that the Latin America region and couldn't will build a pro platform. No. It's it's not an excuse, and it's on us, but we just thought that it was not easy to deploy capital back.

Yeah. And what was the last time the ecosystem, like, missing pre 02/2018? Was that, like, an adoptions technology? Was that the infrastructure?

Was that the farming environment? What was the missing piece of the puzzle post 02/2018? So I think every country might have its own caveats. For Mexico, it was more the talent and the business models.

We struggle a little bit to get deep flow. And actually, we had our own portfolio builder because some of the companies didn't come, and we thought this is a nice business model that we could build. And there were a couple successful stories around that. So that was on us.

Still very few venture capital investments. And the fintech side, it was too early. I came into investment banking when the Tequila crisis hit in 1997, and the banks pained out. So all the local banks were sold to international players for pennies.

So we were a bit skeptic on, the credit underwriting. So there's been good stories built there, but back then, they didn't necessarily have the data analysis or credit scoring. It was a little bit scary on on on the fintech side, which has taken probably 50% of all the capital deployed in the region. That was some of the challenges for Mexico.

Our regulation was not there. Brazil was ahead of us. Brazil had good stories there already. The first unicorn in Brazil came in was '99.

No. Right? Hailing platform. And it was 1819.

So it took time to build. Yeah. And then I can imagine scaling Nubank, for example, within that particular region was very, very tough because of the adoption of, I think, most controls from a consumer point of view is obviously money is much more. It's important to anyone, but it's a matter of life and death and emerging countries.

Yeah. It happened either you knew someone or it was really hard to start a company really hard. Argentina had its Mercado Libre. Lino came into Mexico later on.

Great founders, but it was difficult business model to to deploy. Colombia, still today, they still need a few local funds that are professional and pretty good. But it was more institution or multifamily type of of business. Sometimes the cap tables didn't work for the VC industry, so at least a cycle between '14 and '19 was sort of financed that way.

So I guess every every country had its own caveats, and that's why SawPants coming into the region and other funds later on was really thankful. Yeah. I mean, maybe we can add to that as well. Right?

But you talked about, like, doing the Kawakat, also, the series a. Right? I guess it was by the time you came back and you saw the RAPI traction or the BITSO traction or the corner shop traction, Was it just too competitive in the series A? Not in the series A.

So there was some traction, but each one might have its challenges back then. In 1919, BITSO was still small, and the regulation was not there. It was not clear that this was gonna become a mainstream financing asset management mechanism, at least as a regional play. They adopted much earlier in Brazil and Argentina than in Mexico.

Still today, they have more assets there or more assets on their management. Foreigner shop, I think they did have the direction, not necessarily that it was clear that they were gonna build something as large as as as it was. So the pain point of going to a supermarket, we didn't understand that it was more, not niche, but but not necessarily a huge market size. So one one of our thesis, it's also the addressable market needs to be a billion dollar.

That's some of the challenges we struggle with in our discussions. It was not on until 2020 late twenty twenty, '20 '20 '1 that it was more competitive. The landscape was more competitive. And, because it came into growth, it was more into series b's.

The first deployment in 1920 was more into series b's and we're earlier players than that. We took the lift from part of the portfolio companies where we were already invested and took the wave with later stage funds. Some of them we exited. We had secondaries to that.

We're always looking it's it's liquidity that the name of the games here also part of Was it hard to generate secondary liquidity, especially over the last few I guess in 2021, it was easier, but even especially recently. Twenty twenty one was easier. There were some incumbents buying companies. So we did sell to another financial institutions.

So, Graham, in '19 2018, '19, '20. In '21, the secondaries were easier through large series b's, which we had never seen before. Now, or probably we could take that how we see the the the environment jump up here. Yeah.

I mean, maybe we can move to talk about some of your wins right now, in terms of you've had 10 successful exits, you know, two IPOs, probably one of the best track records in, you know, in in Mexico. Right? I mean, how you stay ambitious and hungry every day to find the next great company in either Mexico or Latin America? So, again, everybody has their own story.

For me, it's seeing waking up early in the morning, seeing the sunrise between the volcanoes here. You think you're an early bird. There's many birds out there fighting for their daily survival. You know?

And and and it's it's I don't know what what's the right word, and it'll come to me, but it's rewarding to think that the capital that you're deploying, it's also you're generating results, you're generating DPI, but it's also good for your for your country as a whole. And also that's that's part of my drivers. It keeps me going to the office, trying to solve problems. No?

So there's still problems out there. And whenever you visit Mexico City and we walk the streets and we go into the subway and pop up to subway stations afterwards, we might encounter many things and we will have intelligent discussions. And I love it too in London. London is perfect for me for for my daily life.

So so having so many things to do with relevantly not much capital, it's quite exciting. We'll still be playing here. Makes sense. Makes sense.

And, you know, you've grown NASCA from, you know, a very small firm, as you say, now to managing $300,000,000 in AUM with a relatively lean team. How do you do that? Right? Because, I mean, a lot of, you know, VCs we speak to have much larger teams, and I think you guys, like, wait, the, you know, not that many employees either than yourself and, you know, your partner.

Hey. We're we're a team of 14 persons based in Mexico City based in Mexico City. We do visit Colombia Three times a year. We do visit, Argentina Two times a year.

Raising the second fund, vintage 2018, was very challenging. As you said, the first fund was depends on the f FX, but it was $1,560,000,000 dollars. The second fund was $60,000,000.06 0.

We thought it we might cross a hundred million barrier, which didn't happen. It took us almost three years to raise $60,000,000. We were able to sort of break the barrier for institutional investors. We were able to bring in the largest pension fund as an LP, few corporates that are very relevant in Mexico, few DFIs.

They're very we're very grateful for that. Fund of funds from Brazil. We kind of pitched the story, and they saw some remembrance or or similarities to what they saw in Brazil back then. Better prices here at that time.

So it was really challenging to I mean, we we were we were joking last yesterday, Hector and myself and, we pitched over a thousand NPs, including families, high net worth, institutions, etcetera, etcetera. And, still next year, we'll be out in the market, and it's gonna be challenging. It's gonna it's it's still to date. It's it's a challenging environment even though we believe we have great LPs that, should follow through next Corte Conio or funds.

And, but but it's challenging. If you have DPI, no matter what story you tell, you can raise. And if you don't, it's it's really hard. So Yeah.

Yeah. And and and I guess, like, it's super difficult because ultimately, those pension funds dissimilar to that, like in Europe, are quite immature with their venture and like their, their kind of overall section of the asset class. What, what, what's kind of like your, your pitch to LPs, of a value, the kind of localized network, the track records? I guess, what what what what should kind of sell to them?

Sure. That's a great question. So, so pension funds are starting to look into the asset class. Our challenge is that we're too small.

If we raise a $200,000,000 fund and they did anchor it with 50 or 60, still doesn't move the needle for them. So Yeah. An alternative asset class, it makes much more sense for them. They're doing infrastructure, energy, real estate, had a great cycle.

So it's not easy. First, it's the size for us. That that's that's challenging, and that happens also for other institutional or kind of, endowments in in The US or internationally. So we're still reliant on DFIs, big part of it.

So it's not only from The US. It's from Europe, Germany, France. So that's that's that's relevant for us to have an asset in core. What's our pitch?

It's it's it's mostly returns. It's the impact that we generate. So, we have, the the the benefit of having the IFCS and NLP since since fund number two, and we've adopted the, the, their principles for for impact investing and for, for for that. That that that that that is something that we learn and that it's a trend whether with with institutional investors and that we believe in.

So that's that's something that they are also interested And, and that we can transform economies that we can literally whether it's through payment systems, and we can make, industries more more efficient. That's that's also part of our pitch, and, it's it's it's part of that now. Yeah. Yeah, absolutely.

And and just kind of back to the investors as well, like you mentioned that you do do some investments just across the borders in neighboring countries. I guess what what are the main lessons that you've learned of not what to do when investing outside of Mexico? Is there any like, yeah, anything more that you can share for perhaps like hiccups or mistakes or big successes that you've landed on that, you know, instinctively have told you something when you first started looking at your business?

Sure. So we do see ourselves as as Spanish speaking Latin American investors now since 2018. So there's the the the business are expanding organically and then through m and a through the region. What not to do, not think that the same idiosyncrasy is across and that you're solving the same problem.

So literally, it's walking the street, at least in the early stage. That that makes a difference. I was telling, walk the subway. Walk to a subway.

So if you're trying to sell, I don't know, telephone time. No. So cell phone time through a good app that might work fantastically well in in Colombia. And probably the tech and the and the founders who fall in the love with them because they're send they may be sending $2,000,000 a month a month in revenue with pretty good margins.

But it takes just to walk on the street and and and ask the the the corner shop, of the informal or formal and say, hey. Can I put airtime into my cell phone? Yes. For sure.

How do you wanna pay cash or with debit card? And you'll be impressed that the newsstand can do that for you or that the Yeah. Informal, so so it's it's it's understanding the problem, not from the desk and not from the pitch from a Zoom meeting. It's really and that could happen, here in Mexico.

If we go to Colombia or we go to Ecuador or to Lima, we try to do the same, you know, and to try to understand the the, their the the the founder's approach might work in the region because a a big part of what we do, it's, Mexico has to become a relevant market at some point for our portfolio companies. No? So it's not within the the investment thesis as a zero or a one, but we like that tool. Okay.

No? Because that's where we can bring in vantage at so we have to sort of model and think with the founders if that's something that how how to deploy that as as as a local as a local business model and to adapt it. Yes. No.

I understand. It makes a lot of sense. It's almost like primary market research on steroids. And like, like, like that, but that's like scale.

Like that's kind of what we were referred to before, like the huge tailwinds to Mexico. So I think it's super really as a, an emerging market for VCU athletes. And, you know, that's just kind of one of the fastest growing economies in the world at the moment. I guess what what's something positive or actually on consensus for investors that believe regarding Mexico is a place in best or is a place to start a business?

So, we're late adopters, for sure. So there is, Colombia and much earlier adopter than us, Argentina, Brazil. So but whenever a business model comes in, it comes in really high. So that's happened with Facebook, Netflix, many other digital business models.

Ecommerce, we're the largest growing ecommerce adopter, and still in our we just had our back, Cyber Monday this this past week, and only 18% was was ecommerce. The rest was still bricks and mortar. So there's still a lot of growth there. There's still a lot of penetration to be done.

Still problems to be solved on logistics. We haven't you asked what what one of our largest failures. It's logistics not solved yet for ecommerce and for other business models, but it's not easy. It's not easy.

It's a low margin business. It is a, and we've tried with great founders, not first time founders. They did successful nexus, but but it's it's it's not easy to do that. So so Mexico, it's not a good necessarily a great place to start, but it's a good place to really build a large company.

Maybe scale that? Scale it. Yes. We're at 30,000,000, person population.

Margins are good in many in many industries. So we're not our our transformation is digital transformation. So if you go to Europe, digital banking services were done back in the eighties, nineties. Probably the latest word on the two thousands work.

It it doesn't mean that you cannot and and and we shall have a good payment system through through SPEIP, but but, but there's still many things to do digit digitally in in fintech. No? And and, of course, the largest banks like BBVA, Santander, etcetera, etcetera, have have good platforms, but they don't necessarily have other products on their in their offerings. And and the margins, they're they're pretty good margins.

No? So Yeah. Yeah. With the AI sort of wave right now and the craze and valuations.

Right? I mean, how does NASDAQ really stay strong to these principles? Right? I mean, when you see, you know, your rival fund or competitive fund in Matan or Mexico, offer, like, at a double or triple the price that you're going to go into, how do you guys stay and stick to your principles, which you don't recently?

So we see AI in two ways. First is the companies that already have the data, and they've been out there for a couple of years, and they're using it. They're using it smartly. Right now, if you go again with the example in Kawak, they they can they can close a sale of a car through AI, voice, and so so they're they're getting there.

So, is using a lot of AI on your, grocery tickets to do your menus for you. So we see that you like such and such. So why don't you do this, dish, designed by health, chef, master, blah blah blah. So what they're they're doing right now.

Also in fintech. No. So how do they collections. Collections is a thing here.

It's easy to it's hard to collect. So That's in every emerging markets. Yeah. Very hard to collect.

Yeah. So they can profile you, and they say, Richard, you've been, outstanding for your past two or three payments on your cell phone provider or or your retailer? Would you like to reconsider 10% discount or 20% or we can defer payments? So they they're starting to convert everything digit digitally.

So that makes a much, much efficient business model. So that's that's part of the AI that's coming through those, call it, not native born AI companies. You know? And that's happening.

The second part that we, also analyze actively investing, it's on the native AI companies. You know? So companies that are, being born in Mexico or in Chile or in Colombia that are trying to solve logistics problems. You know, like like the supply chain information, that's a mess.

It could be, again, in a hundred chats literally from a truck driver. They quote, whether it's intercity or intracity, they can quote a 200 kilometer deliver or a thousand kilometer delivery over a hundred chats. And that's where the information lies, both for the sort of the contractor and the and the truck driver. So there's so much information lost there, whether it's cross could be cross border.

So it could be an importer coming in with their merchandise for Black Friday again. So, where's that merchandise standing? Have they cleared customs in the origin? Have they, has the ship been delayed due to the hurricane season or blah, blah, blah, blah, blah, blah.

So that that's becoming much more transparent and, reliable. And there's decisions that could be made in if you have that that visibility. You know? So there's companies doing that with second and third time founders, and we're we're trying to look for that.

Then there's beautiful companies doing AI for, for ecommerce, you know, for for enhancing the data, that that and and really giving the value to the data of SMEs or large corporations that don't necessarily know how to use the that data and and make it actionable. So there's a beautiful company out of, Chile that we just invested. It was our last last investment venture investment in in the vintage 2021. We did this two weeks ago.

And in two days' time, they have a machine talking to clients and converting at rates over 50% at much lower cost. So so that's that's really changing in Spanish. You know? And and converting the text into voice, it's not difficult for for for them, and that's really changing the environment.

And and going into valuations, we're still doing early stage, and it's not too too different that the valuations that we're getting at that stages, for internationally. So, but The US, it's a different market, but all all over across the world where we have to pay that. No? And, if we wanna be competitive.

But still, if those companies perform, they'll we so c's could be series c could be around, non AIs, anything around 7 to $10,000,000. Post? Post. Yes.

K. Post and, $2,000,000 rounds. So and then, series a well, sorry. If it has AI on a sieve, it could go up to 15.

Still, really. Opposed. That depends. So there there's there's there's a premium that you have to pay.

You know? There's a premium that you have to pay. Tell them about the valuations in Europe. Yeah.

I'd like to say, like, that's more like, would you say a 50 to 60, the second conservative view of probably a similar sort of company coming out of, of Europe, which is just crazy. I guess you see a lot of fun, smart and natives coming across to take advantage of the latter stage valuations. And ultimately, kind of, beacons compete with firms that provide a different distribution. Or do you mostly focus on businesses that are just only really gonna add a deal last time business?

We played both sides. And to be honest, whatever we deployed in The US, we've been very, very we haven't had good except one company. The rest, we've we haven't had results. So we don't compete for that.

We we don't cannot add much value there. And Yeah. It has to have a Latin American component for us. Whether it's a company that started in India, it's a beautiful company in our port, a point called Urbanic.

It's our largest ticket in in in in vintage 2021. We came in at their post series b because it was a secondary from a Chinese fund, and the founder wanted to have some VC exposure in Mexico because it was one of their target markets. And, so that's that's a beautiful company, and we pay I think we paid fairly. That founder has managed expectations pretty, pretty smart, and, he hasn't gone up high.

Many times, it's, like, one to 1.5 times revenue, net revenue, which is fair for for an ecommerce. And, so and there's others. It's just just the market.

We try to negotiate, and it's one of the last things that we that we do in the process. And, literally, if we like the founder, if we like the business model, we have to do what it takes to get the deal now. We we rather have the winners because the second tier, there's a big gap between the the winner and the second tier in our region, which might be slightly different than than in other, developed economies. So you have to with be with the winner here.

Okay. Yeah. Maybe I can take this one. So, I mean, you talk about the Latin American ecosystem, right, but has many seed in series a series a funds.

I mean, we we obviously discussed before about the lack of growth capital. You see this starting to change now, or do you think that is still a massive problem in Latin America? No. I mean, I'll go to the data.

So our third quarter figures for Mexico only, it's been a billion dollar deployed in rounds over 50,000,000 year to date or year to third quarter, which is good. So there's a billion dollars for growth companies. Some of it comes from domestic domestic funds. Some of it comes from international funds.

And there is about close to 700,000,000 in seed and series a. Now that rounds below $50,000,000. And we're in the we're in the at the level of 2020 or very close to 2020. It's not the hype of 2021 thank thankfully because it was it was scary.

It was non sustainable to go into those those valuations. There's gonna be challenges ahead. So 2025, it's gonna be challenging because many of us as funds will be out out there in the market. So this liquidity might go through 2025, but for sure, not through 2026 if there's no new capital coming in.

We have 22,000,000,000 in Spanish speaking Latin America, from different vintages that hasn't been returned to institutional investors. So we do need exits. We do need the IPOs, market to start opening. There were pre filings of beautiful companies back in 2021, '20 '2, which didn't make it.

So, hopefully, that comes. So so we we do need to return, part of part of that capital to start, recirculate. So do you think in terms of you know, you talk about the, you know, in terms of, funds needing to show DPI especially the next few years to raise for their next fund, do you think that there'll be a repricing then? Because as I say, you know, some founders sorry.

Some investors will be wanting to just, you know, generate DPI so that they can get their next fund, and then to show some liquidity. Therefore, there'll be some discounts in the market and a repricing and then, I guess, c to d. Right? Yep.

I mean, logic tells that this could be a good time for secondaries. It's not something that we're specialized in, so we we were sellers in secondaries. Could be a good time to to start a secondary fund. And, actually, there's some initiatives from good managers doing that.

We're getting we've gotten some of the latest investments through secondaries and reasonable valuations. So I wouldn't say that they're bargains. Again, if you wanna be with the what you think is the winner, you have to pay. But there's good pretty good valuations there.

So I think every fund has its own or every manager has its own story around that. We've had very, very successful twenty four fifteen vintage. PPI, it's close to three times. We're closing it this year.

Vintage 2018 across the industry and I think across the world was was challenging at least at least for us because these these are the companies that did get very high valuations in the '21, '20 '2 hype or or or, that time. And they've come down whether they've either failed, a few of them, and or the others have been able to to go through our our companies that have had to have some, some down rounds, which is not I mean, it it's reasonable to have, but but then you had sort of the expectation and the TVPI high and it's coming down.

And I think at least for institutional investors, at least if you will stand within the, within your cohorts and with your vintages in the top quartiles, you're there. It's not necessarily the same for non institutional investors and don't have a thesis and that they don't wanna deploy across different vintages. That's that's not the same. So if you're a high net worth individual and you start investing in 2018 and that cycle didn't go through well with you, you will not deploy capital very likely in the in the next cycle.

So so we tell them that we want to have them, like, across different vintages, but every every sort of every investor has its own pieces and and some want to recycle. So, okay, you give me the money back and I'll put money. But but there's no commitment. So that that will happen.

You only know that whenever they have the cash in the bank and, some will put you a percentage back and some won't. They said, okay. Thank you for for doing your job. And this is what we do now.

That that this is our industry. Yeah. I mean, you you talked about actually, you know, as you say, a lot of your companies, especially in your fund, had some really high valuations. Right?

I guess, you know, some of that period you did maybe have some opportunity to sell some second piece. Does that, like, I guess, change the way you look at, you know, selling positions as it, you know, as it, you know, as they say, once it gets substantially large very quick very quickly. Right? Or, you know, or do you have a strategy around that that you've just stuck stuck by?

I don't wanna play the smart guy here by any means. We've we've had a lot of heat ups and and and errors. But, no. Whenever we have an opportunity to do a secondary, we definitely analyze it and take it at least partially.

Whether it's for for LPs, whether it's for us, so we're always looking for that. So, we do we did or we participated in two packs, not as sponsors. That that are they were target companies, and we swapped shares. And one of the companies, we sold % of our shares once our lockup period was was through.

The other one, we did a secondary before sort of a transaction happening, and we were not able to deploy. We were caught up on the on the down market before the the lockup period. Another company, another m and a company, Brazilian leading leading player, acquiring a Mexican target. We were there were a couple of funds in the cap table, and we were the only ones to to take cash and to ask for cash instead of pure equity.

Actually, we wanted to get much more than that, and probably that would have been % paid to cash. We might have taken it. So, no. We're always out there.

The name of the game, it's it's liquidity and, Quebec. And again, to go back where we started, we sold % of our interest to make the deal happen, to make a good series b, having in sub bank, green notes, and general Atlantic coming into the cap table. We still owned about 30% of the company plus, a few other direct investments from our LPs. So so we always take the money.

Could we have made instead of 20 times, 30 times? Yes. We could have had that. Did we ask for it for keep a tail and a piece?

Yes. We did ask for it. But when that didn't happen, we decided to sell. Nobody whenever you we were out there sort of going into institutional investors and, there's windows in Latin America.

So whenever there's a window, you have to take it. The markets are not always open. So so they don't they don't punish you to get four, five times extra money or 10 or more. They do punish you if you had the option and you didn't, sort of exercise it.

So for us, it's a long term game and it's recycling capital. Yeah. Absolutely. I agree.

And just one question before we move into a bit of a quick fire. If you could change one thing about LatAm in general, perhaps, so it's like a ecosystem demographic to make it an easier place to invest or a better place to invest, I guess, like, what what would it be? I think public markets. Markets to have that pink sheets in the in The UK or or or in in the mid market in Spain.

Trying to list a company when you don't have, you don't have right now, you have $34,000,000,000 market cap to go to Nasdaq or probably higher than that. So anything in the middle could be very beneficial. Now so Brazil has that, locally. We've had that in the past in Mexico.

And if the pension funds start to deploy slightly more in alternatives and slightly more in VC, it would make a huge difference. Different. Yep. And then we can calculate time and then we can take.

Yeah. So it's just the debit needs to be super quick. And it's just what would you prefer to do next if you only have the choice of one, the the rest of your own vaccine? Is that or Colombia?

Colombia. We don't understand Brazil. Why? Yeah.

We don't understand Brazil. We understand Colombia. We have lots of respect for Brazil. Brazil has lot of local knowledge, local knowledge.

Okay. What about sector you're most excited about and why? Still fintech. I think there's a lot of opportunity for m and a, buying things cheaply.

Not doesn't have to be necessarily a startup. So you can buy something, put a great team together, and do a lot of an m m and a around that, especially on b to b. B to b sales cycles are long. So if you buy things that already have the relationship with key with key buyers, it will make a difference.

What is something you wish you knew now at the start of your career? At the start of my career? The importance of a team and a partnership in in in a GP. So so so cycles are long.

Getting money for your own person takes takes a. And building the right the right the right structure and the GP makes a huge, huge difference and bringing in new talent. So, again, I I said I'm 52. We need John Rolf here.

Yeah. So, Jamie, this is a great episode. Really, really appreciate. I think me and Jack learned so much about the, you know, the Mexico system as well as Latin America in general.

You know, hopefully, in a few years' time, we can have you back on, and we can discuss more of your winners and less of your anti portfolio. And, yeah, as I can say, this is a great episode and, you know, really looking forward to have you on soon again. Thank you so much for making it happen, and congratulations on everything you've built. Thanks for the support.

We're really a network, and we're an ecosystem. So you're a Of course. Very important part of the ecosystem. Thank you.

We're a we're a small LP as well, but, you know, we'll we'll we'll keep on supporting. There is no small LPs. So everybody has importance. There's no LPs.

It's just trust the other.