Julia Vater Fernández on Leading Two IPOs, Global Expansion & Putting LATAM on the Tech Map

Speaker A: The trust is not bought.

Speaker B: Exactly.

Speaker A: You cannot buy trust. You have to win trust. And that takes time. That takes time. And also you have to break a lot of barriers of preconceptions, which is one of the things that made me more proud when I see us, uh, winning a. Ah, customer.

Speaker B: Julia, you are an inspiration for all bite textures. But more than that, for a lot of Latin American that see in you powerful woman that is leading their way from a small company to ipo. And, uh, you did it not only one, but twice. And, um, I can tell you, because you are my colleague that I enjoy. So smart. You have a lot of things to offer, always in the table. And to you don't know, just working with you is so excited that I want to open this space so more people can know you, understand your background and, um, maybe to start to create a connection between you and your audience. Believe me, a lot of people admire you and see you like referral boys in the market. So can you share a little bit of your background, please?

Speaker A: Thank you so much for the kind words. I hope to be the standard that you put for me, which is very high. So a little bit of my experience. I started working basically in finance. I started in J.P. morgan on the, uh, segment of, like, research and M and A. I found out that that was not for me. So I like it. It was challenging, but I didn't find that was fulfilling for me at the end. And I had the courage to say, this is not my path. Recognize it. Which is something that sometimes is very tough to face.

Speaker B: Everybody training you for that? Nobody trained us for that. Not in a school, not in university, no.

Speaker A: And all my life I've been like an overachiever in my mind of saying, like, I have to make everything work, and then facing with the fact that you're not happy with what you're doing. You don't see, like, yeah, you can generate value, you can do something, but this is not for you. It's not where you're going to shine. And at that point, I didn't know that it was going to be so transformational for me, but I took the decision to take one year off and I went to work at more like a different way. Ah, for Argentina, which is like, teach for Argentina. I went to very poor endeavors to teach math to kids. I thought it was a good thing. While I was thinking about, yeah, my career and what I wanted to do to give back something, because I was really gifted by being born a family that could give me food, that could give me good Education, I didn't have a ceiling there. Right. So in a sense I thought, okay, I'm going to try to give something back. And um, there. Then I realized it was very tough as well. I wasn't prepared for all the difficulties as well of uh, managing that experience. But it was great because it also made me understand that I needed to do something that added value, that gave people work, that could help people to have a better life. And I believe that I ended up on the right position nowadays. But well before getting into VTechs then I went again to private equity, to the dark side of the moon again. Because basically it was what I understood and what I knew. But there's what I started covering the retail space and that's when I discovered retail and fell in love with it. So, so I worked um, on the pricing strategy for a company that we were bringing from Europe to the US So also I had this experience with different countries and different cultures and understanding how the product differentiation had to be and the positioning and all those things and felt like, oh, this I like a little bit more. And there's a lot of preparation behind the scenes. But also you have to be open and take the opportunity when it arises. And Mercado Libre could called me. They had an open position on the investor relations team. I don't know why they called me. I took the phone by chance and I started my career on E Commerce per se. And on the investor relations side, years went by. I found out that this was my true passion. Right. To help on ah, a Latam, um, company that was like proudly growing and was generating a lot of shop positions and was working towards something that seemed like impossible. Fighting the fight, digitalizing not only like the sales part but also like payments and trying to drive logistics at that point. Like the QR code didn't exist at that point. So it was great to be part of that. But at some point also being on the investor relations side, another opportunity arises that was the local that was seeking for also doing an ipo. And for me as an investor relations professional, it was a huge opportunity, right, to be part of that of how do we position our store, how do we create numbers like data? Ah, so I follow that path and at the same time when I joined vtex, the local Vitex called me because they were also searching for almost at

Speaker B: the same time, very similar timeline.

Speaker A: Yes. And I remember it was super funny because Ricardo the CFO called me and it was like, look, I just moved to the local, I'm doing the ipo. It gave my word. Like for me, my word was very important. And he was like, let's keep the conversation going. We kept the conversation for six months.

Speaker B: Wow.

Speaker A: The ipo, the local happened. I went to have dinner with Mariano, I met Gerald, uh, the founders and everything. And it was still like, it's a great company. I was always thinking, I really want to go to Vetex. And then I had the struggle right of I did the ipo, I gave my word and I paid it. Is it okay to change? It's not, you know, but at the end I follow my heart. And I believe that when you follow your heart and you act with honesty and truthfully to yourself and to others, everything works out at the end. And I found a place where I can be myself, which is something that I value a lot, where I feel heard, where I feel understood, and where I can do a difference. And I do believe that taking a company that is from Brazil, Latam, um, however you want to frame it meant and making it truly like international and making this region known for something else than commodities. And also raving on the concept of the great talent that we have, especially on an uh, area that was not typically that well known, that it's like the developers. Typically when you thought about that, you were thinking about like maybe India as a potential place. And nothing against that because it's true, but, but in a front end standpoint, I don't know if it's a place. So having like let them race and Vitex being the sponsor, if you may, if you let me take that artistic approach, but being a sponsor of it, it's amazing. And being part of that, part of history. Ah, for Latam, for Brazil, been outstanding. So, um.

Speaker B: And you did it not once, twice for a good reason. I always see some talent that are uh, driving more than money than for a purpose. And I can hear from you that you have a, uh, drive. That is how we can literally enable Latin America, Brazilian to show that we are more than commodities and literally create this breakthrough for Latin America in the world. Tell us a little bit about how was the difference between the first IPO that you did and the second one? How are the different type of IPOs, the type of co founders? I cannot imagine the stress that companies and people live there. You have inside information of all of that. Can you share something about that?

Speaker A: Sure. So I believe that the most stressful moment for any company is to go through an ipo. You have to be very well prepared. Many dream or think of doing an ipo. What I Always say is like think it very well. Not everyone is prepared for an ipo because you are going to be scrutinized as you've never been before. And then you're going to have commitments that you cannot break. And that's very painful if you are not well prepared. And with well prepared I don't mean only the numbers, but your strategy. Like is your company mature enough to go through it? Are you going to really take this next step? Because being a public company is a different game.

Speaker B: It's not even about revenue. Yeah, it's not even about revenue or how much you are making. Is, are you able to run a public company with a clear uh, vision, a strategy and execution in a disciplined way knows you through emotion.

Speaker A: Exactly. And also for instance, one thing that I noticed, I'm gonna go back to your prior question because I know I derail a little bit. But for instance, the markets lately since 2021, right. Like Bitex went public in July of 2021 and it was mainly the last window opportunity for companies to go live gladly. We did it when we did it,

Speaker B: you know, was uh, not long shot because was planned. But we did it in the right time, the right moment.

Speaker A: We correct people 100% market went crazy for different reasons. And you're going to have so many things that go outside of what you can control. And if you as a company not mature enough to understand those movements and you're going to be watching the Bloomberg thing all day long and obsessing and thinking, oh, now that I value 20% more, I'm a much better company tomorrow that I value 40% less, then we're depressed and you're depressed. That's gonna basically kill your company. That's the point. You cannot take, you know, decisions based on short term movements and volatility on the market. You have to keep seeing your goal. What are you going for? Like what are you trying to bring? What are your values and what is the thing that you're really aiming to do? And if you're on the right track and not also be open to all thoughts that can arise in the market because the market is very opinionated and they're going to have lots of opinions. So you have to be truthful also and have very open conversations on a sea level standpoint with your board. And of course be open and um, permeable on whatever things come from the market. But be very aware that this is your company and this is how you want to do business. Because the market wants things on a uh, short term Sometimes there are some investors long term that will accompany through that. But you have to be very wise to distinguish who is who and what's the best really for a company without being stubborn. It's a very fine line.

Speaker B: It's so easy to fall for that. It's very easy for the founders and the sea level because you have this public earnings call you have every quarter, like public accountability. You always want to show off that you are growing, that you have more margins. But sometimes you need to follow a strategy and sometimes strategy can be painful to operate a company to guarantee the future.

Speaker A: And if you think about it, we have long sales cycles, we are operating on M, the enterprise segment. It's not the same that if you are in the long and long tail and it's just like you know, clicks on Google and then you get new leads. That's not how it works. And for instance, many years ago people were seeing like even at the IPO and we mentioned it, the US and Europe is an optionality. And even though we are not saying now, hey, we passed through the breaking point and now it's all a given. We say yeah, we are working very diligently but now we have more and more customers in the hundred millions of dollars of gmv we already have under implementation a customer in the billion dol dollars in the US we have more in Europe. We mentioned Manchester City publicly so I can mention them in Europe. And those are things that now investors have like ah, uh, okay, so Bitax was doing the right thing but two months ago you thought we didn't. So that's why it's so tricky how you have to manage the company understanding that you are not going to be able to disclose everything all the time. People are not going to price those things. It can be somehow tough for the company and the employees if they follow the time that so nothing. It depends, you know, on your maturity standpoint on that front. And I believe that Vitex is very well prepared. And you don't know Santi, how much I appreciate to work here where C level and the board are so mature that they understand all these movements that are more like macro related interest rates that go up and down and then you have trade policies and these and that and they understand those movements and they keep focus and that gives me the space also to work and bring them results. Because if they were pressuring me because I know now the stock is here and now that doesn't leave you space to like focus as well and work. So I believe that those things come up, down. And that's something that BTEX understands very well. And to your previous question, I had a lot of learning experience at the local ipo. It's very stressful for our companies. That's a uh, reality. I remember not sleeping for many, many months. It was like four hours. Yeah, seriously, like missing birthdays and everything. And it was tough. But at the same time, when you have a, ah, goal and you want to also demonstrate yourself that you can do it, you get through it. Right. Like things do not come with that effort. That's something that we all know, right. Like nobody see the effort and the discipline. They only see results. But things came with a lot of suffering. In a good sense. It depends on you, right, how you take it, if it's like suffering in a bad or good way. But what I learned, for instance on the IPO process is that as I mentioned, sea level focus on the right things is the most important thing. Not trying to inflate things up or deflate things if it doesn't worth it. But also banks and other players that are involved on the IPO process. Like one of the first things that you choose when you start the IPO process is the banks that are going to accompany you throughout that process. And uh, that's challenging because everyone comes and pitches to you your story. And you have to try to pick like, who, understand who, get it, who you believe is going to basically defend you the most. And at the end what happens there is that you start a relationship where they are trying to seduce you and everyone tells you that you're the most beautiful company ever. At the end, you have to learn not to trust that.

Speaker B: Wow.

Speaker A: Because on that process, and this is something that I told the VTech team when I arrived, you are the meal. You have to remember that. So be careful. The customers of the way that they do money on a, uh, big picture is with investors and with the allocation and with those things. Right. So if their incentive at the same time is to bring the best pricing for their customers, which is not you. So I remember at vtex there was a moment on um, the IPO that we were defining the final pricing.

Speaker B: Yes, I remember that moment.

Speaker A: Yeah, it was crazy. It was very challenging. The only thing that I told Mariano and Geraldo before they went to walk and think about it was remember, this is your company, you IPO only once. If you don't defend your pricing and your company, nobody else is going to do it. Think about it. They went to work. And then one thing that I appreciated a lot as well, that I didn't see in other companies is that they gathered the full team and they said I was there. Exactly. But people were not there. So I believe this is very important to understand the culture of BTech and the power.

Speaker B: The power that it has a ah, war room full of emotion and celebration.

Speaker A: Exactly. And then came and said we thought about it. This is our decision. Do you accompany us? So the way BTech's rule by not treating employees as numbers but treating them as co owners in a sense which is smarter thing to do. It is because that's the way that you get people engaged and people fighting for you to the end. So I believe that was a very beautiful lesson and something that I saw that. Okay. Made me say this is my place.

Speaker B: I didn't remember that, but was one of most emotional day of my life. We were there in the. In New York And I think J.P.

Speaker A: morgan in J.P. morgan office.

Speaker B: Yeah. And uh, we were together making that decision. And yes, Geraldo and Mariano invited all of us to make the call together.

Speaker A: People were crying. It was amazing.

Speaker B: Was amazing. Something important I need to do this question people always ask me Santi, why BTECH stock go up or go down? Can you give a short answer on that?

Speaker A: Sure. So as I mentioned, there are multiple factors. They are factors that are related to the performance of the company and factors that are outside of our control that are macro. So let me go first on the first bucket, the ones that are in our control. So stock goes up clearly when you outperform your revenue guidance. Remember that BTEX is on the bucket of high growth companies.

Speaker B: Yes.

Speaker A: BTEX goes up if we also surprise on um, a margin perspective because cash is king, baby. Uh, and the reality is that that's where investors understand this good return. The company is healthy and we have

Speaker B: the capacity is well managed.

Speaker A: Exactly. So those are things that are very important. And then of course if there are relevant names that basically show you that Vetex is continuing on that growth perspective, especially in the US Everyone is focused there, especially in Europe, but also for instance in Brazil. So recently when we mentioned Americanos as a new customer go live, that was very important for Brazil because people were thinking like do you still have room to grow in Brazil? Market M share, 40% plus market share there you've been growing at an um, amazing level, more than 20% for like many, many years. Does it make sense? People were wondering that seven years ago. And we keep delivering. So for them to see there's another face, let's say another bucket of uh, very large Companies that can migrate and are deciding to do so and are doing it because cause of what Vetex offers not only operationally on the E commerce side per se, but also on the profitability side on the efficiency and the ease of operation that change the mindset. And then you have B2B and then you have advertising and all these things that also push further, you know that growth opportunity for the company on the most mature geography. But all those factors are the ones that of course put you in a uh, bullish scenario on the investor side. Then on the opposite side if by any reason you underperform what you were expecting. And for us that's possible because we have two thirds of our revenues that is attached to the GMV of our customers, which means what our customers sell, which is something that we don't control. And in macro scenarios of volatility everything can happen, everything can happen to one side or the other and that can surprise us. And when it surprises to the negative side, as we are a uh, high growth company that generates a moment where it's like for investors, how should I see future growth coming? Is this a new level? Is it going to then accelerate, continue to decelerate and that changes the way that they see it.

Speaker B: That is amazing articulation why we push so hard to conquer the world as uh, a company because we want to have revenue coming from all continents. We have, want to have revenue from Europe, from Africa, Asia, United States. Because as uh, more GMB you have statistically you can do a um, more clear forecast. And of course to not be dependent

Speaker A: on currency you can raise the dependence on specific regions. And for instance in the fourth quarter that we had a huge movement on FX in Brazil. That was a moment where I was telling investors that this is why we need to continue to penetrate the US because that's going to bring us more US dollars on different so yeah of course but the reality there as well is that for us internalization besides then all the proudness that it brings to us to bring VTechs and software as uh, a standard for the international coming from Brazil, coming from Latam, what happens there is a very defensive mode for Latam and as you know also it helps even like to accelerate in Mexico and things like that. But also it helps you to grab more global contracts that it's something that at the end ends up locking up Latam um for other players to come. So it's something that's very important for us as a business case. Even the results that are to come are uh, one way or the other. But I do believe it's a. There is more decision for us to keep operating for many, fully aligned.

Speaker B: It is not obvious, for example to invest in Europe, Asia or United States. It is not obvious when you have so low cost of decision in Latam and Brazil. For us, we already have the awareness, we have the brand. So it's easy for us to sell and operate in United States, sorry, in Latam and Brazil. But if we are able to unlock Europe and uh, United States, the company will create a new market share that will give us a new reality, a new future, a new company. And ah, yes, Xtime Btex, Xtime Btex. And yes, it's a bit. We have a playbook, we have a growth playbook where we define some methodologies, how we scale, how we operate. But yes, this is what we are doing, we are trying it and I think investors are uh, defining where to bet and where not to bet when they see our company. But as you say, this is a new level. When you are able to do this publicly and efficient way, you are not doing just emotional decision or where to bet, where not to bet. No, you need to be open and allow everyone to challenge their ideas and where you put the resources, your capital to scale.

Speaker A: Yes, and that's a very important point that you're bringing Santi. Because at uh, the time of the IPO, 5% of our revenues were coming from rest of the world, which is basically US and Europe. And we were burning a lot of money there, like 30% of our expenses. Oh, you know, at that time it was a real bleeding situation. That was a bold bet that we understood the future that we were building, but people couldn't see it in results. Is that part that I mentioned about. People see the results but they don't see all the suffering. When you're a public company, people see

Speaker B: the suffering, the sacrifice.

Speaker A: And the problem is, as you mentioned, they are going to start pressuring on why are you losing money if you don't know when the results or if the results are going to come. So why I'm going to invest here if you're bleeding out this much on these little results. And um, fast forward to today. We have 11% of our revenues coming from rest of the world with the same mainly level of investment, which I'll say it's not 100% breakeven, but very close. So on a financial standpoint, I'm coming from the financial team. Right. I'm very excited about it because I'm not almost building anything and I'M opening a huge opportunity for the company that's transformational at the end. And now investors, because I tried to put this idea and they see it, of course they are excited. And now they are not asking why are you putting money there? Why are you investing there? They are asking like, what's the big name that you're going to announce? Right.

Speaker B: Why not put more money there?

Speaker A: They asked that as well. Yes, of course. And it's funny, right? You have to do a lot of education here. But even when they came with the other question, right, that you brought, like why don't you allocate more than in Brazil? The return is amazing. But there's always a point where if you invest more, what you're going to bring is detrimental in a sense of the extra amount that you are bringing. So you have to be very intelligent on how you allocate money, how you assess how much it makes sense, measuring demand. And that's something that I believe you, Ricardo, the cfo, uh, and all the team are trying to measure to not over invest, not under invest. And it's a fine art, let's say

Speaker B: it is an art. Thank you for seeing that. Nobody see it. Thank you for recognizing it's an art. And something that bring my attention is it's also not only about money or the product. Sometimes to operate a uh, global company with different cultures, time zone, languages, you need to be prepared. In my point of view, for us to reach the next level of BitTech, we need to guarantee that we are able to operate 24,7 in Europe, United States, Asia. And for that we cannot only invest in Latam or Brazil. We need to create a culture that enable and embrace different yields, different way to operate, different way to buy and uh, manage commerce. Because it's not the same how you manage or create commerce in Brazil that in Dubai or in Germany. It's a different way. This is why we are the backbone of connected commerce and we compose and decompose our solution. But it's not always out of the box. The same ICP where you're going to conquer the world, I don't know iPhone that we sell the same product for all the consumer.

Speaker A: We are uh, technology tropicalization of product

Speaker B: plus our ecosystem that allow us to create these last mile of application to deliver value for each of the regions.

Speaker A: And the ecosystem is very local, so you have to build it.

Speaker B: And more than that is very local technologically standpoint. But also we are in a B2B business so relationship are important and to be able to enter to some clients, region or industry, you need to have trust. And the trust is.

Speaker A: The trust is not bought.

Speaker B: Exactly.

Speaker A: You cannot buy trust. You have to win trust. And that takes time. That takes time. And also you have to break a lot of barriers, of preconceptions, which is one of the things that made me more proud when I see us, uh, winning a customer, because it's putting latam and Brazil into a different level than it was before. But I understand. And what I try to tell to investors all the time is that win by win and making customer success cases with them, um, learning with them, um, is that we are prepared for the next wave, and the next wave till it becomes the rule. But it's not easy. It is not going to take time. It's tiring. But we're doing is, and we are

Speaker B: doing it with Latin American talent, and we are so proud of that. Let's close with that. Thank you so much for being here. I think we have space and a lot of content for, uh, our second episode. I think all the investors and, um, BitTech's employee ecosystem will ask us to have a new episode because we have a lot of topics to talk.

Speaker A: Every time you want. I'm here for you.

Speaker B: Happy to have you.

Speaker A: Thank you, Santi.

Speaker B: Bye. Bye.