Can you create a startup with $100? The Latino Who Came to Open Finance and Has a Turnover of Millions


The company now has a presence in 18 countries and expects to close 2024 with a total turnover of US$20 million

Bloomberg Línea — Open Banking and Open Finance are recurring terms in Latin America’s fintech ecosystem. The first is based on the regulated and secure exchange of banking data between financial institutions and third parties, optimising bank processes and the development of new business models.

The impact is so broad that Open Banking alone is expected to move business for US$43.152 billion by 2026, according to a report by Allied Market Research.

The second, Open Finance, is based on the exchange of bank and non-bank data, that is, depending on the case, it can take government information, retail, credit histories, among others. This has boosted the personalization of financial products, detection of problems in systems, fraud prevention, and other services.

But how do you create a company linked to Open Finance and with high turnover? For some, the idea is enough to create a startup, and for others it requires an initial financial muscle to get the project off the ground.

Bloomberg Línea spoke with Julián Colombo, the Argentinian who is CEO and co-founder of N5 Now, a company founded in 2017 that provides simplification solutions for the financial industry, and after adding different clients in Latin America, closed an investment round in the United States for US$76 million last year, according to media reports. In 2022, the company was recognized by Microsoft as ‘Best Platform 22′, for being the only one designed for Open Finance.

The following interview has been edited for length and clarity.

Bloomberg Line (BL): You point out that you started the company with a minimum capital of US$100. How was this? What did you invest the $100 in to get started, and what did it do for you?

Julián Colombo (JC): The $100 figure is becoming a well-known anecdote, so I’m going to add details. He had traveled from Madrid, where he lived, to New York to formalize the creation of the company. This involved opening a bank account, for which he had to deposit US$200 and thus leave it active.

I realized at that moment that I had almost no cash, so I asked the bank executive to help me by agreeing to open it with only $100. That $100 was the only equity investment in N5 during the company’s first five years.

The day after opening the account, I traveled to Panama to visit a bank called Credicorp Bank and told them about the platform we were going to create. They found it so interesting that they agreed to pay us upfront for it, and that allowed us to hire the team that eventually built it.

BL: What was the investment that followed that capital?

JC: In a short time, many other clients arrived, all with the same generosity and enthusiasm for what we were creating, which made it unnecessary to invest capital in the company.

It was only in 2023 that we made an investment round to attract some of the most important funds in the world, but by then we had already been able to serve more than 60 clients and have a presence in 13 countries with that US$100 of initial investment (of own capital).

BL: You have been emphatic that you experienced the dilemma that it is difficult for a bank to update or innovate without ceasing to operate. How was the process of identifying this problem and turning it into N5?

JC: I worked for more than 25 years in the banking sector. I started in a branch in Argentina and after passing through five countries I ended up as a member of the Commercial Management Committee of the Santander Group in Madrid.

I realized that although a bank with 300 branches in Poland was very different from one with 5,000 in Brazil, or even one with no branches in Portugal, they all suffered from the same problem, which I call “technological entropy,” which is the tendency of their systems to become disorganized simply by existing.

No matter how much they invested in technology, their innovation was still very slow, precisely because every change, every innovation, required to be connected to thousands of systems, ensuring that nothing stopped working. A bank needs simplification. The answer is not to include one more piece of software, but to reduce hundreds.

BL: N5 is a software solution for financial, insurance, or payments companies. Could you give us as non-technical an example as possible of how this solution works?

JC: It’s a very large solution, with more than 30 modules that solve different problems. I’ll give some examples of them: a customer can start a transaction on mobile, have a problem, call the call center and then try to solve it in the branch. In banks that don’t use this technology, it’s likely that they (the customer) will have to explain everything that happened to them in every interaction, or even that they won’t be able to solve their problem in the channel they want.

One of our modules takes care of uniting the entire customer story in chronological order, regardless of the channel, as well as allowing you to execute any operation in all of them. Thus, a branch executive can see exactly where the problem was with the application, but more so, the customer does not need to go anywhere to solve a problem, because the system detects errors and proactively resolves them.

Now imagine that you are withdrawing money from an ATM. Although it may seem to be a unique action, different “robots” look at different perspectives of this event. For example, one checks to see if you have enough balance to release the money. Another looks to see if your phone is miles away, which would suggest it’s a fraud. In the past, banks built huge software “monoliths” to handle all of this. And if something changed, they had to adjust everything.

With our platform, if the institution changes the notification method, for example, we just need to quickly adjust the SMS sending “robot” to send push notifications, and everything else still works.

BL: What role is AI playing in these types of developments and products?

JC: Completely central, and in two ways. First, all of our modules incorporate artificial intelligence. Second, some of our modules are “artificial intelligence factories” that allow the bank or insurer that uses our platform to incorporate generative intelligence into any task they want.

As a respective example: a bank executive can ask our artificial intelligence which customer to call at this moment, and to offer them which product, and it will consider thousands of variables to recommend, even, with which words to articulate the offer.

Open Finance facilitates the creation of more inclusive financial services, such as microcredit, accessible insurance, and low-cost savings accounts, all designed to address the needs of underserved populations.Julián Colombo, CEO and co-founder of N5 Now

BL: In terms of capitalization, how much money has N5 Now raised since its inception?

JC: The first five years we had the support of many extraordinary customers. However, our growth and geographic expansion prompted us to look for partners who could bring their expertise and capital to help us do so more successfully.

Because we had always been profitable, and had a great reputation among our clients, we were able to attract the ideal partners for our global expansion, such as Illuminate Financial, which counts Citibank or JP Morgan among its LPs, Exor Ventures of the Agnelli family, Madrone Capital of the Walton family, LTS and Arpex Capital, which are the family offices of the best entrepreneurs in the region, and Argentina’s Overboost. The demand for the round was 8 times higher than planned, so we were able to choose our partners very selectively.

BL: And finally, who are N5 Now’s main customers?

JC: We have customers in 18 countries, mainly in Latin America, but also in Europe, the United States and the Middle East. They range from the world’s largest banks, insurance companies and payment methods, to medium-sized cooperatives or financial institutions. Currently, there are more than 70, including Mastercard, Santander, Itaú Zurich, Sura, N26, BCP.

At the end of 2023, the company recorded a 275% increase in the number of customers and a 219% increase in Annual Recurring Revenue (ARR). In addition, it is projected to close 2024 with a total turnover of US$20 million.

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