Cobre: “I am passionate about how an infrastructure can change the lives of millions of people and businesses”
Colombian fintech Cobre has set out to modernize a corporate payments infrastructure that, according to its CEO and co-founder Jos茅 Vicente Gede贸n, has been stagnant for 40 years. With capital and a team focused on solving a problem, this startup aims to demonstrate to companies that change is possible.
Venture capital investment in Latin America decreased by 63% in 2023 compared to 2022, according to Crunchbase data. However, the traction and results of a different entrepreneurial idea allowed fintech Cobre to stand out from this trend and raise $13 million in an extension to its Series A funding round. This Bogot谩-based startup offers a real-time payments infrastructure available through a corporate treasury platform or API (application programming interfaces), which accelerates money movement for companies and centralizes treasury and bank reconciliation by connecting banks and businesses. This year, it plans to expand to Mexico.
“Starting a company in Latin America or growing it is not easy. That’s why we believe that all the efficiencies we can generate are a resource for the entrepreneur to focus on growing their business, and we focus on the company’s money movement,” explains Cobre CEO Jos茅 Vicente Gede贸n, who co-founded the company in 2020 with Felipe Gede贸n, Alberto Chejne, and Jos茅 Donato.
What is Cobre’s value proposition, and how were the company’s first steps?
Cobre began to take shape 10 years ago. In 2014, during my first year of university, I read a thesis about a company called M-PESA, a subsidiary of Vodafone in Kenya [launched alongside the mobile operator Safaricom]. Twenty years ago, they realized they could allow people to send money via text message, which was a revolution because it enabled real-time money transfers, something that did not exist anywhere at that time.
When I read that, more than 15% of Kenya’s GDP was moving through M-PESA every month. And for me, it was fascinating. The first thing I tried to do was set up M-PESA in Colombia, eight or nine years ago. For many reasons I wasn鈥檛 able to, but I realized what I was passionate about, which was how a real-time, cost-effective, and reliable infrastructure could change the lives of millions of people and businesses. I also realized that there was a much bigger opportunity in solving money movement problems for companies than for individuals.
How do you help your clients improve operations and bank reconciliation?
Our mission is to solve the most complex money movement problems for companies in Latin America, starting with Colombia and Mexico. What does this mean? Firstly, payment initiation: companies today do not have a way to initiate payments from their bank accounts and platforms; the only way to do so is by uploading an Excel file to a banking portal. There is no software or infrastructure component for that.
Secondly, payment infrastructures in Latin America are relatively old: they are not real-time, they are unreliable, and they provide very little data. The third problem we are trying to solve is payment orchestration. Large companies usually work with several different banks, have three collection methods (cash, card, and transfers), and must orchestrate all these payment methods. And finally, bank reconciliation is very tedious because all the data lives in different portals, in different formats, and at different times.
Cobre offers four things to companies: firstly, initiate frictionless payments with a click and with a single file, regardless of the type of payment, the originating bank, or the destination bank. Secondly, we allow companies to connect all their bank accounts and manage their treasury from one place. We are directly connected to the infrastructure of the six largest banks in Colombia, including BBVA.
Thirdly, we allow companies to make real-time book-to-book payments [transfers between accounts within the same bank], because they do not go through ACH [interbank transfers], but are accounting movements within each bank. And finally, we offer the company a single place to do all their reconciliation in real-time. We take all the response files from all the banks and all the payment methods, and we put them in a single format and file.
In 2023, Cobre raised $13 million in funding in its Series B round. How did you approach this round in a scenario of venture capital slowdown like that of 2023?
We are a bit of a sui generis company because from the beginning, we have had traction to raise capital. The first round we raised, in August 2020, we didn’t raise it with just an idea, but with a product already on the market, with users, with companies paying us for our product, although on a much smaller scale than today. We have always raised capital based on traction, numbers, and execution; and that’s what has allowed us to be in business as usual.
We raised money last year in probably the worst time, but the results, the execution, and the growth were there. In 2023, we grew 12 times in revenue, while reducing the company’s losses by 70%. For this type of execution and traction, I believe there will always be capital.
What does the relationship with BBVA Spark bring to Cobre?
BBVA Spark is a great initiative because it acts as a translator between companies like us and banks. At Cobre, we have learned to speak the language of banks so they understand why our software is beneficial to them and become our allies, and BBVA Spark is a great help with that.
BBVA is also one of the most important banks for us because it allows us to be regional players. We are connected with BBVA Colombia, and our next country is Mexico, where BBVA is the most important bank. BBVA Spark has been key in helping us create relationships between these two countries and understanding how the bank works and how we can really leverage its resources.
Can you share some figures about the company’s growth?
We started 2023 with 30 clients, today we have 150. As for TPV or total payment volume, the total money processed, we started 2023 with $15 million in monthly TPV and ended with $250 million in December 2023. Throughout 2023, we processed $1 billion in TPV, a very significant figure that already puts us in another league. We are also doing close to a million monthly transactions.
What advice would you give to an entrepreneur looking to scale their business in 2024?
There is a book that helped me a lot, ‘Fall in love with the problem, not the solution’ [by Waze co-founder Uri Levin]. That is very important. If you find a problem and you are really passionate about it, it will be much easier than if you find a solution and fall in love with that solution.
And related to that, what they say about ‘play to your strengths.’ Look for things you are good at, by experience, by nature, by passion; things that get you out of bed every morning. Play at what you are good at, and that will make your life much easier and more fun.
