Juan Ignacio García, CEO of Boopos: “The practical applications of AI cannot be ignored”

“Technology is what allows us to offer solutions,” says Juan Ignacio García emphatically, who is the CEO of the Spanish fintech company Boopos, co-founded in 2021 with Teresa Burgos and Javier Zurita. The startup, based in Madrid and Miami, offers flexible, non-dilutive loans for business acquisitions. Its model is based on revenue-based lending, whereby the client repays the loan amount as a percentage of their income through a fully digitalised process. Boopos focuses on SaaS and e-commerce businesses on marketplaces and platforms such as Amazon, working with both entrepreneurs and aggregators who want to buy a company and owners or brokers who want to sell them.

Before founding Boopos, you were Cabify’s Chief Financial Officer for eight years. In that period, the company grew from a turnover of US$1 million to US$800 million, and in 2018 achieved the status of unicorn (companies that have achieved a valuation equal to or greater than US$1 billion in financing rounds before going public). Why did you decide to leave Cabify to start your own company?

At Cabify, I was part of many processes, not only in the financial area, but I always had the desire to start my own company and lead my own project. Boopos was created precisely with that in mind: our purpose is to help others to succeed in creating their own business and to fulfil their entrepreneurial vocations.

Your lending platform offers flexible financing to facilitate the purchase of digital businesses. Why have you decided to focus your solution on M&A strategy as a growth driver for other companies? 

When I was thinking about starting a business, I looked into the possibility of buying several different brands myself, but in the end I couldn’t get the necessary financing. So the origin of Boopos is precisely in this first-person experience of the need for financing to be available and accessible to facilitate the process of buying companies.

In the US, around half a million small companies are sold every year, while in Europe the figure is around 300,000 to 400,000 a year: it is a huge universe of companies changing hands, but in a process that is not yet well defined. Some transactions never close, or the companies are unable to find a buyer that values the company at its full value. For example, on average, each broker receives between 50 and 60 bids for a company in a good economic moment and about half that in a bear market. As many as 90 to 95% of potential buyers do not have the necessary funds to actually make the purchase. There is therefore a major problem of lack of financing and lack of specialisation in this process of buying and selling companies.

What differences do you see in this buying and selling process between the US and Europe? 

I would say that in the US the market is more professionalised, what is lacking is access to capital. In Europe, the ecosystem still needs to be further developed, although specialised platforms are beginning to emerge. The opportunity in the US is more tangible and immediate, while in Europe the potential for growth is greater, although we are starting from further back.

Boopos is committed to streamlining the acquisition of companies, in a 100% online process that can be authorised in less than 48 hours and financed in a week. How do you manage to balance this speed with a rigorous assessment of the applications?

What makes our solution possible is technology. We extract data in real time from different platforms such as Amazon Web Services to prepare automated and updated reports and valuations of the companies we work with. And although our team personally reviews these reports, we generally agree with the conclusions reached by the technology itself. Without this ability to connect different platforms and cross-reference data, we would not be able to deliver the flexibility our customers need.

Last year, Boopos attracted a $30 million investment, a combination of debt and seed capital, and closed another series A round for $58 million, which also combined equity and debt investment. What has been the company’s strategy for acquiring financing?

Because of our model, Boopos is unique in that it needs to access a large amount of financing in a debt format, in order to provide that capital to our customers. So our rounds combine venture capital with debt.

When it comes to accessing financing, I would say that the most important thing is to find the right funders, who understand your project and its needs. We have had the opportunity to work with partners such as Fasanara Capital, which led the seed financing round we carried out in February last year; Bonsai Partners [leader of the Series A round, which also involved funds such as K Fund, Actyus and Noa Capital] and also, since last year, with BBVA Spark. This has allowed us to continue to grow and to have the capital we need to, in turn, support other companies.

Technological innovation is also key to attracting investment in 2023. Earlier this year, BBVA Spark identified application programming interfaces (APIs) as one of the technological trends that will mark 2023 and will drive banking innovations such as embedded finance, among others such as blockchain and generative artificial intelligence. What innovative technologies and solutions do you think will lead the way in the fintech sector?

The practical applications of artificial intelligence cannot be ignored. We are starting to use it to perform a 360-degree analysis of the owners of the businesses we work with and not just the businesses themselves, which allows us to gain a deeper understanding of their viability and potential. AI is a technology that will undoubtedly impact several business areas in the lending sector, and fintech in general. Another technological trend that I would highlight is big data and data intelligence, and especially real-time updated data connections between different platforms, which allow us to extrapolate trends in the short term.

What is Boopos’ growth plan for the coming years? Are you planning to incorporate new solutions?

Over the last few years we have been consolidating a portfolio of clients and building networks of trust, and our purpose is to be able to offer them new services with which to expand our portfolio of solutions. For example, something that we are already doing but are not currently monetising is scouting, i.e., searching for companies of interest to acquire. Our clients are also very interested in our analysis services, which allow them to extract useful information on how their business is evolving, how their margins are improving, how this impacts on the value of the company and how they need to act, etc.

If you had to give advice to other entrepreneurs who are considering launching their own project in the current situation of uncertainty, what would it be?

For me, the most important thing is the team. Find people who are enthusiastic about the project and committed; it doesn’t matter if they don’t have the most excellent CV, but they must understand the company’s values and contribute their dedication and talent. And also, as they say, I would recommend that you fall in love with the problem and not the solution: because if you focus on the problem you can come up with multiple solutions to answer it, whereas, if you fall in love with the solution, you may not find a problem to apply it to.