Sebastian Kreis, Xepelin’s CEO: “For entrepreneurs, the scarcest resource is conviction”

Fintech startups attracted 43% of the total venture capital investment in Latin America and the Caribbean in 2022, worth approximately $3.354bn. The region is also the only one in the world to experience an increase in fintech funding in the second quarter of 2023, with fintech companies raising $500 million, an increase of 150% from the previous quarter.

Some countries reached important milestones, such as Chile, where the fintech Xepelin led the largest series B round in the history of a Chilean startup, for $111 million. This scaleup, which offers a B2B management platform and financial services such as financing for advanced payment of bills, thus repeated the feat it had already achieved in 2021 with the highest series A round in Chile to date. Sebastian Kreis, co-founder and CEO of Xepelin, tells us about the keys to the success of this scaleup, which has already expanded to Colombia and Mexico.

How did the idea for Xepelin come about, and what is its added value? 

The idea was created more than ten years ago, when I realised that solutions were not focused on solving the real pain points of B2B customers. When I went to Silicon Valley in 2013 and witnessed the start of Airbnb and Uber, I realised that the technology there was starting to provide access to services that didn’t exist before, and which could be a very useful tool to solve real problems. That’s when I said: “We need to do this in Latin America.”

Why did we create Xepelin? We saw a huge opportunity: although there are many companies in Latin America, a solution that gave them access to a simple platform and intuitive financial services that were easy to understand and solved their pain points didn’t exist. We realised that many companies were making decisions without being data-driven, because the flow of information was in one place and the flow of money was in another. I started thinking about how we could connect the two to get real-time information from companies and transform the way they make business decisions and manage their money. To do this, we designed financial services to solve specific problems and facilitate communication with the supplier and customer ecosystem: advancing and helping to make payments quickly, effectively and easily. Relevant information gives us our competitive edge.

What differentiates Xepelin from other fintech approaches or traditional channels for access to advance financing? How does it use technology to provide this service? 

We have created a platform through which companies give us access to some of their information in real time. The secret of our success is the way in which we create this network of companies. Our customers manage their customer and supplier relationships through us, which allows us not only to understand how companies work, but also the relationships, the different clusters, that form between them. In this way, we apply artificial intelligence to payments, relationships, recurrences, sectors, prices, etc., which allows us to draw conclusions about the network.

Although the company was founded in Chile, Mexico is currently its main market. What challenges and lessons have you learned from your internationalisation experience? 

The truth is that our vision was always to be a regional company, so as we grew and achieved our goals there, I came directly to Mexico to set up a new operation here. With this strategy, we tried to understand the Mexican market, its similarities and differences with the Chilean market, the level of trust customers had in the solutions and how we could differentiate ourselves to create it.

What are the keys to attracting investor interest? Given the recent slowdown in venture capital, how can you differentiate yourself? 

First of all, you have to be clear about the vision of the company. We told our investors what we were going to do at each stage and we followed through. There were a lot of learning curves, but we also had good results in terms of customers, revenue, etc. I think the fact that we have delivered in the best possible way has helped us stand out in the market.

Secondly, one of the things that I think is most important for our company is the way we build trust at every stage. When we do a financing round, we are not just looking for capital, we are looking for partners to support us in the next stages. So we always invite them to be part of our solution for the next ten years or more.

Thirdly, we are very clear about what our competitive advantages and strengths are and what we need to develop. In the markets, asset prices go up and down, but in the end, good companies always grow and solve their customers’ problems.

How would you rate the collaboration between Xepelin and BBVA Spark?

The fact that BBVA is committed to having a service dedicated to high growth is very important. It is a strategic move that shows that they understand fast-growing technology companies and their specificities, which allows them to develop this muscle when it comes to creating ecosystems.

What trends will characterise the evolution of the fintech ecosystem in Latin America, and specifically in the markets where you are present?

Firstly, artificial intelligence, especially generative intelligence, because it gives us a new way to engage with this technology and generate significant impact. It will bring economy and efficiency to the financial industry and to the relationship with the customer, making financial products and software applications smarter: in the right place, directed to the right person, solving what needs to be solved.

Secondly, I would say that there is a tendency to focus on the communication channels that exist between companies and their customers. Fintech participates in all of this and generates alliances with platforms, so I think embedded finance is going to be very interesting in the future. Companies that have a lot of customers will incorporate financial services, but financial companies will also incorporate services from other platforms.

If you had to give some advice to other entrepreneurs who are considering starting their own business, or who already own one and want to accelerate their growth in the current situation of global uncertainty, what would your advice be? 

I would tell them three things: the first is that the scarcest resource for entrepreneurs in general is conviction. So they have to work on that conviction and know how to build the future they imagine and connect it to the current reality in order to create value for customers and investors in a relevant way. Secondly, the most important thing is the team: they have to think about how they can create a team that is complementary and that can solve and build that vision. And thirdly, I think one of the most important things is to be very clear about the problems that need to be solved, because people tend to focus on the solutions, when the most important thing is the problem: that’s where 50% of the solution is.