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Q&A with Daniel Bilbao: The Truora Story

Latin America is a hotbed for identity fraud with around one-quarter of all digital accounts rejected due to fraudulent identities. Daniel Bilbao created Truora to combat this problem by providing businesses with immediate background check software; traditional background checks in Latin America take up to three weeks. While this status quo is suitable for large businesses, startups and SMEs are suffering a bottleneck in hiring due to fear of fraud when it comes to recruiting.

Truora is working to solve the real problems faced by small businesses and startups of fraud and identity authentication in Latin America. Daniel explains what he has learned from starting and growing a company in the Latin American ecosystem and tips that have helped Truora to become the company it is today.

What is Truora?

Truora is an instant background check company that helps businesses with their recruitment and compliance processes. In less than 20 seconds, the Truora platform can access the criminal, legal, and vehicular records, as well as national and international governmental lists of any ID number.

Truora is the answer to the long and complicated background check process that is currently the norm in Latin America, which does not adequately serve the needs of small businesses and startups. Truora is modeled on the US startup, Checkr, as Daniel saw an opportunity in the Latin American market for a similar system that could reinvent the way businesses currently conduct requisite background checks.

How did Truora become the company it is now?

One of the most important aspects of building Truora was the ability to scale and grow rapidly. Daniel approached a few potential customers, such as Uber and Rappi, with the idea for Truora before even building the technology. He wanted to test if this technology could be the answer to a clear problem for these businesses. In this way, Truora was able to secure customers early, which gave them the resources necessary to start to build the product.

The Truora team steadily developed its background check API into an efficient platform that they then offered to businesses in Latin America. From Colombia, Truora has expanded operations into Chile, Mexico, Brazil, Peru, and Puerto Rico. Truora has four co-founders: Daniel Bilbao, Cesar Pino, Maite Muniz Telleria, and Bruno Cecatto.

What has been your experience working with Magma Partners?

The Truora team has worked closely with Magma Partners on various aspects of the company’s development. Daniel explains that the Magma team helped them with their content strategy and supported them as they worked around early issues with their technology and the Truora platform. He also mentions that the relationship with Magma Partners helped Truora to build connections in the Latin American startup ecosystem and has brought press opportunities for the company.

For Daniel, the personal relationship with Nathan Lustig has been particularly gratifying as both share a desire to see the Latin American ecosystem grow and thrive. They look beyond their individual businesses to the bigger picture of Latin America, always considering how to strengthen and build the ecosystem through their work.

Magma Partners invested in Truora’s Seed round in December of 2018 along with MAYA Capital, shortly before the startup was accepted into YCombinator.

What advice would you give to entrepreneurs looking to start a company in Latin America?

Daniel comments that it is hard to build a unicorn startup out of Colombia alone. Whether or not the company is aiming to grow to this size, Latin American entrepreneurs should always look to the whole region for scaling to bring in more investment and build a stronger company.

He also notes his impression that young entrepreneurs are increasingly unwilling to ask for help. Daniel has a personal network of successful founders and entrepreneurs who have acted as an important support system as he has learned to navigate the startup ecosystem. This network is an invaluable resource as the group has been able to mutually feed off one other in learning from their successes and failures in the market. His advice to other entrepreneurs is to surround themselves with other smarter and potentially more successful entrepreneurs from whom to learn and take encouragement.

What is the most important lesson you have learned through your experience with Truora?

As a company with four co-founders, Daniel explains that the team had to learn how to work around conflicts with the other founders when it came to decision-making. Even in a smaller team of two founders, there are likely to be differences in opinion on sensitive aspects of the business, such as choosing investors, hiring employees, and equity splits. Daniel believes that in taking the time to establish strong working relationships Troura is able to manage these disagreements in a professional and healthy way. By purposefully building good relationships based on trust and respect, Truora has created a strong executive team.

Truora was born as a solution to an urgent issue causing bottlenecks in hiring in Latin American businesses. Daniel states that as a developing market, Latin America has not yet developed smart solutions for the new problems posed by the increasing use of technology in the region. For this reason, the Latin American market has many great opportunities for startups that are looking to solve these problems. He has learned that focusing on local issues is a sure way to find a business idea that could be truly successful.

What is next for Truora?

In the coming year, Truora is looking to continue to develop and consolidate the platform’s technology and product quality. They also have plans to launch a new product as they expand Truora throughout Latin America.

Nathan Lustig’s overview of the Latin American ecosystem on Parallel18’s ‘Mentored’ Series

Parallel18 is a government-backed accelerator program founded by Sebastian Vidal to help promote entrepreneurship in Puerto Rico. The program seeks to turn the island into an international hub for tech innovation, and has received applications from startups from more than 48 different countries.

‘Mentored’ is an educational program for Latin American entrepreneurs, where Parallel18 visiting mentors share their knowledge, experiences, and advice.

Our Managing Partner, Nathan Lustig, recently presented on Parallel18’s ‘Mentored’ series to talk about Latin America’s ecosystem. Here’s what to expect from this episode:

  • Hype in LatIn America: Why many venture capital firms are investing in the region
  • An overview of some of the biggest deals in Latin America (Rappi, Nubank, Cornershop, Softbank)
  • How Latin American entrepreneurs have improved
  • China and US investors: Approaching deals in Latin America
  • An overview of Nathan’s podcast, Crossing Borders
  • Advice for entrepreneurs thinking about what business they want to start
  • Books and thought leaders Nathan recommends

Check out the video above for the full episode to hear Nathan’s take on why Latin America’s ecosystem is at an inflection point!  

Q&A with Marta Forero: The UBits Story

Described as the ‘Netflix for corporate training’, the e-learning platform UBits has enabled more than 80,000 individuals at 70 companies across the region to develop their business skills through online courses in management, marketing, customer services, and much more.

Marta Forero, the co-founder of UBits, was the only Latina woman in her YCombinator cohort. Her success in the Latin American startup ecosystem and the YCombinator accelerator program shows how she continues to break barriers for women in the Latin American tech industry. She explains some of the lessons she has learned from her experience starting a company and what it is like being a female founder in Latin America.

What is UBits?

Ubits is a Colombian corporate learning platform that provides online business courses, called ‘Bits’, for large corporations in Latin America, including classes on marketing strategies, sales, and customer service. UBits currently has over 10,000 enrolled students and more than 200 e-courses available online. 

The courses are taught in Spanish across Colombia, Peru, and Mexico, and UBits is now the largest online business learning platform in Latin America.

How did UBits become the company it is now?

Marta and her co-founder Julián Melo share a passion for education and have experience in business management and corporate strategy. They saw an opportunity in the market for a corporate training platform which would help large companies to train their employees in basic aspects of business. 

The company was founded in 2013 when the founders started building the platform and attracting businesses. They worked closely with a corporate bank to assess how to best develop the platform in regards to employee training needs. In 2018, UBits was accepted in  YCombinator and the platform has since grown significantly as more businesses adopt the e-courses.

What has been your experience working with Magma Partners?

Magma Partners invested in UBits in 2019 following a $2M Seed round led by Spectrum 28 and GE32 Capital. Together with this investment, the Magma funding helped UBits to further develop its technology and broaden the range of e-learning courses available.

Marta states that the quality of the UBits courses is one of the most important aspects of the company, and the Magma investment enabled Marta and Julián to build a highly-skilled tech team to help them achieve this goal. This team has improved and developed the technology to ensure the highest quality of e-learning for their customer businesses. 

Marta also mentions that Nathan Lustig, Managing Partner at Magma, helped them with advice and mentoring in certain aspects of early development. She says that he was always ready to help them out with any doubts or questions to ensure that they built the best version of UBits possible.

What is the most important lesson you have learned through your experience with UBits and as a female entrepreneur in Latin America?

Although perhaps a cliché, Marta expresses the need for women in business to believe in themselves and to break free of the barriers set before them in the startup ecosystem. She says that if you believe in yourself, you will be surprised by what you can achieve. 

Marta also expresses the importance of creating a community of like-minded people who will support and build each other up. She mentions how her own connections in the business world, especially the relationships with other female founders, have helped her overcome problems and have made her more successful through mutual learning and support.

What advice would you give to entrepreneurs looking to start their own company?

For Marta, the most important piece of advice is to work hard and believe in the process. Although it may take time, with hard work and dedication the results will soon start to show. She also says that one does not have to have a lot of experience to become a successful entrepreneur, merely a willingness to work for a dream and a belief in oneself. If there is drive and passion, Marta believes that anyone can create a successful business.

What is next for UBits?

UBits is constantly seeking to expand its reach across Latin America to more countries and businesses. As they consolidate their presence in Colombia, Mexico, and Peru, UBits is now looking for a way into the Chilean market. Ubits is also looking to raise another funding round towards the end of the year.

Moons joins Magma Partners’ Fund II Portfolio

Moons is a Mexican startup that specializes in affordable orthodontics. It aims to be the Invisalign of Latin America with invisible aligners that straighten and whiten patients’ teeth in an average of 6 months. Patients can go to a Moons Studio to see a licensed orthodontist, and Moons sends custom clear aligners to their homes at an accessible price. 

Tommaso Tomba was already familiar with the Mexican market from his previous work in e-commerce Linio when he created Moons in December 2018, along with Leonardo Miron.

Magma Partners made a Pre-Seed investment in Moons before the startup joined Y Combinator’s latest cohort. Moons chose to apply to the prestigious accelerator to raise capital and open doors in the US for future expansions.

Moons plans to go into other healthcare verticals besides the dental market, and currently offers its services in Mexico, Colombia, and soon, throughout Latin America.

Magma Partners invests in EdTech Ubits

Ubits is a Colombian corporate learning platform that provides online courses for large corporations in Latin America. UBits currently has over 10,000 enrolled students and more than 200 e-courses available online.

More than 80,000 professionals at 70 companies across Latin America have been able to develop their skills through the platform, which offers a reduced training cost of 40% for enrolled companies. 

The online platform offers e-learning courses called ‘Bits’, specifically designed for rapid learning. Courses include marketing strategies, sales, and customer services, such as client communication and improving the user experience.

We’re excited to invest to support UBits founders Marta Forero and Julian Melo.

Leading UBits, Marta Forero was the only Latina woman in her Y Combinator cohort, and still one of very few to have participated. She continues to break barriers for women in the LatAm tech industry through the success of UBits, both in Y Combinator and in the company’s rapid expansion through Peru, Chile, and Mexico.

Magma Invests in Colombia Startup Vozy

Vozy is a voice communication platform that helps businesses provide more efficient customer service through their AI voice services. Vozy’s virtual assistant, Lili, is capable of understanding and communicating in 8 different regional accents.

The Colombian startup is on a mission to give businesses the ability to automate communication by creating personalized customer experiences at scale with a human touch. Businesses can communicate with their customers the way they want, when they want, and on any device.

Vozy was founded in 2016 in Medellín, Colombia by Humberto Pertuz, and currently has its headquarters in Miami. It operates in more than 15 countries, including Mexico, Chile, Peru, Panama, Argentina, Colombia, and the US.

The Colombian startup has raised a total of $460K over three investment rounds including investors Parallel18, Troopa, and most recently, Magma Partners. 

Vozy is the first company to bring neuronal text-to-speech services in Spanish to Latin America. It has over 200 customers including companies like MAPFRE, Adecco, and Scotiabank. 

Magma Partners Invests in Dataplor

Dataplor is a small business intelligence platform providing valuable information on SMEs in emerging markets that are often not yet listed online. Through hand-collected and verified data the company aims to combat the issue of untapped business data in emerging markets through the use of hyperlocal information that can benefit global companies.

Dataplor now has over 100,000 ‘feet-on-the-street explorers’ tasked with collecting key information from small businesses such as exact location, opening hours, owner’s names and contact info, and payment methods, which is then connected to larger companies such as American Express, iZettle, PayPal and Google in Mexico. Prior to Dataplor, more than 80% of these SMEs had no digital footprint at all, making them untraceable for both customers and global partners.

Dataplor was founded in 2016 by Geoffrey Michener and is based in Los Angeles, CA and Mexico City. They are currently active across Latin America, collecting data in some of the major emerging markets in the region, including Mexico, Brazil and Colombia.

Magma Partners invested alongside Quest Venture Partners, Blue Startups, ff Venture Capital, and Sidekick Fund.

In Mexico, where 80% of businesses don’t have any digital footprint and less than 5% have a website, Dataplor is filling in the gaps left by Google and other major databases that have not yet reached these markets. With Dataplor, the gap between global companies and Latin American SMEs is closing, bringing new digital distribution and investment opportunities for both sides.

Magma Partners’ Q1 2019 Update

The Magma Team together in the office in February 2018.

After an active 2018, we’ve continued to push forward in 2019. Since our last update, we’ve invested in 4 new companies from four different countries, including Base Operations. We’ve also continued to expand our team and the services that we’re helping to provide in the Latin American ecosystem.

We now support 51 companies in our portfolio, which now sell $29M+ each year, have raised $46M in follow-on funding, and employ more than 600 people worldwide. Our growing team provides diverse experiences and networks to our portfolio, including support in marketing, PR, DevOps, sales, and international expansion strategies and covers geographies like Chile, USA, Mexico, Colombia and China. We’re excited to further support the startups in our portfolio as they continue grow!

Check out the following overview of news from our fund and our portfolio for Q1 2019.

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Magma Partners’ Term Sheet Review (free for all startups)

In eight years of working in the Latin American startup ecosystem, we’ve seen a lot of term sheets. A term sheet is the document that defines the relationship between a startup and its investors, including potentially-confusing legal clauses surrounding valuation, preferred stock, vesting, and investment instruments. Despite the best of intentions, VCs often provide startups with term sheets that do not properly align incentives for a successful investment relationship.

In the worst of cases, we’ve seen term sheets that are abusive or exploitative to the entrepreneur, or deals that look more like private equity than venture capital. These issues generally arise from lack of experience, rather than bad will, but they can kill a startup before the deal is even signed.

Financing can be a sensitive topic, but transparency is always the best policy. Entrepreneurs shouldn’t feel they have to analyze their term sheets in a vacuum. Magma Partners is dedicated to developing a healthy startup ecosystem in Latin America. We will review any term sheet you have, at any stage, and give you feedback for free.

What is a term sheet?

A term sheet is a blueprint for your future relationship with your investor. If you think of your relationship with VC as a marriage, a term sheet is your premarital agreement.

What does a term sheet include?

As Brad Feld and Jason Mendelson said in their book Venture Deals (our top recommended VC book), every term sheet consists of two kinds of terms: economic terms that decide the return investors will get in a liquidity event, and control terms that allow investors to exercise control over a business or veto certain decisions the company can make.

What can potentially go wrong?

Couples can split up. So do VC and founders. And getting the term sheet wrong may lead you to lose control over your own startup if things go sour with your VC. Yet many entrepreneurs don’t focus on the term sheet because they lack fundraising experience, guidance from seasoned mentors, or a reliable lawyer who understands the needs of a startup.

Leveraging our experience to support entrepreneurs

Magma Partners has seen hundreds of term sheets from Latin America, the US and China since we got started in 2014. We have often reviewed term sheets for entrepreneurs outside of our portfolio to support the ecosystem. We can recognize a term sheet that exploits entrepreneurs and establish unfair terms for the VC. We’ve seen entrepreneurs make mistakes that are totally avoidable. We have decided to offer our experience to help entrepreneurs build better companies and better relationships with venture capitalists.

Why are we doing this?

Our mission is to help startups grow to their full potential, but we can’t possibly invest in every single startup. Instead, we are giving back by trying to build a transparent startup ecosystem. We cannot achieve this goal without advocating for healthy relationships between investors and startups. Our term sheet review will help startups avoid investment traps so investors’ and startups’ interests are aligned from the start. We believe in paying it forward and this is one way we do it.

Questions about your term sheet?

Please send us a message through this form with any questions you have about your term sheets. We will happy to provide you feedback that we think best represents your interest.


Magma Partners invests in Keynua

Keynua is a platform for digital signatures that works to improve online identity verification through e-signatures and video identification technology.

The startup aims to establish a region-wide platform for identifying individuals and validating their transactions without the need for a notary, which will aid businesses in Latin America to streamline internal processes.

With Keynua, individuals record a three-second video where they verbally agree and ‘sign’ a document as well as providing proof of their visual identity as an alternative way of signing official documents.

Keynua was founded by Alfredo Granda, Inma Cañadas, Luis Alban, and Manuel Olguin in early 2019. The company is based in Lima, Peru and aims to expand into the rest of the country before scaling in the region.

Keynua is led by the same Peruvian team that created Cinepapaya, the largest movie ticketing service in the region until it was acquired by Fandango in 2016.

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