Sramana Mitra: What was the structure? Did AstroPay put in money into dLocal? How did you financially engineer this?
Sebastian Kanovich: We share most of the shareholders. dLocal shares existing customers from AstroPay. We lost money for one month but after that, we managed to break even. We’ve been profitable since then. We didn’t have to raise any money.
Sramana Mitra: Let’s talk about the business of dLocal. How do you go to market?
Sebastian Kanovich: There are two ways for us to expand. We don’t have end users. We’re a 100% B2B company. One thing we need to do is bring as many merchants as possible to our technology. That’s one part. The other part is to have those same merchants go into as many geographies as possible. We are constantly adding new geographies.
I said we started in Brazil. Then we added Argentina, Uruguay, Chile, Colombia, Peru, Mexico, and Paraguay. Two years ago, we added China and Turkey, and we recently added India. Hopefully, before the end of this year, we’ll have, at least, four or five more countries.
Sramana Mitra: This is an entrepreneur journey story. I’m interested in how you built this company. Can you try to shift gears to tell the story? When did you spin off dLocal?
Sebastian Kanovich: One year ago.
Sramana Mitra: What was the first customer that got on the dLocal platform to do their own private label payment system?
Sebastian Kanovich: There’s no such thing as the first customer. There was a batch of customers that came from AstroPay.
Sramana Mitra: When you spun off, how many customers are we talking here?
Sebastian Kanovich: 40.
Sramana Mitra: What kind of customers are we talking? Are these retailers?
Sebastian Kanovich: 99% were e-commerce merchants.
Sramana Mitra: Basically you were creating a private label card for these e-commerce merchants? What was the nature of the solution that you were selling to these e-commerce merchants?
Sebastian Kanovich: We gave them one API which allowed them access to 140 payment methods.
Sramana Mitra: What I’m trying to understand is you were doing a prepaid card in AstroPay. What you spun off was the software system that you were using to power the prepaid card and you decided to offer that to different merchants as their payment solution. Is that the case for the spin off?
Sebastian Kanovich: I’m not sure how much you are aware of the payments world. Our prepaid card has 120 payment methods. We leveraged that network. We built that under one single API and we said to the merchants, “If you want to get access to this world of payment methods, you don’t need to use a prepaid card. All you need to have is one integration.”
Sramana Mitra: You’re basically enabling those payment methods for the e-commerce merchants through these 120 integrations.
Sebastian Kanovich: What we do is exactly what Stripe does for emerging markets.