Interview between Maria Aponte, Head of Programs at Fintech Cadence and Matias Maciel, CFO at Rextie, a recent graduate in our Ascension 2022 Cohort.
Rextie offers the chance for their users to buy and sell USD through their digital platform for both the B2C and B2B markets. The fastest and safest way, at the best price!
Can you tell us about your backstory and what inspired you to take the leap into building Rextie?
Everything started with our CEO, Mateu Batle. He used to be one of those who needed to exchange currency on a monthly basis. He is an experienced software engineer from Spain but moved to Peru to be with Claudia Quintanilla, our COO and Co-founder. He was working for a company from abroad and needed to turn his USD into Peruvian Soles every month. He had to go to the bank branch and withdraw the USD from his bank account, then, go out to the street with the cash in hand and exchange the USD to Soles through a person (who basically was an informal FX broker), with all the risks that kind of transaction implies. Finally, he had to go back to the bank with the Soles and deposit them into his Soles bank account. All, because the bank’s exchange rate was not the best. One day, based on his software engineer background, he started to think: “there’s got to be a better way to do this by incorporating technology into the process”. And this is how the idea of Rextie was born.
Even though Rextie expanded to Canada last year, it has been active in the Peruvian market since 2017. What has been the most rewarding aspect you have experienced in scaling up this startup for the past 6 years?
The most rewarding aspect for me has been to be able to provide jobs and therefore a source of income to more than 70 families in Peru right now.
From my understanding, Rextie was the first currency exchange app in Peru. What were some of the most challenging aspects of being a pioneer?
First of all, as a company that provides financial services, the most challenging aspect was being able to generate trust in our users. In our business model, the user has to transfer the funds to our account first. That was a huge step that we eventually were able to solve. Additionally, in a country like Peru, access to sources of capital is very limited, so we had to grow based on bootstrapping since year 1. In addition, the availability to engage qualified personnel to join an early-stage startup is always hard. Last but not least, for a fintech, establishing bank relationships is always one of the hardest things.
Rextie has already more than 70 employees and has completed more than 1 million transactions, positioning itself as the leader in the currency exchange industry in Peru. What would you say is the No .1 priority the founding team needs to focus on in order to build a successful and sustainable startup?
We believe that the number one priority right now is being able to establish operations in a second country (Canada). This milestone has many implications for the short, medium, and long term for the company. Not only in terms of business growth and scaling but also in terms of lowering our operational risk and multiplying our chances of getting fresh investments that will help us to continue our journey in more countries in the region.
What are some of the next big milestones for Rextie?
Of course, the next huge milestone will be to operate in Canada. Other important milestones have to do with expanding our service offering in Peru. Next year we will be getting our license from the local regulator to operate on the remittances and cross-border payments market. Additionally, we are launching soon a new payments solution, oriented to satisfy some businesses’ needs for cash in/cash out. Finally, next year we expect to fully implement the last 2 steps of our strategic partnership with Visa in Peru.
As a leader, what are some of the most important skill sets that aspiring entrepreneurs should develop?
I strongly believe that a leader must be really great at hearing other people. You have to be able to listen to everybody and understand that your position as a leader doesn’t mean that you have people working for you, it means that you are there to help them succeed. A founder needs to be resilient, and have really strong soft skills (especially those related to communication). Good or bad communication in an organization can determine the failure or success of IT.
Being a founder and undergoing the startup journey can be a rollercoaster. What have been the driving forces to keep you going despite the lows and what advice would you give to founders?
It is crucial to be convinced that your offering has a meaningful impact on its users. You have to be confident that even though things may take time to develop, eventually they will. Also, your family and friends play a decisive role in whatever new endeavor you pursue. You need to have them right beside you.
You’ve been part of the 5th Ascension Cohort that has undertaken a new spin on supporting founders by maximizing their funding opportunities and fostering peer support from founders. What have been some of the biggest takeaways for you?
I think I represent a special case within the cohort, since I am not from Canada, and needed to start everything from scratch. That includes primarily expanding my network (business peers, and/or from the industry). The support that Ascension has provided me in that field is priceless. Additionally, I’ve learned a lot throughout the way about the fundraising process and ecosystem in Canada. I like to say as well, that I have also been able to make new friends thanks to the Program.
As a fintech originally based in LATAM and now expanding into the Canadian market, can you talk about some of the support you’ve received as a startup either in Peru or in the Canadian market and how do you think each country can do better in supporting entrepreneurs?
We have been one of the few startups in Peru that has been able to raise some Grant funds along the way. We have been granted two times in Peru so far. One was in 2018 for around $50,000 and this year 2022 for around $110,000. Nevertheless, I have to say that most companies don’t have that luck. There are not enough grant programs in Peru and access to venture capital is very limited, to say the least. In contrast, in Canada, a wide variety of institutions provides important support for new companies.
As a FinTech and a Money Service Business, we need more help in establishing those relationships with banks and traditional financial institutions. We need bank accounts to operate, and most of the time something as simple as that becomes the biggest obstacle in our way.
Wrapping up 2022 what’s been one of the biggest lessons you’ve learned you’ll take with you in the new year?
The first and most important, because is not only related to your professional but also to your personal life, would be to take advantage NOW of the opportunities that life presents to you. Don’t leave things for “later” “when I have the time” or “if X happens”. We made the decision to enter the Canadian market, and every day I’m convinced that this was the right time.
The second lesson is to not underestimate how hard things can be at the beginning. There are a lot of cultural, financial, and regulatory differences that you have to consider when entering a new market. Finally, always be conservative in your projections.
Any books or podcasts you recommend?
I highly recommend “Masters of Scale” podcast from Reid Hoffman. This one is made for and by entrepreneurs. Also, “We Study Billionaires” of “The Investor Podcast”. This is more for people that want to better understand the financial markets and handle their personal finances.