Interview between Maria Aponte, Head of Programs at Fintech Cadence and Rene Blanco, Founder and Director of Operations at Labora, a recent graduate in our Ascension 2022 Cohort.
LABORA does real-time payroll transfers for farmers on behalf of their temporary farm workers at discounted fees and exchange rates.
Can you tell us about your backstory and what inspired you to take the leap into building Labora?
In 2018, while I was studying for an Executive MBA at Simon Fraser University, a temporary foreign worker, a friend of mine, mentioned the time-consuming and costly process of remitting his money to Mexico. This process of sending and collecting cash has remained the same for 50 years. When I looked at the problem, I saw an opportunity to help farm owners ease their administrative work while helping seasonal farm workers save time and money.
The solution was LABORA, a digital payment platform that provides international money transfers at discounted fees and exchange rates. Also, we help the workers to file their tax returns and transfer money to their retirement savings plans.
Labora brings a substantial social impact element to the fintech landscape by supporting historically underserved demographics within this sector. What has been the most rewarding aspect of bringing Labora to life?
I believe it is the close bond and relationship we create with the temporary foreign workers. Once the workers experience our services and compare us with their previous options, they keep using LABORA and contact us again when they return to Canada for the following farming season.
Workers know that we saved them time and money, built a credit history back home, and now we impact their long-term wealth by sending part of their bi-weekly remittances to their retirement savings plans (AFORES in Mexico).
The workers can save some of the money they send back home for retirement, which is a game changer. Usually, workers relied on their sons to maintain them, and by saving for their retirement now, they can rely on themselves.
On the other side, what have been some of the most challenging aspects of scaling up Labora?
We need to find an ideal investor who cares about the ROI and social impact on seasonal workers and their families. Some retail investors look for ethically sourced products with low-carbon food print and giving back to communities, but Fintech investors seem unconnected with generating a social impact.
LABORA looks to build a favorable financial ecosystem that improves its customers’ long-term wealth.
From an investor perspective, an ideal company diminishes its acquisition costs over time and has a high retention of its clients. That’s what LABORA does with our clients. We create that space that improves seasonal foreign workers’ financial conditions. Therefore, they stay with us, making our customer defection close to none.
Fintech has been key in LATAM in actively fighting inequality within the society by providing financial services to "under-banked" populations. Do you get inspired by any work or startups in the region? Have you felt there's been an impact of this boom on Labora's growth?
Fintechs in LATAM have done a fantastic job trying to provide financial services with new and creative approaches to serve “under-banked” populations that live in dispersed rural communities where a physical bank is hours away. Also, these Fintechs are doing a great job in introducing online payment services to a population used to handling and keeping cash, which has become insecure.
LABORA is trying to serve this LATAM market but in Canada. The tragedy of these “unbanked workers” is that despite coming legally to Canada to perform seasonal farm work or in fisheries, construction, hospitality, etc., the financial institutions have not been creative enough to provide them with financial services (GICs, mutual funds, TFSAs, RRSPs) tailored to their needs. These workers use the bank’s ATMs and tellers to cash cheques or take cash and send it back home but not through the bank.
We want some of that money to stay in Canada, incrementing its value, and then workers can use it in retirement. That is our challenge – to improve their wealth not only in their countries of origin but also in Canada, utilizing the Canadian banking and fintech system and services.
What are some of the next big milestones for Labora?
We want to gain the niche of seasonal agricultural workers, leverage Canadian farms with operations in the United States to serve their workers there, therefore scale in Canada and the United States, and then expand to other sectors that employ temporary foreign workers.
As a founder and leader, what are some of the most important skill sets that aspiring entrepreneurs should develop?
I think entrepreneurs must be resilient, researchful and persistent, highly motivated, and passionate about their vision to improve the status quo through their Startups.
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?
I always say that on the hard days, we always go back to our why. I believe in what we do and how we improve temporary foreign workers’ financial conditions. Our initial traction and customer loyalty motivate us to pursue our mission.
I would recommend to founders to be convinced about their business idea, validate it, and have the patience and perseverance to accomplish it. Being an entrepreneur is a long journey that looks like a roller coaster. There are good and bad days, and you must always be aware of your customer’s needs, adapt, and pivot your initial proposal. It’s not an easy and smooth journey, and accomplishing your mission takes time.
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?
Being part of the 5th Ascension Cohort has been a fantastic experience for the LABORA team. The workshops, expert webinars, and one-on-one sessions have helped us refine and strengthen our value proposition, go deeper in showcasing our numbers and improve how we communicate the opportunities there are to scale our startup.
You're based in Vancouver, B.C, what have been some of the support you've received as a startup within the province's entrepreneurship ecosystem and how do you think B.C. (or Canada) can do better?
We discovered that in Vancouver, the Fintech ecosystem is limited. The entrepreneurial ecosystem is more focused on CleanTech, AgTech, IT, Gaming, etc. but close to none in Fintech. Fintech Cadence has been a great ally in reaching out to potential investors, experts, and mentors in the Fintech space.
I think that Canadian financial institutions should be more flexible and open to reaching out to potential customers who, inclusive in Canada, are out of the financial grid. It is unacceptable watching workers outside of grocery stores making a line with cash in hand to send money to their families back home and being charged high fees and poor exchange rates. Those workers put the food on our tables, and the financial system owes them an opportunity to improve their wealth.
Wrapping up 2022 what's been one of the biggest lessons you've learned you'll take with you in the new year?
To be resilient, patient, and persistent. Patience usually pays.