October 11, 2016
We are excited to announce that iugu, a financial infrastructure in the cloud that allows companies to be more efficient by automating the entire financial workflow, from receiving money from customers to the payments to suppliers will be a Gold Sponsor for the first Intercontinental Virtual +Live product discussion Product is a Universal Language . The event will be held in Sao Paulo's Ace Campus and New York's Pivotal Labs We caught up with iugu's founder Patrick Negri for an exclusive interview.
Tell us a little about yourself and your background
My journey as an entrepreneur began 19 years ago when I built my first business: a metasearch engine called TAY. It was a pre-Google era. TAY helped thousands of companies to place their websites on search engines listings. At the time, there were about 80 search engines in Brazil, and doing SEO was mostly submitting a website to the maximum number of search engines you could.
My background is mostly technical, focused on large-scale services and information crawling. From 2005 onwards, I realized that, in order to be an entrepreneur, I needed to work on my weaker areas, so I started to improve my knowledge on marketing, human resources, management and finance.
What is iugu? How did iugu come to life? What was the initial problem you were trying to solve?
iugu means "to bind together". The initial concept circled around building services that would help companies to grow faster. But our first product wasn't related to finance – we were trying to create a helpdesk solution like Zendesk. While talking to other startups, we found out a huge gap related to financial services for SaaS and marketplace companies and stood up to solve that problem.
Tell us about the concept behind 'tokens'
Tokens are a simple way to store information somewhere else, outside your own server, so you don't need to worry about security. It can be used to store anything, from customer information to subscriptions. At iugu, they began storing credit cards.
We allow companies to securely store credit card information in our vaults by making a token out of it. The token is linked to an iugu account, so only the account's owner is allowed to charge it. The credit card information never gets out of the vault, and that guarantees security to the company that uses tokens to charge their customers.
Fintech is becoming a popular theme across Latin America, as one of the first fintech companies how does this new boom effect you?
My goal is to build a solid business that can last 50 years or more. I don't like that the theme is becoming popular because it put us too much under the spotlight. It surely helps with funding, though.
How do you see the fintech space evolving?
I believe a lot will change in the next two years. Companies will become much more efficient thanks to these new services.
Why did you decide to contribute to open source? How has this effected iugu business and brand?
We always enjoyed how open source in other countries helps companies to grow faster. This isn't very common in Latin America, so we decided to share business components unrelated to our core business that would be useful to other companies. I believe these components helped us grow our brand, and I am happy to know some businesses that aren't iugu customers use these components.
How do your tools help local businesses? Can you share a few cases? How has iugu solution helped companies manage their churn rate? Can you share some examples?
iugu began solving the issue of recurring payments, but we realized that the problem in Brazil was its current financial system. So we started to get each financial service that was used and created new versions of them.
We allow companies to be more efficient because they can use iugu like a cloud provider (AWS/Azure/GCS) to handle their entire financial workflow: receiving payments, doing the accounting, selling receivables, paying third parties. I like to call us a financial infrastructure in the cloud.
On reducing churn, iugu has an integrated business intelligence tool that allows our customers to analyze their data in real time with the state-of-the-art metrics that are used worldwide.
What are the biggest challenges you have faced? How did you overcome them?
Our biggest challenges were related to Brazil's bureaucracy. Starting a fintech in such a regulated market is though. As time went by, we learned those challenges were also an opportunity, so we made them a competitive advantage. We keep fighting the difficulties of our financial system and offering better solutions to problems that have been around us for years, except no other company had the courage to fight them.
How has the current economic crisis effected iugu?
As our revenue is based on a percentage of other startups' revenue, and their growth slowed down a bit, the current crises forced us to be more active in sales.
What is the best advice you have ever received and why?
It was about having more time than I believed I had. When you are creating a business, you have a sense of urgency that isn't true in most cases. I keep remembering myself that building a business is like running a marathon, not a sprint.