Devengo
Looking for gold among the ashes
Aitor García Rey - @_aitor – aitor.is
Slide 2
Slide 2 text
2019
In Spain, almost 6 out of 10 people
fail to save ANYTHING each month.
(5 years later is still +44%)
Source: “Las pensiones y los hábitos de ahorro en España", October 2014 & November 2021, BBVA
Slide 3
Slide 3 text
Dissaving
2005 2008 2011 2014
0
10
20
30
40
50
32.5
30.7
34.5
29.3
Source: ”Economic and material wellbeing”, October 2018, The Social Observatory of La Caixa Foundation.
% of people who live in households whose expenses
exceed their income
Slide 4
Slide 4 text
Over-indebtedness
2005 2008 2011 2014
0
5
10
15
20
5.8
9.5
8.5
7.8
Source: ”Economic and material wellbeing”, October 2018, The Social Observatory of La Caixa Foundation.
% of people who live in over-indebted households
(spending +40% of their income on repaying debts)
Slide 5
Slide 5 text
LechazoConf 02024 5
How do people deal with debt?
* Friends & Family
* Micro-loans with outrageous interest rates
* Revolving cards
* Public subsidies & social programs
Slide 6
Slide 6 text
Salary Advance
Providing liquidity to workers by
leveraging their own earned wages
as source of funds.
Slide 7
Slide 7 text
LechazoConf 02024 7
Why were advances not being used?
* Obsolete payment flows
* Complex authorization processes
* Shaming culture
* “Unwritten” company rules
Slide 8
Slide 8 text
LechazoConf 02024 8
Our value proposition
* Real-time payments, 24×7×365
* 100% process automated process
* Private, software mediated requests
* Available for free to all workers
LechazoConf 02024 10
Sounds like a plan!
* July 21, 2019 – Initial commit!
* December 28, 2019 – iOS and Android apps approved.
* January 2020 - Onboarding first customers
* And then…
Lesson Three
Playing in a space subject to
multiple regulated markets is a
recipe for suffering.
Slide 19
Slide 19 text
LechazoConf 02024 19
Follow the money
* We wanted zero disruption of cashflow for our
customers
* Funded the advances when our own capital
* Recover the funds (+ service fees) at the end of
the month
* More success meant more fund sourcing problems
Slide 20
Slide 20 text
Lesson Four
Working capital-intensive business
models are constantly worsening
traps.
Lesson Five
Enterprise customers have massive
gravitational pull and can easily
transform you into a consultancy.
Slide 24
Slide 24 text
LechazoConf 02024 24
A reflection moment
* Spent 2 years building the product…
½
* …just to discover that it took us in the wrong
direction.
* We were doing all the heavy lifting in multiple
fronts (banking, labor & privacy)…
* …and deploying it (too early) in a very narrow
niche.
Slide 25
Slide 25 text
LechazoConf 02024 25
Time for a change!
* Pivoted to Payments Provider on 2022 Q2
* Providing infrastructure to build upon
* Harder challenges, more scalability
* Special focus on EU and Instant/Real-time A2A
payments.
Slide 26
Slide 26 text
LechazoConf 02024 26
Pivoting
* “Changing the engines while flying the plane”
* Wearing our customers’ shoes
* Much more work than simply “starting again”
* Finishing the process THIS summer
Slide 27
Slide 27 text
Lesson Six
Pivoting is hard but it can truly
be an opportunity. Do NOT burn
bridges.
Slide 28
Slide 28 text
LechazoConf 02024 28
Promising signals
* Moving a promising numbers:
* Volume: Hundreds of thousands of transfers per
month
* Value: Dozens of million euros.
* We are getting a PI license by Bank of Spain this
summer after +2 years of process.
* Doing it with a tiny team (7 tech members).