Adalberto Flores On Raising $300 Million To Allow 1 Million People To Buy Now And Pay Later For Products

Now on his second startup, Adalberto Flores is credited with building the fastest micro-financing platform in the LATAM region. The venture Kueski has attracted funding from top-tier financiers like StepStone Group, K50 Ventures, Victory Park Capital, and OnePrime Capital.

In this episode, you will learn:

• How Kueski works, and how fast they are growing
• His top advice before launching a business of your own
• Dealing with failure

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About Adalberto Flores:

Adalberto the CEO of Kueski, the fastest micro-lending service for Latin America. He is a seasoned executive with experience in the financial and software industries in both the USA and Latin America. Before Kueski, Adalberto started, grew, and managed all operations of Ooyala Mexico, the largest International division of Ooyala, Inc. Adalbertoopened two offices which grew to 29 employees in two different cities, encompassing software engineers, technical support, data science, sales, marketing, account management, HR, G&A, etc.

Prior to Ooyala, Adalberto was the co-founder and CEO of Inviko, a business referral engine. At Inviko, he was in charge of fundraising, general management, sales and marketing, public relations, and talent acquisition. While at Inviko, the company received several national and international awards including 1st place at the Mexico Intel Entrepreneurship Challenge.

Adalberto has worked for, collaborated with, and consulted on engineering, business, finance, and strategy for 20+ companies & institutions in China, Brazil, the USA, and Mexico. He can speak, read and write Chinese-Mandarin, Portuguese, English, and Spanish. He has a B.S. in Industrial Engineering and a minor in Systems Engineering from Monterrey Institute of Technology (ITESM).

Adalberto was awarded Mexico’s University Student of the Year for Finance by Ernst & Young and CNN-Expansion. He was also awarded the top prize in the E100 Mexico West Entrepreneurship Recognition (2012) and named the most outstanding Industrial & Systems Engineer alumni from Monterrey Institute of Technology (ITESM), Guadalajara, 2012. He was part of the initial founding team of SumaValley.mx, one of the largest entrepreneurial organizations in Mexico, and has been invited to several events including TEDx Zapopan.

Connect with Adalberto Flores:

• Crunchbase
• LinkedIn
• Twitter

Read the Full Transcription of the Interview:

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Alejandro: Hello everyone and welcome to the deal maker show. So today. We have a very exciting guest I guess that is’s really making it happen when it comes to fintech and in Latin America I think that we’re gonna be learning a lot of ah. The highs the lows of entrepreneurship and a super inspiring story as a whole. So I guess without further ado. Let’s welcome our guests today at Alberto Flores welcome to the show.

Adalberto Flores: Thank you, thank you very excited to be here Alejandro and thank you everybody to you know I’m I’m super excited to have this conversation with you. So ah, excited to be here.

Alejandro: So let’s do a little of our walk through memory lane at Alberto so tell us about life growing up in guAdalberto Flores:ahara in Mexico where you have tequila. You have a take you have mariachis I mean all the good stuff in in one single place.

Adalberto Flores: And yeah, absolutely so well how does the second largest city in Mexico in terms of population. Um, and it it was historically a very commercial city. But um, you know the kila was actually we have the um you know. Ah, you know a bunch of ahgaves in the region and then tequila was actually invented in the region and all around that you know well how is the capital of Halisko Helisko state and then I would say Jaisko and all the surrounding states are kind of like where you know like one hundredth of percent of tequila actually being made. um and um and I think it’s it’s a really interesting combination. So it’s ah it’s a city that’s ah that was traditionally more conservative. Um, and um, but the new generation is significantly much more disruptive. Um, you know people living in guahara starting to. Travel out you know and to other places of a world and live with other cultures and I think that the cultural shock between you know, young people living in guajara and older people is is much higher than or much bigger than other cultural shocks typically generational shocks and um, it’s a beautiful city. Phenomenal wetter. We have the largest lake in Mexico called the lake of chapalla just ah, you know like 1 hour driving distance and um, it’s interesting because it always rains a lot. It’s ah and when it rains it really really rains. It feels kind of like a small hurricane when it rains so there’s a lot of vegetation. um and um in in I think it’s a beautiful city I every time I’ve been living in another parts of a world but every time I I I feel that I’m I want to go home and eat some tacos and. And ourvocadoes and all the chilaquiles and all of the mexican food that we have in Gualhara. Yeah.

Alejandro: Ah, ah, amazing tagos el pastor I love it. So so now now let me ask you this because for you I mean you’ve been exposed to different cultures and you were exposed to chinese and in China and Mandarin that you were learning to. Also you went to Brazil as well. So how do you think that that all these different cultures have shaped you and the way that you really you know, look at things.

Adalberto Flores: It? Yeah absolutely so it’s a good questions so I would say um so specifically so I was living and in in Shanghai I I was starting my bachelor’s in mandaring. Um, and I think number one it it makes you feel more humble because um. I remember when I was going to China I was telling people hey I’m from mexico they were like oh Mexico yeah that country I think they play football right? and that was the only thing they they knew about about Mexico so when I was living in Mexico I felt Mexico such a huge country It’s like the you know the top 15 economy in the world and things like that in the. And people in China didn’t really recognize about Mexico so and then I would say you know it was essential interesting because my um, my chinese glasses in Mexico were actually taught in spanish so they would say in spanish show. this is how you say hello and this is how you say doctor and things like that. Um. But in China my classes were actually taught in chinese and um in and um, you know I was ah all of my my classmates were actually you know Japanese Korean Indonesian and boy they were so smart I remember I was um when we started the class. Um. You know I had I was you know I was a student that had the longest period of time studying mandering I’ve been studying it for one and a half years at that point of time and the rest of my my classmates were kind of I’ve studied mandering like one month or a couple of months the longest 1 was six months and I’m like hey guys I’m gonna teach you classes you know and the reality is that was totally the opposite I was ah the the less. Um, you know, um, you know the the worst student in my chinese classes. They were so interesting. Um, but um. I think that um, what’s interesting about the chinese culture I would say it’s number one semiennial cultural so they’re really really proud about their culture and it’s such a long culture. Um China and chinese is known to be 1 of the one of the 3 civilizations that that invented writing from scratch. So one is mesopotamia. The second one is Mesamerica um, and then the third one is is is China and the chinese characters. Um, and you can see the evolution of the chinese characters. How did they evolve from from the core. Um. Um, you know, like very old traditional writings until the modern chinese chinese simplified chinese and um, it’s very logical in some aspects and it’s it’s ah you can. Um once you once you know how to write some you know like let’s say like ah.

Adalberto Flores: Ah, couple of thousand characters. You kind of like start recognizing the logic between what does each character mean and things like that and um, it’s very logical. It’s very pragmatic, very similar to people in china they’re very logical and pragmatic. Um in in. And the the way people express themselves is ah much more much It’s very different from the way people could express a feeling in in um, in spanish for example, so so um you know I would say spanish is a more. Romantic language if I can say it this way in which there’s so many ways you can express viewings and and and chinese chinese is a much more logical language in which you you can express more practical things. Um, so that was definitely one aspect and then the other one was you know like um I was able to. You know to spend time with people from Japan from Korea from China loved every every one of them and 1 thing that I noticed is that people in Mexico typically are really focused on relationships on family and relationships. It’s really really important. Um, and um. And people in China were were a little bit much more focused on the work and on self improvement and in in you know, learning more stuff and and and growing professionally they did have some strong. Ah, focus on their family, especially with their parents. Um, you know, many of the folks over there are are their single childs. But yeah, so even that kind of a guy I would say like what people value their values are significantly different in China it’s more around. Knowledge about them around. Um you know work in in professional development and in Mexico’ ‘ a little bit more around family and ah and and relationships and friends.

Alejandro: So then let’s talk about valuing because in your case you know you did a little of ah of testing the waters with maybe corporate internships. But then you ended up building your first company your first baby in bio. And what I want to ask you here is obviously inbikov. You know it’s a it’s as they say you either succeed or you learn and in this case, you learned a lot and and tell us about like how did you you know really get started with embio I mean how how did you ended up saying you know what? I’m gonna go out it because. Mexico the culture is also very different I mean in Mexico is is either. You become a lawyer or you become a banker right? I mean becoming ah an entrepreneur now. Maybe it’s a little bit more accepted but before back then people were like what the hell are you doing? No so. So how did you come up, you know with the idea of Embico and why did you decide. It was a good idea to go at it.

Adalberto Flores: so yeah so that’s a good question so so um so here’s how I started so I told my sister who used to be an ah hr manager at the um at the at the at the software company in Gualhara. And I told her hey I want to start a company and and and you work at a software company. So can you introduce me to a programmer an engineer a software engineer with whom I can actually start my own company right? and she’s like yeah so I know this guy he’s um. His name is Vidal Gonzalez and and he’s he’s the one that actually had the highest iq in the company but at the same time he’s his personality is very entrepreneurial and I know he kind of like wants to find he wants to start a company so I’m going to introduce you. And and and then you can decide if you want to start a company together. So that’s what you did so I got introduced to him by email and we were able to sit down on a Starbucks um, a couple of blocks that’s out of his office and it was interesting because. Kind of like proposed him to be my founder that specific day just you know immediately after I met him and it’s funny because you know like when when you find when you’re starting a company with somebody. It’s you’re like you’re spending like 80% of your time with that person you spend more time with. Your founder or your founders than with your wife or your husband because ah you know you’re just totally focused on that and um and when you want to get married. You typically don’t go to a bar and say hey I want to get married. Do you want to marry me and and and then. Let’s have kids and things like no, you typically develop that relationship you you typically get introduced. You typically quote on dating and then gets formal and then you end up getting married but in in in with vial It’s kind of like it was I really really went on fast track and said hey vial. Just met you a couple of minutes my sister speaks fantastic about you I wouldn’t start a company with you. Can you resign your job right now and let’s start a company together and I have a couple of ideas and and envico was the original idea and we just need to raise you know funding. Is the way it works you just you know there’s something. There’s a term called you know venture capital so we raise capital we pay ourselves a salary with the capital and and we hire people and then we grow and we grow and then eventually we either get acquired or we ipo like that was my pitch.

Adalberto Flores: And interesting enough beal said like yeah let’s do that right? like ah so it was funny that he he you know he just met me just a few minutes ago and he was willing to quit his job and and and join me to to start this company so obviously vial is very entrepreneurial. Um, and um and we we had a couple of ideas that we could actually discuss. And um and we ended up with an idea which was the original idea of invico which I do believe it’s actually an us an awesome idea I still believe it was a great idea which is basically we we wanted to build a marketplace in which um individuals could actually ask. Other people within the marketplace to help them with something they need to help on. So for example, a I need to recruit an engineer I’m going to be posting a bounty if you help me recruit an engineer hey I need to meet this person I need to sell my car I need to do something. So it’s come at ah a marketplace in which you can ask people for favors and you can pay with a bounty if people help you out and um I think it’s a great I think it was a great idea to be honest, um, there are some sort of like summer companies that are currently right now and. And specifically you know focused on specific verticals. But I think it was a great idea and and so so we we ended up. Um, you know we ended up raising capital from a few folks. Um. 

Alejandro: So what happened what happened why didn’t work out.

Adalberto Flores: We at the end. It seems like the relationship with those investors didn’t turn out to the well we ended up you know we we only raised like $10,000 um, we were earning out of cash. Um, and then there was this um, um, there was this price that was called a. You know the intel entrepreneurship challenge and they we’ gonna giving they were gonna be giving us some you know prices sixs from $5000 to $25000 and we were like oh shit we should definitely try to win that because that’s gonna help us life. That’s gonna help us live a little bit more right? and um, and and it was funny because we. We we we were the finalists in mexico um, and we had to win the first price in mexico to go and compete in the latin america like intel challenge and we went to the you know to the local incubator and we pitched them one day before the. The the the tournament if I can hit this way and they totally destroyed us and this ah you’re not pitching. You’re not engaging. You’re not explaining well you’re doing everything wrong. So what I did is like before we went and over like so we were in in gualahara and we had to move to mexico city to ah to pitch to do the final pitch and and they and the judges were going to decide who was gonna be winning and I ended up saying like let’s let’s you know I went to I went to google to youtube and said you know presentation skills. Um, you know after steve jobs like deep jobs presentation skills. That’s what I googled or what I did in and youtube and it was interesting because you know there were very simple things that you had to do so it said basically it said all of your presentations have to have images one image. You know you want to have either. A blank like a white background or a dark background. You know, almost no words and at the end of the presentation you need to say something that’s gonna leave the audience impressed. So you say something press and then you say that’s and that’s amazing or. That’s fantastic, right? Or that’s marvelous. So it’s interesting because next day I said I totally rewrote the pitch using these techniques with you know, pictures almost no words and saying fantastic and it was funny because I was pitching investors. And I said oh bit in vico this is what you can do you can monetize your connections and your context that is amazing and then I had to pause and see the judges and they were paying actually paying a lot of attention and my friends were like yeah yeah, that’s how you need to do it right? Um, so.

Adalberto Flores: So I started I actually pitched the the idea similar to how Steve Jobs used to pitch his his ideas and fast forward. We got we got the first price. Um, thanks thanks to Steve Jobs rest in peace we we. We ended up winning the the the third place in Latin America we got I think like $5,000 um, and um, there was this um we met 1 of our advisors which is that it was one of the early google employees. Um, they call them the the google learners because they they made a lot of money with their stocks with their pre ipo stocks with google and he said hey why don’t you join the company. Our company. It’s called uyaa you you can learn about how to build teams technology. How to raise capital how to have a board and unique and and if you want you can stay here for a couple of years you can commit for a couple of years and if you want to continue to be in the company you can stay or if you still want to build another company. You can leave but you’re going to learn to a hell lot of things. From really top talent and and silicon you know in silicon valley and so we decided to join um that company which is whola um, and and we opened the offices of vila in mexico and it was pretty much our own startup and we len up. Bunch of stuff from really really smart people. So that’s how that’s how things ended from that company.

Alejandro: So then as they say once an entrepreneur always an entrepreneur at what point does the idea of quisy which is your latest baby and a smashing hit at what point you know that that idea really comes to to mind here.

Adalberto Flores: Yeah, um, so so basically exact so I made a commitment with pissmark which is one of the founders of who alla he said you need to be in the company at least 2 years That’s your commitment It’s a verbal commitment. It’s ah it’s a gentleman’s commitment if I can say it this way. And um, exactly on the on the year two I told des marquet I do want to leave the company and I have a few ideas and essentially what I did is I I um I invited a group of friends that were founders and I told them. Hey I want to start a company and I don’t know what idea do I want to focus on so what I’m gonna be doing is on every single day or every couple of days I’m gonna think about a business idea and you’re gonna be getting an email a group email informing you about the idea the value proposition and the pitch. It was just ones short email and if you can reply to all saying what do you think about the idea and the pitch and the feedback that will be phenomenal, right? like that would that. So I did that and I think I wrote like about 60 ideas or something like that or or 40 ideas I don’t know how many and um and they were giving me a lot of feedback and um I think I think there was a lola palusa Lula Palusa type of effect in which i. I wrote a couple of ideas related to improving access to financing in Mexico and I was actually seeing how there was just such a lack of access to financing in Mexico and how difficult and painful was it to have access to financial services in Mexico. Um. You know, essentially what happened this? My I remember my my father you know decades ago. He told me how he cut rejected on. You know he wanted to have a credit card. He cut you rejected and he needed that credit card for their business and um, you know and. And and it was a good business but he got traracted so decades after he still remembers why he got rejected so so it was a very emotional aspect for him and then um, you know my co-founder didn’t have a credit card. You know it was very difficult for me to have a credit card and then my credit agreement was really low. And to be honest, even right now like I wanted to I wanted to you know, just a couple of days ago I wanted I went to the bank because I wanted to get a check um a physical check I had I haven’t written a physical check like in 10 years and and I wanted to cancel my bank account and I wanted to.

Adalberto Flores: Get my new credit card and I spent one and a half hours in the bank and I I had and none of them got like I didn’t get my check I didn’t got my credit card and I and I couldn’t close my bank account so I was um, you know like I think I was so frustrated back then and even too very. About the how how can we significantly improve access to financial services in Mexico using technology and using Ai and machine learning that I you know we decided to start the company.

Alejandro: So what is the business model of Queski for the people that are listening to get it. How do you guys make.

Adalberto Flores:  Yeah, so yeah, so we have 3 different products. Um the the first one is um, you know or the largest one is a buyator product so you can go to it’s and and it’s ah it’s an online and it’s an offline. Or an instore by nowator product. So you go into the checkout of ah of of a site in which you want to buy something and you select this type of payment system and essentially it splits your payment in 4 and then and so you can pay it in 4 and um, and and you’ll pay no interest rate. So for example, if you want to buy something for $100 you use queskibay and you can pay in 4 installments of $25 no interest rate. So that’s one and then you can do the same thing physically but you just need to scan a secure code. Get it approved and then you can walk out what what outside of a store with with things that you want to buy so. It’s a by now player product and that interesting thing of what we do is that we’re not forcing people to have a bank account um in in in in mix and I think I think that’s real. That’s ah, that’s actually very relevant in mexico because most of the people in mexico do not have a bank account and the vast minority of people in mexico do not have a credit card so we’re not forcing people to have a bank account. We’re not forcing people to have a credit history and what we do is we use? Um, we have a team. Of more than 60 people working you know building the credit technologies that we have so that we can understand you know you know people’s profiles and and and and and and be really good on assessing assessing. Who’s subject to a credit or who’s not right then and we’ve analyzed a bunch of stuff where you know we know how people type if they type extremely fast. They tend to be fraud when they are filling out the questionnaire if they type slow they they’re not fraud but they typically have a lower credit capacity. And if they type fast but not extremely fast. They tend to be really good customers. So essentially what we did is what we do is we analyze thousands of data sources and we can decide in a matter of seconds who’s subject for a credit and who’s not subject for a credit so that’s one product that’s a bino plato product the second one is ah is a direct lending product as well. So people can go into the website to the mobile app they can request the loan they fill out the questionnaire in a couple of minutes and they receive it directly to their bank account. Um, and then the third one this is more kind of like in an r and d mode. But basically it’s the salary at bench product. So we connect to the payrolls of of of of ah.

Adalberto Flores: Of of companies and we can offer their employees a salary advance for free. We’re not charging a fee. It’s it’s ah it’s free and and people can get access to liquidity through their own earned wage advance so or earned earn Salary. So Those are three models.

Alejandro: So in this case, how much capital have you guys raised today. How have you guys thought about capitalizing here of the business.

Adalberto Flores: So we’ve raised the several rounds um in equity and all the rounds and equity and debt rounds. We’ve raised more than $300,000,000 no

Alejandro: Okay, and then how thus like a business like this when you were thinking about racing on the equity side or on the di side like because obviously the deb side you need it for the operational structure and then the equity side is more like to build the actual business. So How do you?? How do you really go about you know. Pushing both and.

Adalberto Flores: Yeah, absolutely so the equity for so for the equity capital. We’re typically using it to you know to do um I would say you know mini opex operating expenses you know salaries marketing expenses you know office. Ah, you know, ah rent and you know engineering r and d etc and and for the so it goes more for the p and l like if I can say it this way or if it you can you see it reflected all around those financial statements but you seem spend most of it in the p and l and um. On the contrary. The debt capital is is ah is ah is ah is um is is a loan that you take so you can grow your loan book with that capital as opposed to using your equity because your equity is your most expensive capital that you have. Equity is expensive and but if you get if you can get that and you can start financing most of your loans with that. that’s less lease ah that’s less expensive um and and essentially you see that in your balance sheet and that’s where you see or what I mean that’s where you see it reflected because you draw from your credit facility. And you increase, um you know your debt from 1 perspective and you increase your assets from the portfolio perspective. So that’s how we we manage it so so basically it’s ah you know it’s focused on growing on growing the portfolio with ah with the credit facility that we have

Alejandro: And how big is quesky today you know anything that you can share in terms of numbers or employees or anything that you feel comfortable with.

Adalberto Flores: Yeah, absolutely so so we’re we’re almost 700 employees most of them are in Mexico we have been people in South America United States and and Europe um, we’ve done more than 6,000,000 loans ah, we’ve lent like about 100,000,0000 or more than $1000000000 through a platform. Ah we have ah more than 1000000 unique customers that that’ve been using our product. Um, yeah, and the I think those sort of the numbers I mean numbers that they have top of mind and and and and. And in the the and the buy now palator product has gone just like off of the roof ah depending on how you met like when do you measure it and things like that. It’s just like it doubles every every you know it doubles every just every every few months.

Alejandro: So wow now. Very interesting here. Obviously what you’ve done but you know definitely it has come with a lot of lessons and if I was to put you into a time machine and I brought you back in time and I brought you back to that time where you were thinking about maybe starting a company. Right? before your even even before your sister made the introduction to this colleague that she had if you could sit down that day that alberto and and have a chat with your younger self and. Share 1 piece of advice before launching a business. What would that be and why given what you know now.

Adalberto Flores: Um, I would say what 1 of my favorite investors in quesky told me once which is basically um, learn. Learn about the culture of successful people like people have successful people have cultures. There. They have an incredibly strong work ethic. Um, they are um, learning machines they can. They can surround themselves with very successful people. Um, they have they can. They also have a lot of you know weaknesses. They also have fears and how do they manage those fears and how do they manage those weaknesses. I think that’s the most difficult thing to learn and the rest is just very easy to learn like you can code if you want to code you can just go to a coding school or you can learn yourself how to teach yourself how to code or ask a friend how to code and you can code you can learn math. You can learn accounting. You can learn finance. You can learn marketing. There’s all of things you can learn and and and that’s very easy. But how do you build the culture of success and how do you deal with problems and challenges under stress. Um. In which you need to take decisions in a matter of you know minutes and you need to know who to call to and and you need to know how to put your values in front of everything else. No matter what I think that’s just very very difficult to learn. And if you are fortunate and every time you see somebody. That’s successful. Try to learn that from those successful people because if you can mimic those um you know that culture and you can apply that to your own self and and apply whatever works for you. That’s going to give you such a strong competitive advantage right.

Alejandro: I Love it. So I’ll alert the for the people that are listening. What is the best way for them to reach out and say hi.

Adalberto Flores: So um, oh so I think you can reach out to me through Twitter um, ah like I’m definitely available on Twitter um, I’m available on email that I can send over your you my email so you can share with us with a with of a folks. And and Instagram and yeah and and Linkedin so um, you know would love to connect and and and and and and engage with anybody that wants to reach out to me.

Alejandro: Amazing! Well hey, thank you? So so much Alberta for being on the dealmakerr show. It has been an honor to have you with all of us.

Adalberto Flores: Thanks! Thank you so much. Thank you Alejandro and it was great being here and thanks for an invitation. Thank you.

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