Santiago Molina On Raising $85 Million To Bridge The Trade Finance Gap In LATAM

Now on his second startup, Santiago Molina’s latest venture has raised tens of millions of dollars, to facilitate the movement of $90B in merchandise. His latest venture, FinKargo, has attracted funding from top-tier investors like Community Investment Management, ONEVC, Maya Capital, and Pear VC.

In this episode, you will learn:

• The impact Finkargo is having on international trade
• Santiago Molina’s advice for starting a business
• Funding your venture from outside of the US

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About Santiago Molina:

Santiago Molina began their career in 2006 as a Strategic Planning Intern at DDB. Santiago then moved to UBS in 2009, where they worked as a Research Analyst, assisting a Financial Advisor in reviewing, analyzing, and rebalancing investment portfolios worth over $30 million in assets.

In 2011, Santiago joined The Social Investment Bank (Banca de Inversión Social) as an Associate. In 2013, they began working at Teka Capital as a Senior Investment Analyst.

In 2014, Santiago Co-Founded and became a board member of Finamiga, leading it in its creation of an innovative asset-based microfinance lending model. In 2016, they Co-Founded and became a board member of FERVAL – Fertilizantes del Valle SAS.

In 2022, Santiago became a Mentor at Latitud. Most recently, in 2021, they Co-Founded and became CEO of FINKARGO, creating Latin America’s first supply chain platform for micro, small, and medium enterprises.

Santiago Molina attended Columbus School from 1994 to 2000, followed by Colegio Bolivar from 2000 to 2004, where they obtained their High School degree.

Santiago then went on to Houston Christian University – Archie W. Dunham College of Business from 2004 to 2009, where they obtained a Bachelor of Business Administration in Finance and Marketing.

Santiago then completed their education at Houston Christian University – Archie W. Dunham College of Business in 2010, obtaining a Master of Business Administration (MBA) in Finance.

Connect with Santiago Molina:

• Crunchbase
• Latitud
• TheOrg
• LinkedIn

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty hello everyone and welcome to the dealmakerr show. So I am very excited about the guest that we have today I mean he’s say build a few companies now and he’s definitely now on ah on the next one a rocket ship and we’re gonna be talking to about you know building in Latin America and all that good stuff. So I guess without further ado. Let’s welcome our guest to a santiago moina welcome to the show.

Santiago Molina: Me.

Santiago Molina: Thank you very much alejaro very honor to be here with you.

Alejandro Cremades: So sato you were born in Cali obviously you know you grew up there during a time of conflict. You know I’m sure he was not easy. Ah, but how was life growing up, give us a little if I walk through memory lane.

Santiago Molina: Perfect. Okay, so first of all, um I got lucky at at at Birth won the lottery whatboard to loving parents who prized dedication overall of all so I got to go to the best school in the city and and and they actually said.

Santiago Molina: Actually made an effort and it was a little bit above our means but they made it possible but going to to school and growing up in the 90 s in Colombia it. It was quite an experience because we grew up in the middle of a very violent um situation. Very violent environment. And very soon by the end of the 90 s we got a housing kick crisis one decade before the us had it and everything really went bust so we were in this very violent country with a lot of conflict. Seeing everything going wrong and that just builds gritin you that just builds you character and shows you that anything is possible and not until I left godi did I realized that what I was born in and what I grew up in wasn’t normal and. That same city was the one that built the founders of Lapi Shepet Adi all these guys were born in the same the same ah environment raised are around the same time and I think we owe our entrepreneurial spirit and our grid. That experience.

Alejandro Cremades: That’s incredible. No kidding I mean when you’re dealt with uncertainty then to certain degree you are able to ah be with uncertainty a little bit better now and I find that that’s what we need to embrace us entrepreneurs now in your case at 18 years old you know it sounds like you were a good kicking the ball. So. Kicking the ball. You know you were able to kick it far. You came to the us so tell us about that experience too.

Santiago Molina: So when I graduated high school I was fortunate enough to earn ah a full ride to play soccer in the us. So I took upon it and and moved to the us to get my college degree and and and play play soccer which was a really formidable experience and that. as as I say often athletics builds a discipline in you that very few things can and and now today I tend to hire athletes more than anything because I see I see what what it builds.

Alejandro Cremades: And what about Leadership. What did you learn about leadership from playing soccer especially you were on the defense side of things you know that’s like the last line before the um, you know the the player from the other team you know is’s going to be facing the Goalie and potentially making a goal. So. You were there. You know the last line of of the Battlefield. So So what did that teach you about leadership too.

Santiago Molina: Yeah I mean when you are when you’re the defense same as it happens with the Goalkeeper. You never get the Praise. You know you don’t get to celebrate the goals you make you’re only chastised if if you make mistakes so you always need to perform. But you never get the praise for what you do? So it’s it’s humbling and you learn to to play that way and lead that way.

Alejandro Cremades: Now in your case I mean you ended up helping out the um, the team of of the girls there a university and that allowed you to get your Mba as well. Ah, but in your case, you didn’t want to stay in the us what happened why did you move back to to Columbia.

Santiago Molina: Yeah, so so that that experience that was actually my first job assistant coach to the women’s soccer team and one of the beauties about that opportunity is that I got to work with women solely women teened fairly ah teenage adult women and I learned to lead. Motivate and get the most out of a women and I think that was a huge opportunity because it prepared me for being a leader later in life and then when I was graduating I I really wanted to come back to the region and and make an impact make a difference. So as soon as I graduated myba I decided to come back to the ah to Columbia and work in in investment banking impact investment banking actually.

Alejandro Cremades: And in fact, I mean before you went at it as an entrepreneur you did investment banking I say as you were alluding to and then you did private equity. But I think that one of the things that I see a lot is. People that come on the show is that they either have the consulting background the investment banking background or the investor background either on p or on Bc but in your case you have 2 of them. So I guess how do you think it has helped you later on you know now that you’re an entrepreneur. Investment banking of being able to perhaps see you know what separates good companies from bad companies and deals that end up you know going through or perhaps you know your experience to as an investor as a private equity investor where you develop pattern recognition. You know for identifying winners. Yeah.

Santiago Molina: Yeah, so investment banking is a wonderful school because it teaches you discipline. It gets you to see a lot of industries and find those drivers that make companies successful but in the end what you also realize is that the true stars of the shows are the. The entrepreneurs. The owners of the company that wants to build it. You’re there just for the transaction and that’s what got me in love with becoming one of them I wanted to be 1 of those guys we were advising because those were the real stars that built the business that we were now transacting. but but yeah that discipline and that that ability to look at the details and see what the drivers or businesses are make a huge difference when you when you go out to build your your own company. So.

Alejandro Cremades: So what? what? What were some of those things that they that you found you know and those companies that you were involved with you know whether when you were an investment banker or when you were an investor at the private Equity firm. What were some of the key trade trades that. You found like maybe like those the top 3 that you found from those that you know went on to do great things.

Santiago Molina: Okay, so I’d say the first one you start understanding cash cycles, cash conversion cycles understanding how how the money flows in the business and how much money you need to produce more money. Um, that’s probably the the main one. That not everybody understands the second one is scalability how much additional energy. You have to add to create something bigger and how replicable it can be that would be number 2 and number 3 is where are the efficiencies. What are the levers you can play with to find efficiencies in your business to optimize profitability which is the end game of a business now.

Alejandro Cremades: So While you are the private equity Firm. You know. Also it becomes more and more obvious that you still you still want to build your own business I mean you you were feeling that when you’re on the investment banking Side. You thought that going to the private equity Side. You know it would get you Closer. It would really feel. You know that gap that the that you that you had there for you but it sounds like it was not the case and eventually you know it’s time to take action. It’s time to take ownership of your own future and building something yourself so when when did that moment happen.

Santiago Molina: Totally So I I Want to get my hands dirty. You know I wanted to put my hands at the machine and get them greasy and start building stuff and and really make changes. So What really happened was I was starting to get involved very deep with one of our portfolio companies I started. I Tried to call some shots and they immediately stopped me and they were like no I mean you’re the associate at the private equity here. You don’t call the shots and that’s where I was no I want to be in the game I Want to be part of the game. That’s when I decided I had to quit and build my own.

Alejandro Cremades: So what happened next.

Santiago Molina: My own company but I quit right away without without a plan without an idea how like I’m just gonna force myself into building a company I started chatting with a good friend of mine from childhood who had complimentary backgrounds to mine and we said let’s let’s build a company and that’s how. Been Amigo Neos was born in 2013.

Alejandro Cremades: So what was the business model there of fi Amiga would either for the people that are listening to really get it.

Santiago Molina: Yeah, so we were always trying to find something that generated impact so we went after a microfinance institution trying to blend different underwriting methodologies to to bring access to financing to the and underback. Um. That’s what fi Amigo Newss does it. It. It’s ah it’s focusing financial inclusion lending money to those that are not underanked.

Alejandro Cremades: And you did that for about 8 years you guys raised you know quite a bit of money to in-depth I think it was like twenty five million bucks so how how do you? I mean I guess that that here you know you also learned about how to be effective when it comes to raising debt. You know there’s a lot of people right now on they on on listening to us that are more used to or more familiar with other forms of capital like perhaps equity right? What they? What people would raise from investors but how how why was the um, the depth side of things you know so. Um, helpful for you guys to to really build the operation and how should people think about debt capital.

Santiago Molina: Right? So for that capital. You need to see yourself just as an intermediary what you’re doing is finding a allocation for resources that can generate a higher return and then in the middle you’re in the middle taking a cut and transferring to the next part. In Order’s for that to Work. You have to be both efficient right? and you have to have a performing portfolio. The numbers need to add up so you’re basically paying with small playing with smaller margins and you need to be very careful with how you operate your business because you’re. There has to be enough space for you to make a profit for there to be a loss rate and for the investor to get their money back with their return. So it’s it’s It’s actually you you need more discipline in order for this to work and that’s ah the magic about about that.

Alejandro Cremades: And.

Santiago Molina: You have to have the numbers right? and you have to be very responsible with how you you manage that money.

Alejandro Cremades: I mean with fi Amiga what an impact over 35000 loans 5000 families. You know it’s just like absolutely incredible. The the impact that you guys had you know with finamiga would either so why did you switch gears here. I mean it sounds like you you guys were pushing. You know a really amazing operation. So what? what happened there I know that you received a phone call and that phone call changed. You know the course of action for you. But how how did that happen I mean. If you if I was to be pushing an operation like this There’s no way I would have gotten distracted so why did you feel the need for really taking that call seriously.

Santiago Molina: Yeah, so I’m a builder I like to build things ah Venamicgo was at a point where it was very profitable crawling aggressively but it already worked. Everything was already placed. We had a great management team. A great product. Everything was already. Working at was missing the adrenaline of building from scratch and and and and building solutions. So that’s when my cofounder thomasmas called me one day so he’s he’s an expert in in logistics. He he led mersk in Mexico and Central America the the largest shipping line in the world. That he started his own freightful water that outbreaks Columbia Mexico us China he calls me one day and he’s like Sani I need your help my clients are s and Bs in Colombia and in Mexico they’re doing import operations and nobody gives them financing to operate this their businesses. Is. The only thing they lack in order to be successful and almost like well that needs resonates with me let me let me let me look it up so I started researching came across the trade finance gap which is a ah very well documented case and realized that lat down needs approximately. Approximately three hundred and fifty billion dollars to fund that gap in the region for snb’s for importing usnb and and when I saw the number and the and the impact that we could build and how we could merge a a world of logistics with finance that it it hasn’t.

Santiago Molina: Been mixed very different worlds I said hey but I gotta jump with this I mean this is huge impact I can make and they can really make a difference for the region if I can get this to work.

Alejandro Cremades: And obviously that’s not ah, an easy jump because you had you know this other baby. You know that you had built for 8 years plus so how was that transition to make sure that you would leave people you know in a good place. And that you know you could also you know still be involved and and help out while at the same time you know you’re taking this massive in worry which is the end they were of of really building another thing from the ground up.

Santiago Molina: Right? So The the hardest part was breaking away with my cofounder I mean we built that company with our bare hands and built it from the ground up. But fortunately he he understood what drove me he understood the pastor that I had for building things. And he said I mean it’s it’s your dream I support you he knew I wouldn’t leave him behind I’m still a board member and and I speak with him often and help him in any way I can. But fortunately the the company was at a point where it was already mature and and it actually had and still has. The best reforming portfolio in the industry. So So it was it was in a in good shape to to leave behind.

Alejandro Cremades: So then let’s talk about fin cargo. So fin cargo you know comes to life you know now it’s a problem that you can’t get out of your head. You know you’re able to have this conversation with your cofounder. Ah, you leave things on a really high note and you’re even still involved now helping him out and and the company out and now fin cargo is in the mix. So so so for the people that are listening to really get it. What ended up being the business model of Finn Cargo how do you guys make money.

Santiago Molina: Right? So withmas what we realized it is that we had 2 very different worlds very distant worlds. You had the finance industry and you have the logistics industry and whenever you’re shipping goods you have goods going one way and money flowing the other way so they’re part. Of a transaction but you play it all out through different channels. So what I told Toma is if we’re going to build this. We need First of all somebody that is capable of bringing these 2 worlds into a single platform and having them interact and transact in a single place. We brought on our third cofounder Andres who’s who’s been doing turnarounds in tech companies for the past twenty years he’s got 2 exits under his belt um brought him on board and between the 3 of us what wevisioned was a platform where ah.

Santiago Molina: Emerging Market as a beast can transact in a single place where they can control their supply chain. They can have visibility they can hire the different services but they can all manage everything through one single dashboard all with embedded financing. So that not only can they trade control contract but they can finance their whole operation because 90% of International trade is financed so without access to fincing you’re doomed and that’s the case in Latin and that’s what we’re out to solve.

Alejandro Cremades: So typically on ah on ah on a business like this I mean it’s a how do you think about like for example, like the the biggest problem that you’ve seen you know and really building this company I mean what would you say has been especially at the beginning. What really kept you up at night because it sounds like a complex business to really put together when it comes to you know trade when it comes to commerce I mean all of those different things blending in so what kept you up at night, especially during the early days

Santiago Molina: The hardest part was mixing really strict square world like finance where everything is set. Everything is built. Everything is really standardized with a very volatile world like his logistics where you have. Ah, lot of moving parts and you have delays and changes in time in timings constantly It’s highly unpredictable and highly volatile so developing a financial product that can adjust to the necessities of of logistics and having the world of logistics up. Blend and adapt to the finance world was the biggest challenge and the only way to do to do that was through technology by allowing these 2 worlds to live in a single platform and being able to connect both so that there’s a marginal error of error on both and they can live within that margin of error. So. So that was the biggest challenge that that was what kept us up at night for the first for for the past two years we’ve been around for a little bit less than 2 years but we finally managed to crack it and that explained why why why? it’s it’s moving. So.

Alejandro Cremades: And also you guys have been booming too when it comes to the employee count How many people do you guys have now in the company I mean that’s a lot of people in such a short period of time. How did you go about onboarding people.

Santiago Molina: We’re at 78

Alejandro Cremades: You know I’m making sure that the culture wouldn’t break.

Santiago Molina: And that was that was one of the beauties cultural wise so we had to bring in experts in logistics experts in finance export experts in effects experts international trade. So when you blend all these worlds together. what what happens magically is that all egos disappear because everybody realizes they don’t know anything about the other worlds. So first first off you have no stars you have no shining stars. Everybody’s humbled because they’re in the learning process. That’s where the magic starts to happen because as everybody’s learning. They’re starting to share their experiences and their knowledge and you start putting them together to to basically bring to life a whole new world of opportunities. Um, and that’s been part of the magic within in cargo that. Nobody knows everything so everybody’s chipping in their part of wisdom.

Alejandro Cremades: And in terms of capital. How much capital have you guys raised to date you know into in-depth and equity for the operation.

Santiago Molina: So we raised our seven point five million dollars round in January of 2022 which that really pushed us to to grow scale throughout the year and then we closed on a $75000000 credit facility in September. And start operating in in October. So adding both up that’s eighty four point five million

Alejandro Cremades: And also you know like 1 thing that that comes to mind here is you were able to land incredible vcs I mean you have pair Bc you have fly bridge I mean those are not people from. Mexico or Colombia I mean we’re talking about some of the biggest names in the Vc world especially out of the Us. So being in latin america how do you go about I mean I’m sure that there’s a lot of people that are right now tuning in and and listening and and I’m and they’re wondering to hey I’m outside of the us how how can I also. You know, learn here from the experience of santiago how did he do it. How were you able to land these people from the us.

Santiago Molina: So ah, first of all the the beauty bot what we’re building is that we’re global from day one when you’re doing international trade. You’re global from day one. So we’ve actually connected Latan to 39 countries around the world in 6 continents and so. That really brought brought the attention of investors because they saw we were solving a real problem that has global impact because the same problem we’re solving in right now in operations in Colombia Mexico can be applied to the Middle. East can be applied to Southeast Asia so the the investors understood that we were solving a global problem started started with Latan and second we were lucky enough where we managed to put together a team of investors that covered everything that we needed so we needed our fintech global fintech focus fund and we got won up. Lead around and then we needed a Sas specialized fund. That’s where we brought fly bridge in and and and they have just amazing experience running saas products and then we eventually we want to go into Brazil so we brought on board maga and 1 vc. And we had also the ah the the support of pair Vc that has great experience as well building companies from from the c stage up. So so we got really lucky got to pick the best of the best.

Alejandro Cremades: So when you say support you know everyone really wants an investor that is supportive an active investor right? An investor that is able to add Value. What does support look like because obviously when when we’re hearing you hear you know mentioning it. I mean it sounds and it looks like you really know and see on a daily basis. What that support looks like from your investor. So How do you use that support. What How how that support really pushes you farther.

Santiago Molina: Totally so support comes in many ways it can come be in forms of Intros to other players that can add value into what you’re doing support comes in the in the form of experience. Because they’ve seen a lot of deals come through and they’ve seen the way a lot of companies work. So For example at the fintech side they can help you with crossborder payments and how to optimize for that. How to optimize for funding how to optimize for infrastructure How to optimize for hiring because still they’ve seen so many companies. They know a lot about it. They it can also come in the form of establishing operations or hiring because they’re on the ground that they know the market where they’re in or it even comes in the the form of what you prioritize to build. Knowing exactly what will allow you to have a solid base to grow upon so support comes in many ways experience being one connections network and and and knowledge.

Alejandro Cremades: So now imagine you go to sleep tonight Santiago and you wake up in a world where the vision of incargo is fully realized what does that world look like.

Santiago Molina: This is a world where s and bs in emerging markets can connect across border and buy from anyone in the world having full visibility and control of their entire supply chain in one single dashboard. That’s 1 place. Or the entire supply chain.

Alejandro Cremades: And I mean that’s that that that that looks like an absolutely beautiful World. So I’m I’m wondering here you know as you’re thinking too about you know how to how to get there. You know Obviously you know you have those different lifecycles of as a company. And some of the things that you need to break through you know in order to get you there So How are you guys thinking about you know the company maturing from one cycle to the next and how are you guys preparing yourselves to be able to achieve you know those say those growth. Ah you know Shifts. You know, ah you know, powerful way.

Santiago Molina: It it all comes comes down to building a strong base. You need to make sure your foundations are strong enough. We’ve built a very strong foundation on the wall. Building the rails for these international trade transactions to work and having logistics and finance blend together. The biggest pain point of our clients is access to financing so we had to solve that first and the way I I tell it is I see as the barge you have to make sure the barge floats and once you have. Your barge floating you can put on top all the other services in in in revenue streams and operations you need. But first you need that barge to flow and we’ve really focused that on that and that was’s what speaks wonder of what we’re building. We’ve we’ve done over $90,000,000,000 worth of financing of merchandise. And have let a 1 % default rate because we built that barge to work now on top of that once we’ve solved the problem for these s and b to trade internationally now they can start contracting all the rest of the services to us and transsecting to a platform that just makes their life easier.

Alejandro Cremades: And I guess you know like a lot time. Obviously you know you you’ve had your your experience with the us. Not only you know, being here but then also with the investors that you have been able to land and latime was a little bit green when he came to the venture. You know world and to being able to have the access to the tools and resources I know that it has been. You know, changing and developing but is it getting easier to to be an entrepreneur there.

Santiago Molina: So ladown has gone a long way from in the past I I’d take 3 years the past three years latime has gone long way with we’ve all benefited from the success of the earlier unicorns that that roses in the region. So now you have you see more interest in startups more people wanting to bet baker want to build things want to find solutions. So both on the side of talent you have people with better experience that that that just starts permeating into the whole industry and investors from outside of of the region. Now see that success as possible in the region. Want a bet on it. So so it’s it’s evolving very much so and that us works I mean the us just works in latin there are so many things you have to fix that the opportunities are just endless.

Alejandro Cremades: Yeah, no I can totally get that. So so saniao if I was to put you into a time machine and I bring you back in time I bring you back in time to maybe that point when you were at the private equity firm super frustrated because you wanted to build you wanted to build you wanted to do something of your own. Imagine you were able to go back in time and have a sit down with that younger self and being able to give that younger self one piece of advice before launching a business. What would that be and why given what you know now.

Santiago Molina: I Tell him to take bigger risks to dream bigger and to fail faster.

Alejandro Cremades: I Love that That’s very profound now for the people that are listening that will love to reach out and say hi. What is the best way for them to do so amazing. Easy enough.

Santiago Molina: Better be on linked it.

Alejandro Cremades: But santiago thank you so much for being on the dealmaker show today. It has been an honor to have you with us.

Santiago Molina: Alandro The honor is mine. It’s been a wonderful experience. Thank you very much.

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