Sergio Fogel On Building A $18 Billion Company To Enable Cross-Border Payments By Connecting Global Merchants To Emerging Markets

Sergio Fogel’s entrepreneurial journey is a testament to the power of adaptability, resilience, and innovation. Born in Uruguay and later traversing the world for education and business, Sergio has built and scaled multiple ventures.

The latest venture is dLocal, a fintech unicorn valued at $18 billion at its peak. It has attracted funding from top-tier investors like Alkeon Capital, General Atlantic, Tiger Global Management, and D1 Capital Partners.

In this episode, you will learn:

• Sergio’s passion for technology began with a Sinclair Spectrum, igniting a lifelong journey into computer science and entrepreneurship.
• Transitioning from deep tech to business, Sergio leveraged an MBA to bridge gaps and thrive in new roles, industries, and geographies.
• Age-diverse co-founders bring complementary strengths, combining experience with fresh energy and innovation for long-term success.
• Building solutions based on real customer needs was pivotal in launching ventures like AstroPay and dLocal.
• Sergio unlocked growth potential in underserved markets by focusing on overlooked regions and adapting to local challenges.
• Seeking investors who provide strategic support beyond capital can accelerate company growth and ensure sustainability.
• As businesses grow, implementing robust processes and systems is essential to maintain stability and manage expansion effectively.

 

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About Sergio Fogel:

Sergio is an active angel investor and has invested in over 15 technology startups. He participates on the board of several companies, including TiendaMIA, The Chemist Look, Apptim, and dLocal.

Sergio serves as Vice-President of Endeavor Uruguay and sits on the board of Helpers, an NGO that aims to save lives through technology-enabled, very fast response from first aid volunteers.

Sergio co-founded dLocal together with Andres Bzurovski in 2016 after having founded several other companies, such as ElAgora.com (B2B marketplace), Uniotel (VoIP), and Astropay (payments processor).

Sergio holds an MBA from INSEAD, France, a Bachelor of Arts in Computer Science with a Summa Cum Laude, and a Master of Science in Computer Science from Technion, Israel Institute of Technology, Israel.

Connect with Sergio Fogel:

• LinkedIn
• Crunchbase
• TheOrg
• RocketReach

Read the Full Transcription of the Interview:

Alejandro Cremades: Alrighty. Hello, everyone, and welcome to The Deal Maker Show. So today, we have a really amazing founder, you know a founder that has done it multiple times, very successfully so. And again, we’re going to be talking about the building, the scaling, the financing, all of the good stuff that we like to hear. So again, brace yourself for a very inspiring episode. And without further ado, let’s welcome our guest today, Sergio Fogel. Welcome to the show.

Sergio Fogel: Hello, thank you for having me. It’s a pleasure to be here.

Alejandro Cremades: So originally born in Uruguay, how was saying life growing up over there? Give us a walk through memory lane.

Sergio Fogel: ah ah It was quite different the Uruguay back then than the Uruguay now. um There was almost no technology scene, but what was so very particular about Uruguay is a very ah very deep tradition of of lots of mostly theoretical mathematical education.

Sergio Fogel: um It’s a system, educational system, quite based on the French one, where a read few people got a very high level of education in math, quite quite deep.

Sergio Fogel: Other than that, Uruguay used to be always a very boring place where nothing happens. and It changed a lot recently, ah but to but yeah back then it was ah not an ideal place for a teenager to be living at where you’re looking for adventure and excitement.

Sergio Fogel: um Again, it changed.

Alejandro Cremades: and talking about excitement, what got you excited about computers?

Sergio Fogel: um i Actually, it’s a Sinclair Spectrum. I don’t know if you remember, there what used to be a very tiny computer called the Sinclair. Sinclair was the name of ah of the inventor. He passed away not not very not very long ago. And I once was ah traveling and visited London and a friend whom I had met showed me hit that computer and it just blew my mind open. I couldn’t believe it. and I said, i I must have one of those. i I essentially took all the money that I had spare in that trip. I spent all my money on on that machine, brought it home and never looked back. i

Sergio Fogel: really become super excited and I had to learn more and more. So I started to learn how to program in in basic and then assembly. And then I started to learn about ah the processor. It used to have a Xylo processor. So I got very, very deep into that.

Alejandro Cremades: So then, in this case, how do you find yourself in Israel? It’s not a long way from ah your wife.

Sergio Fogel: Yeah, well, i’m i’m i’m I’m Jewish. I had learned Hebrew at school. And as I told you, Uruguay was very boring at the time. I was 19 years old. I was studying at the university. We had just ah transitioned ah from military dictatorship to democracy. But the whole system was a big mess here in Uruguay. So I said, okay, I have to live.

Sergio Fogel: and um And I went to Israel, got accepted at the Technion, which is ah the Israeli version of the MIT. And they for me, I absolutely love the hardware and software and stuff. And it was like ah going to to to this world. um And they did very well over there, and studied computer science, then did a master’s.

Sergio Fogel: Again, I like a to go very deep in everything that they do, so I ended up being a researcher in in in computer science and I loved it.

Alejandro Cremades: So then let’s talk about their being in Israel, you know because you were there for quite a bit of time. you know And that was say ultimately the place where you started to do your first thing you know steps in the in in in in the business world. So how was that for you?

Sergio Fogel: Yeah, well, actually my first steps in Israel were more in in in in in R and&D.

Alejandro Cremades: the

Sergio Fogel: At the time during my master’s, as I said, I was so quite deep into computer science and I went into a VLSI design, a chip design. m As I told you, I like to go deep. But it was super exciting. That that place, I used to work for IBM in the the Haifa research, just to be a research center and became a research lab. a Amazing group of people, people that from all over the world ah Very, very smart. Smart people learned a lot and absolutely loved it. I would have stayed. I was very happy over there. But by then, after 10 years over there, and we had our first they are first son.

Sergio Fogel: And, you know, being Latinos, we want to stay close to the family. Both our parents, mine and my wife said, we’re in your way. And we wanted the kids to grow near their their families. So we decided it was time to head back home.

Alejandro Cremades: And obviously, heading back home also got you into thinking that maybe it was time to go back to school, and in this case, a business school. So I guess say coming from kind of like that tech background, what what do you think opened up ah going to insert for you?

Sergio Fogel: Yeah, I went to to he said to my my MBA. um Oh, it’s a great experience. I i knew that I needed to move out of of of deep tech because there was there weren’t any opportunities back then in Uruguay. So for me, business ah business school was a step to change ah to change direction.

Sergio Fogel: um Someone that the manager of the career office at INSEAD said that ah Most people who do an MBA do it either to change a function, to change industry, or to change geography. And she said, try to keep it just one of them, maybe two, not the three of them. And I said, okay, maybe I’m… I’m trying to do too much because I was trying to change a all three. um So I decided to try to stick to the technology industry, ah but change geography and change function. But again, inside opened the opened my mind to the whole world of business and many things that being a computer scientist, I consider to be like almost a treason, like a commercial and a strategy and so on.

Sergio Fogel: I found that I actually liked it and they moved initially when I went back to Europe, I moved to to Oracle, to the commercial function, which again was in a way a betrayal for ah for an initial part. But then I found I absolutely loved it and coming from from technology,

Sergio Fogel: ah You get such a high level of credibility when you’re talking to the IT manager of a company and you’re trying to sell the database. It used to be very expensive. its It still is. and So, at the end of the day, people, when they buy, they’re buying credibility mostly. And and I had that because of my background. so i It helped me a lot, both both the MBA and my previous said technology experience was super helpful.

Alejandro Cremades: So after about seven years of being at Oracle, ah you decide that it’s the time to start your first venture. And as they say, you either succeed or you learn. So what was that for you? What was that the lesson?

Sergio Fogel: I learned.

Alejandro Cremades: And what did you learn?

Sergio Fogel: and

Sergio Fogel: First of all, I learned many things. um First thing that I learned is ah do not start a company in partnership with your with your spouse.

Sergio Fogel: um and Second thing I learned is try not to do it with your own money, even though you feel that ah you that you have enough money to find to to fund it. Do not do it.

Sergio Fogel: um And third big lesson is that things that look very easy from inside a a corporation when you’re outside and are not as easy as as they look.

Sergio Fogel: So you carry ah a business card that says, I’m a sales executive directorial and people will take your calls. When you’re a founder, it’s not so easy. and So those those said three lessons were very, very important. Again, I learned the the hard way. um I also learned about, especially in the world of B2B,

Sergio Fogel: ah the value of um of relationships and trust. And that, I mean, I’ve started a few companies, ah most of them in the B2B space. I think that all of them, I had the first question customer lined up before I even launched the company. And that’s super important, super helpful.

Sergio Fogel: and

Alejandro Cremades: so then So then, obviously, you know after this experience, then you started Uniotel, which i actually still up and running, and it was voice over IP. So i was that day how was that you know next chapter? like What did you do differently to make sure that they it was more of a you know success experience versus a lesson and learned?

Sergio Fogel: Yeah, first of all, in my second venture, my co-founder, we are still partners and we are still very close friends. He’s way older than I am. He’s 11 years older than them. And I found that combination to be extremely, extremely valuable.

Sergio Fogel: um because he brought a lot of experience. He knew stuff the importance of keeping of managing accounting, of ah of being on top of cash. He brought lots of relationships and I brought all the the youth and the the eagerness to succeed and the ah putting lots of hours and learning about the technology we got into voice over IP. I learned everything about the technology.

Sergio Fogel: and So you have that combination of experience on one side, the the energy on the other, one side brings a relationship, the other one brings a knowledge of of of technology, and it worked there great. And it also worked out very well for me in in the following startups when we later started Astrobay. My co-founder, he’s 13 years younger than than I am.

Sergio Fogel: And again, that combination worked out very well for me. and So it’s something I haven’t seen it in in any business book or anything of the sort, but I highly ah highly recommend it. Typically, the founders are, I don’t know, two former classmates or co-workers. That combination, it’s harder to find the right co-founder with a big age gap, but it’s very, very valuable.

Alejandro Cremades: Yeah, because it’s also like a mentor, no? Now, in this case for you, the third one was jet numbers, and you ended up closing it about three years ago. So one what was the lesson you know that you took away from jet numbers with you?

Sergio Fogel: Yeah, JIT numbers, um a it was, in a way, a spin-off from UNUTL. We wanted to do something. we We had the opportunity to buy wholesale phone numbers, and and then you could buy from us a phone number ah anywhere in the world and take the call wherever you were. So today’s doubt sounds quite trivial. Back then, it was very innovative.

Sergio Fogel: So we had the customers, I don’t know, software companies that wanted to have a customer support number in a different market or I don’t know, people who wanted to have a phone number, migrants to give their mothers a phone number that they could call locally or whatever. you um And then it was a BBC company and they a and we learned a lot about how to manage everything. We were We were very early on into into ah Google AdWords, and we started selling all over the world. a We learned a lot about how to… There wasn’t yet ah all the something that’s very common today about how to measure a

Sergio Fogel: customer acquisition cost, lifetime value, estimated lifetime value, how much you can spend on advertising and so on. um So we had to study about that and and develop our own tools, and which again today is fairly standard. m and We learned about a lot about and the importance of going after markets that other competitors are not looking at.

Sergio Fogel: And when we launched, a very quickly after we launched, we had a major case of a charge wax fraud, essentially. So people were buying our numbers with stolen credit cards, and then they were using the numbers to do further fraud. So that was very big threat to us.

Sergio Fogel: and So our initial reaction, the dirt reaction, because most of those transactions came from Africa, our initial reaction was to block everything coming from Africa. and But then as as that market became more competitive, we saw that we we have a real demand coming from Africa and from Southeast Asia. And we saw that those who were underserved markets.

Sergio Fogel: and So at one point we said, okay, let’s ah tackle those again. Let’s use other payment methods, are alternative to credit cards. and and they And let’s not close those markets down. And then we started to focus on those markets. a And because those markets are overlooked by many of the competitors, you can make much more money over there.

Sergio Fogel: And that’s a lesson that we we learned that we kept for a long time. And that’s how we ended up i know today with the local, we specialize in in emerging markets, which are a a ignored or not necessarily ignored, but but neglected by other players because they are so so hard also. It’s a completely different dynamic. and And the other thing that we learned a lot about was so how to fight fraud. ah There’s a lot of fraud. a Fraudsters in some in in countries like Brazil are amazingly creative.

Sergio Fogel: So you need to develop ah very very sophisticated tools, much more sophisticated than what you’ll need for a Europe or or the US.

Alejandro Cremades: So one.

Sergio Fogel: So yeah, we learned a lot.

Alejandro Cremades: One thing here that I want to ask you is, this was the segue into ultimately AstroPay. And out of AstroPay, there was a spinoff for like what you were talking about, which is D-Local, which is arguably your biggest success to date. i mean At one point, it was valued at $18 billion, the company, which went public. So how did the sequence of events happen for you to get going to AstroPay, and then all of a sudden D-Local starts to become this smashing success?

Sergio Fogel: Yeah, i said as I told you before, it’s a when when it’s a B2B company, it’s so helpful to start with that with a customer that needs a product and tells you, if if we build this, I will buy it.

Sergio Fogel: And we had the situation initially with ah with a customer, the two customers, one of them was ah Poker Stars, and they said, we are having a real trouble in Brazil. If you guys can build a payment solution for us in Brazil, and we will be your your customer.

Sergio Fogel: um So we started with that and we we expanded to other, and we we found that a solution, a compliance solution ah without their regulations in Brazil and so on. And and we started working for them and we expanded them to other, initially to other a customers, are what we call merchants in the industry.

Sergio Fogel: And then we expanded to other and to other geographies. um And at one point, we said, OK, maybe it’s time to split this company in two. I want that this deals with the high risk a customers, and the other one a it doesn’t do any high risk. And the the low risk part is delocal.

Sergio Fogel: m So it’s been a quite ah a long journey. It’s hard for me to to summarize it, but there were a few a few key milestones. A big milestone was when we got our our first investor. We were looking for investors rather than investment.

Sergio Fogel: And because so we became but essentially we we were bootstrapped and we became profitable very quickly because of what i I just said that we had the initial customer before we didn we even we will have had the product. But it was very important for us to have ah ah the investor that would bring value to us. So the first investor was so a company called the Czar Capital capital ventures. So as our capital, the owner of that family office is Eduardo Azari. He’s still with us. He’s the chairman of the local today. And with his team, they helped us improve the company, do a lot of what our current CEO calls company building.

Sergio Fogel: um staff from properly manage your ah your accounting to getting to being licensed in all the relevant geographies and so on. um And the other big milestone, again, that we were looking for an investor rather than that the investment, and this was after the the local was spun off, was when we got General Atlantic on board.

Sergio Fogel: Which again, General Atlantic, when they did the due diligence on on the company, they found the they found a many things they didn’t like. So we said, okay, we we we will commit to fixing all this in six months. um We were super hard to do that. a But again, we we we had to raise the bar in terms of how we manage processes internally, how we do Things that, as a founder, I find super boring like, I don’t know, ah internal audits or a all type of processor-oriented things as opposed to customer-oriented things. We’re are always very technology-oriented and very customer-oriented.

Sergio Fogel: But as you grow, you need to have processes in place and because otherwise the whole house falls. So those are the the foundations on top of which you you can build more and more customers and products and services.

Sergio Fogel: And the third big milestone, of course, was so going public.

Alejandro Cremades: What was

Sergio Fogel: We went public in in June 2021. and

Sergio Fogel: incredible amount of work. and the The CEO of the company at that time was already Sebastian, who managed the company up until one year ago. and Very, very bright ah person, very driven, amazing leader.

Sergio Fogel: And him, together with the half of which was our COO and the whole team, ah they did an amazing process. We you saw the opportunity to go public. We did that in record time. It took us a little bit more than six months.

Sergio Fogel: um incredible amount of work because first of all, we needed to change auditors because so we were audited by our, it wasn’t a big four. So, and the auditors say,

Sergio Fogel: demanded to redo the three financial statements. They wouldn’t rely on the previous auditors. We had to change our jurisdiction. We had to change and accounting standards and from IFRS to US GAAP. And on top of the normal process of an IPO, which is ah a lot, a lot of of work.

Sergio Fogel: So, yeah, we ended up going public in 2021 at a very high valuation. At the peak, the valuation evaluation was at 20% of Uruguay’s GDP. So, it was a so very, very big milestone for for the country. I mean, we were in in the newspaper, in the the cover of all newspapers, so We became celebrities so overnight, which is something that we weren’t looking for and we weren’t ready for others either.

Alejandro Cremades: what do you think allowed What do you think allowed for that to happen?

Sergio Fogel: Well,

Alejandro Cremades: What do you think were the key ingredients for such a smashing you know success tool to to come to fruition?

Sergio Fogel: well the company is an amazing company.

Sergio Fogel: I addressed myself initially, but most of the credit goes to the rest of the team led by Jacque and Seva. We managed to build a company that solved a real pain for our customers. So maybe I should pause over here and tell a bit about what is it that we do. We process payments for the biggest companies in the world, for the biggest internet companies in the world in emerging markets.

Sergio Fogel: So today it’s very easy to process a payment in ah in the US or in Europe, just ah accept credit cards, maybe PayPal and the and to one of or more wallets, and that’s it.

Sergio Fogel: When you have whatever, let’s say a ride sharing platform or a streaming or a an ad network, and you want to accept payments from customers in Brazil or in Mexico or in Nigeria, it’s a completely different game. Most people do not have credit cards. The ones who do have credit cards, probably they are not they’re not branded with the same Visa, MasterCard or Amex.

Sergio Fogel: If you go to Nigeria today, many people have credit tasks, but they are very, it’s not part of ah the big, game of the big schemes. You go to Brazil, back then people wanted to pay with polo, today it’s peaks. You go to Mexico, then there’s a different payment method.

Sergio Fogel: So when you have a big company and they want to accept payment in all those markets, ah they need to set up a ah local entity because these schemes do not accept ah international merchants. So you need to set up a local entity, which means that you need to have a local board of directors and you need to have ah and accountants and lawyers and stuff. It’s it’s very, very painful. So it came to them when they said, we’ll solve for you Brazil.

Sergio Fogel: but not also Brazil, not only Brazil, but also of also Mexico, and we’ll give you South Africa, and we’ll give you India, and we’ll give you Pakistan, and so on. So there’s a huge value added over there, and that allows us to to to charge, of course, a a higher fees than what’s charged by a credit card the transaction.

Sergio Fogel: m ah So again, we create a lot of value. There’s another thing I like to say is that in in most cases, if you are a payment processor and for some reason your transaction fails, the consumer will end up buying anyway. they will Either the transaction will be routed through some other gateway or acquirer, or the consumer will take out another credit card and use the other credit card or whatever.

Sergio Fogel: When we fail a transaction, most probably the transaction will not take place at all. So that means, I don’t know, a customer who cannot pay for their satellite ah internet and will stay without ah without internet or someone who will not be able to take a ride or ah will not be able to pay for a he his so whatever streaming services or whatever.

Sergio Fogel: So that shows how much value we’re we’re creating and that’s what makes me most most proud.

Alejandro Cremades: So how have you been able to really um you know work on several projects at the same time? I see that also you have data-nomic in parallel too. So how how how do you go about um thinking about you know working in several projects at the same time? How does that work?

Sergio Fogel: um Well, it’s it’s not exactly like that because the truth is that, as I said, the a we haven’t been managing the company D-local for a few years. So I was a board member, very active in the company, but I wasn’t full-time in D-local.

Sergio Fogel: and I rejoined more more recently. and so So, I did have ah some spare time. and And we saw that opportunity with Aeronomic that came from Astropay, ah one of the of the managers over there. He showed me a product.

Sergio Fogel: that was developed internally. And he asked whether I thought there was an opportunity over there. And and i I really liked it. And and they said, OK, let’s turn it into ah into a separate company, and you’ll be the CEO of the of that company, and I will help you in mentoring. So I wasn’t full time in dynamic either.

Sergio Fogel: and So back to your question. I’m a firm believer that if you’re going to to start a company, you need to be all in, you need to be really full life into it.

Sergio Fogel: a So those those other companies have been, have mentored those, have been a board member, have helped, but but not not manage.

Sergio Fogel: Managing is a full contact job, full contact support.

Alejandro Cremades: So what do you think it’s going to be what do you think is going to be the next chapter for you, Sergio?

Sergio Fogel: I really love what I’m doing. I’m i’m quite involved today in in the local. Again, I have an important role in inside the company. i’m not dedicated that much time as i as I used to. And I love mentoring and helping other people start their own companies and realizing their their dreams. and So I like to use the parallel. I became a grandfather

Sergio Fogel: relatively short time ago. um So I like to say that starting a company is like becoming a father or a mother. um it’s It’s a lot of work.

Sergio Fogel: big realization. It’s really fulfilling in an incredible way. And the mentoring and investing in the company is a bit like being a grandfather. So you’re not as involved. You can have many more. and It’s not practical to have more than, I don’t know, two or three kids. Same thing with startups. Being a grandfather, you can have more.

Sergio Fogel: Of course, the the amount of satisfaction and realization that you get is not the same, but you still feel the the the same level of of pride and so on. So I see myself continuing helping and and and mentoring othering other entrepreneurs. I also i haven’t mentioned, but I organized an event in Puta de Leste, which is ah an amazing and summertime in in your wise east. It’s called Punta Tech. It happens every January and it’s a gathering place of of different entrepreneur entrepreneurs, investors and other corporate ah people.

Sergio Fogel: and So again, that’s an enabler of contacts, of networking, of transactions. And again, those are the type of things that make me feel very proud. Every time I hear that an entrepreneur met with his co-founder or her co-founder or met her investor in Punta Tech, that makes me feel super proud.

Alejandro Cremades: That’s amazing. Now, if you could go back in time and give that younger Sergio one piece of advice, you know, maybe that the younger Sergio that was saying, put in the notice at Oracle to become an entrepreneur, what would be that one piece of advice if we’re launching a company and why given what you know now?

Sergio Fogel: I think ah the the most important thing, it’s it’s not the industry, it’s not the opportunity, it’s not the idea. The most important thing is who you’re going to do that with. So you need to find people that you really enjoy working with.

Sergio Fogel: and that because I mean, if if you found the wrong the wrong opportunity, you can always say correct course, you can raise more money, less money, but you’ll spend a lot of time of time and and you’ll go through an emotional roller coaster with whomever you do it with.

Sergio Fogel: um It’s super important that you get along well and that you enjoy the time. You’ll spend more time with your co-founder than with your your relevant to your spouse or significant other.

Sergio Fogel: So I think that’s the number one lesson. Do it with the right people.

Alejandro Cremades: look I love it. So Sergio, for the people that are listening that would love to reach out and say hi, what is the best way for them to do so?

Sergio Fogel: um I get lots of contacts. So first of all, I’m going to to apologize in advance if if I don’t answer because I need to be very selective. and But ah LinkedIn is the the easiest one.

Alejandro Cremades: Amazing. Well, easy enough. Sergio, thank you so much for being on the Dealmaker show today. It has been an absolute honor to have you with us.

Sergio Fogel: Thank you. It’s been a pleasure. Thank you for having me. And I do encourage people to come to Punta del Este for Punta Tech. It’s a great place.

*****

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