This Serial Entrepreneur Built 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. This interview dives into Sergio’s story and offers valuable lessons in business, technology, and leadership.

Listen to the full podcast episode and review the transcript here.

Early Years in Uruguay: Where Curiosity Took Root

Growing up in Uruguay, Sergio was surrounded by a robust theoretical education system rooted in mathematics, influenced by French pedagogy. At the time, there was almost no technology scene, remarks Sergio.

Yet, Uruguay of that era was “a very boring place where nothing happens,” as Sergio described. The lack of excitement fueled his desire for adventure and exploration. His first encounter with computers came through a Sinclair Spectrum with a Xylo processor.

This compact machine sparked a lifelong fascination with technology. Sergio spent his teenage years mastering BASIC and assembly programming, diving deep into the processor’s workings.

This early immersion laid the foundation for his future computer science and entrepreneurship endeavors.

A New Chapter in Israel: Bridging Academia and Industry

At 19, Sergio left Uruguay for Israel to pursue his studies at the Technion, often dubbed the “MIT of Israel.” The Technion provided him with an unparalleled environment to deepen his expertise in computer science and hardware design.

Sergio thrived in Israel’s tech-driven ecosystem, eventually working at IBM’s Haifa Research Center on VLSI chip design. Although he found success and fulfillment in research, family values drew him back to Uruguay after a decade in Israel.

Sergio’s return also marked a shift in his career trajectory—moving from deep tech into business.

The MBA Pivot: From Technology to Business

Realizing Uruguay’s limited opportunities in advanced technology, Sergio enrolled at INSEAD for an MBA. This decision was a turning point. The MBA program opened his eyes to business functions like strategy and sales, which he had previously viewed with skepticism.

Sergio recalls being told that most people doing an MBA have the objective to change a function, industry, or geography. He had been attempting to do all three but instead opted to impact the technology industry, viewing commercial strategy from the computer scientist’s perspective.

Post-MBA, he joined Oracle in a commercial role. Leveraging his technical credibility, he excelled in selling complex IT solutions. However, after seven years, he felt the itch to venture out independently.

Lessons from Early Ventures: The Hard Way

Sergio’s first entrepreneurial endeavor was a crash course in business. Partnering with his spouse and funding the company with personal savings proved challenging. Despite these hurdles, Sergio emerged with invaluable lessons:

• Avoid mixing personal relationships and business partnerships.
• Seek external funding rather than self-financing.
• Understand that startup challenges differ vastly from corporate ones.
• Carrying a sales executive directorial business card opens more doors than being a company founder.
• The value of relationships and trust in the B2B world cannot be stressed enough. Sergio had customers lining up outside his companies even before formally launching them.

Leveraging these lessons, Sergio started his next venture, Uniotel, a voice-over-IP company. This venture was successful, thanks to a complementary partnership with an older co-founder who brought experience, financial discipline, and relationships.

On his part, Sergio brought in technological expertise. He learned the importance of combining youthful energy with seasoned wisdom—a principle he applied in subsequent ventures.

The Uniotel Spinoff – JIT Numbers

The next venture he started with two of his classmates was JIT Numbers, a spin-off from Uniotel. Sergio recalls that they had the opportunity to purchase wholesale numbers. Users could purchase a phone number anywhere worldwide and take calls wherever they wanted–an innovative concept.

JIT Numbers had customers from different segments, including software companies who wanted customer support numbers in different markets and migrants who wanted to give their families a number to call locally.

Sergio also recalls working with BBC and learning how to manage the service. At JIT, they were among the first to start using Google AdWords and were soon catering to worldwide customers.

Some of the first things they learned were measuring customer acquisition costs, estimated lifetime value, and potential advertising costs. Sergio remembers developing their tools in-house and understanding the importance of targeting markets untouched by competitors.

Soon after the launch, JIT faced a major threat–charge tax fraud. Users were purchasing numbers and charging them to stolen credit cards. These numbers were further used to commit more fraud.

The knee-jerk reaction to this challenge was to block all transactions coming from Africa since most of the fraudulent transactions were generated from the continent.

However, as the markets became more competitive, Sergio and his team realized that real demand was coming from Africa and Southeast Asia, which were underserved markets.

As an effective workaround for fraud, they came up with the idea of using alternative payment methods for credit cards. Since the competition was overlooking these markets, they had the potential to earn substantial returns.

Sergio would ultimately use these lessons when building dLocal. They specialize in emerging markets that other players neglect because of their unique dynamics and challenges.

At dLocal, they also learned to fight fraud committed by amazingly creative fraudsters like in Brazil. They leveraged highly sophisticated tools that were unnecessary in locations like in Europe.

dLocal: Unlocking Emerging Market Potential

Sergio made a significant leap by focusing on payments in underserved markets like Brazil, paving the way for dLocal. The company was founded to tackle cross-border payment challenges in emerging markets, providing innovative solutions for global merchants.

dLocal is a B2B company, and as Sergio reveals, it was valued at $18B when it went public. He outlines some key ingredients that he has used to achieve success. Firstly, he talks about customer-driven development.

dLocal’s genesis came from a real-world problem faced by a major client, GoDaddy, which struggled with payments in Brazil. Starting with a clear customer need allowed the company to bootstrap effectively and achieve profitability early.

Next, Sergio and his team found a compliance solution without regulations in Brazil. dLocal started working with them and eventually expanded to other customers or merchants in the industry. They also went on to capture other geographies.

Raising Funding – The Next Milestone and Strategic Partnerships

dLocal’s first investor, Eduardo Azari of Zar Capital Ventures, provided more than funding—he offered expertise in company building, accounting, compliance, and licensing in global geographies. Eduardo is the chairman of dLocal today.

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Next, the company got General Atlantic on board. Sergio recalls how they did the due diligence and pointed out several areas that needed urgent attention. In their commitment to fixing the shortfalls, they ended up raising the bar in terms of auditing the internal processes.

Sergio admits that being more technology-oriented and customer-oriented, they had neglected the processes aspect, which was the cornerstone of the entire business. A robust process can help the company build more products and customers to attract more customers.

Going Public: A National Milestone

dLocal’s IPO on NASDAQ was a monumental achievement, symbolizing Uruguay’s emergence on the global tech stage. Sergio considers it the company’s third key milestone. He credits much of dLocal’s success to its exceptional team, including its CEO, Sebastian Kanovich.

Sebastian led the company through its IPO in 2021, along with the COO and the entire team. Sergio recalls how they saw the opportunity to go public and did it in a record six months despite the incredible amount of work needed.

The process required rigorous internal transformations, including shifting accounting standards, navigating legal jurisdictions, and implementing robust corporate governance. At its peak, dLocal’s valuation equaled 20% of Uruguay’s GDP, turning its founders into national celebrities.

Driving Value for Customers

Sergio is proud that they built a company that solved a real pain for their customers. Today, dLocal processes payments for the biggest internet companies worldwide in emerging markets. Thanks to dLocal, users find it extremely easy to process payments.

Sergio explains that in the US or Europe, users accept credit cards and PayPal payments into one or more different wallets. Customers can easily pay vendors regardless of accessing a ride-sharing platform, streaming, or ad network.

However, it’s an entirely different game in Brazil, Mexico, or Nigeria. Most people do not have credit cards. Existing credit cards are not branded with the same Visa, MasterCard, or Amex; each location has a different payment method.

Multinational companies and big brands must set up a local entity because the payment network does not accept international merchants. This situation also means they must institute a local board of directors, accountants, and lawyers, which is very challenging.

dLocal ensures that customers wanting a service like satellite internet or ride-sharing need not go without it because of their inability to make payments. That’s the value it delivers by enabling transactions.

The Road Ahead

Sergio’s journey from Uruguay to leading a global fintech giant underscores the importance of blending technical expertise with business acumen. His ability to adapt, learn from failures, and seize opportunities in underserved markets inspires entrepreneurs worldwide.

Sergio talks about his satisfaction and pride when helping and mentoring other aspiring entrepreneurs, investors, and corporate members. He has recently organized the annual Punta Tech, which is a gathering place of of different entrepreneurs.

As dLocal continues to redefine cross-border payments, Sergio’s story reminds us that innovation often lies at the intersection of ambition, adaptability, and a relentless drive to solve real-world problems.

Listen to the full podcast episode to know more, including:

• 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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