VC funding for LatAm startups grows 185% YoY with two months left in 2021.
Tell us more about your background and what inspired you to be an entrepreneur.
My passion for entrepreneurship was born when I started investing in startups as an angel investor in March 2020. In addition to investing capital, I often joined as an advisor to the businesses aiming to put into play what I had learned in my academic (business administration/finance) and professional career (scaling technology products). What I quickly realized was that the investor in me aimed to capture value while my strategic orientation aimed to create value. I also realized that by getting deeply involved with the business, the value I created would ultimately allow me to capture additional financial value in the future. Could there be a way to systematically do both? This is when the idea of operating an investment vehicle first came to mind, and Epakon was born.
What is the problem that you are trying to solve?
There are two main issues that are related:
- Latin America historically has experienced a mass exodus of talent because of the ubiquitous social, political, and macroeconomic challenges in the region. People who have opportunities or have gotten high levels of secondary education tend to leave their home countries in pursuit of a better quality of life elsewhere. This phenomenon has created a never-ending cycle, where the talent gap increases as countries cannot always reap the rewards of the citizens they have educated. Because of this, innovation in the region lagged that of the developed world, even though the region is home to over 600M people.
- Given the lack of innovation, the region has always been under-digitalized. Until Covid-19 hit in early 2020, it was not a substantial issue, but now it is the focus of every government and company that is looking to scale and become more efficient.
What is your edge?
Epakon deploys strategic capital for firms looking to build, grow, and scale their operations. The largest value-add, however, is not the capital itself but what comes with it, which is a team of experts in venture, technology, and finance, which also has a track record of success with a ~10x MOIC (Multiple on Invested Capital) over the past 18 months.
What was the inspiration behind Epakon?
Our first portfolio company, Yummy, crushed all expectations. It wasn’t always easy. Bringing capital to what was at the time a flailing economy, Venezuela, was tough. We got more nos than yeses by a landslide, but we knew the amount of capital we needed to launch and be successful, so we persevered, and we were able to close a full round of funding. Beyond the financial return, we have been able to generate thousands of jobs and power an economy to its first positive GDP growth in a decade. This impact that both our capital and strategic thinking can achieve is what inspires us every day.
Tell us more about Yummy.
In Venezuela, we are doing over 4M in annualized transactions. The company expanded its offerings to include ridesharing and quick commerce (under ten minute deliveries). The Series A we just closed will allow us to expand across the region, starting with Peru and Chile, both of which launched last month. The goal is to be in every country in Latin America within two years.
How did you get started?
Angel investing requires capital. We were fortunate to have worked in technology and finance jobs for a few years, which allowed us to build sufficient wealth to start investing VC-type checks.
Any advice for people looking to start investing in startups?
Nowadays, platforms like Republic, AngelList, StartEngine, and WeFunder allow you to invest small amounts of capital into startups, so if you are interested in getting involved and fit the qualifying criteria, you can start investing.
Diego Salas (MBA ’22) is a founding partner at Epakon Capital, a Latino-managed venture fund investing across Latin America. At HBS, Diego served as Social Chair for section F as well as VC Chair for the Entrepreneurship Club. Diego’s goal is to uncover technologies that create positive social compounding effects around the globe. He is passionate about wine, cooking, and exercising.