The Argentine unicorns club is expanding. The 4 pioneers in reaching a valuation of US $ 1 billion (Mercado Libre, Globant, Despegar and OLX) were joined last year by Auth0, but there are 5 other firm candidates to qualify as a unicorn. In 2019, 91 startups captured record investments of US $ 403 million, but 93% of the total were concentrated in Ualá, Auth0, Satellogic, Agrofy and Technisys, which received funds of US $ 376 million. However, there is another that grows to staggering levels without funding. This is Etermax, the creative firm of Asked, one of the most successful mobile games in history.
The Argentine entrepreneurial ecosystem matures. Above all, due to the emergence of private investors, who finance promising projects, with a global vocation and rapid growth. Strictly speaking, only a select minority manages to overcome crises, climb stages and position themselves as a unicorn. This is what Auth0 achieved. In 2014, it received an injection of US $ 2.4 million from the Bessemer Venture Partners fund. To date, it has already raised US $ 332 million, which raised its valuation to the figure of US $ 2 billion.
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The company created by Matías Woloski and Eugenio Pace develops authentication technologies for companies. This infrastructure replaces for employees the nightmare of using passwords to access internal systems. Auth0 managed to add more than 11,000 clients to date, including Siemens, Naranj Card and the Wall Street Journal. They not only innovated with the product but also with the recruitment of talent. “Half of the employees work remotely from 35 different countries,” Woloski told Economics.
The businessman is 39 years old and is a computer engineer graduated from the UBA; his partner, Pace, is also an engineer but in electronics and trained at ITBA. Auth0 has income, but it is not yet profitable, something common with new ventures. So much so that three weeks ago, Salesforce Venture invested US $ 120 million, after analyzing the business model, its balance sheets and the possibilities to scale globally. “Startups take many years to obtain profitability. When Facebook went public (in 2011) it was still not making a profit, ”argued Luis Bermejo, from the Alaya Capital fund.
Financing is key for startups. It is the previous instance that could lead to the arrival on the New York Stock Exchange, a route that Mercado Libre, Globant and Despegar have already traveled, in that order. But not everyone aspires to that. “We are prepared and we have the muscles developed for that, but the most interesting challenge today is the product and the impact it can generate in high technology,” said Woloski.
Beyond its symbolic meaning, reaching the rank of unicorn is an unquestionable achievement. The concept was first proposed by Aileen Lee in 2013, when she chaired the Cowboy Ventures fund. Thus she referred to very young companies that grew very fast. But in 1979, MIT economist David Birch used animal names to classify companies based on their ability to create jobs: elephants (large corporations), mice (those that are small and cannot or cannot grow), and gazelles: those that are barely born and grow at surprising rates. Like a unicorn.
Ualá is a fintech that could qualify as a unicorn and also as a gazelle. With almost 3 years of life (it was launched in October 2017) it has already attracted the interest of investors such as George Soros and Goldman Sachs, among others. In 2019, it received investments from China Tencent and Softbank for US $ 150 million, which were valued at US $ 900 million. Today they have 400 employees, “of whom 150 were hired during the pandemic,” describes Pierpaolo Barbieri, its CEO and founder.
Funds invested in 2019
A 33-year-old native of the Caballito neighborhood, he created the startup focused on financial business. It offers prepaid cards, loans, installment credits and service payments, among other things, unified in a mobile application. Although it seems the opposite, Barbieri maintains that it does not compete with traditional banks: “We have alliances with BIND, Galicia and Mastercard. We are complementary ”, he defines.
In such a short history, Ualá records “between 2 and 3 million” of open accounts, which are served from its headquarters in Palermo and its subsidiaries in Rosario and Córdoba. Barbieri studied history, he is the author of a book on the economy in the Spanish civil war “that nobody read.”