Quirno Lavalle, Menta: “The Argentine fintech ecosystem has a lot to contribute to the world”

A digital payment collection service based on stand-alone terminals and a network of aggregated services to add value to businesses. This is the goal of Argentinian fintech company Menta, which has set itself the aim of promoting the digitalisation of Latin American businesses by unifying and simplifying payment infrastructure in the region.

Fintechs represent 13.1% of nearly 33,500 Latin American startups that currently exist (that is, more than 4,300 companies in total), according to the Landscape Tech Latin America 2023 report. In Argentina’s entrepreneurial ecosystem this sector is particularly relevant: more than 700 fintechs operate in the country, and 447 of these are of national origin. The Argentine capital, Buenos Aires has also become an important hub for global financial innovation.

Among the verticals in which Argentine fintech companies operate, paytech or payment technology stands out, as well as B2B solutions. It is specifically within this area and with this business model that the startup Menta operates, whose white-label payment collection infrastructure for companies is driving the digitalisation of Argentine businesses. Alejandro Quirno Lavalle, co-founder and CFO of the company, explains the clear demand to which his service responds.

What is Menta’s value proposal? What are the advantages for a company to rely on external infrastructure such as Menta’s, instead of carrying it out it in-house?

In Latin America, payment infrastructure is fragmented and outdated. A company that wants to operate regionally has to add each processor and buyer, a process that takes nine to twelve months, and which it then has to replicate in every country. Menta was created with the aim of developing a digital payment infrastructure so that companies would only have to add a single platform for all the Latin American countries where we are present, therefore giving them a quick and simple go-to market which does not require investing a fortune in the development and maintenance of the service.

In addition, mobile POS [mobile phone point of sale] is prevalent in the region, but mobile phone technology is basic. This means that when a card transaction at an mPOS in Latin America is made, it takes so long that it generates a time out, which in turn results in a surcharge for the payment aggregator. That’s why we manage our entire service on standalone SmartPOS devices [smart point-of-sale terminals] which have their own Wi-Fi and up to 4G connectivity.

The other layer of added value we bring is an open and collaborative ecosystem. Our terminals include an app store developed by Menta, which customers can personalise and adapt to the needs of their business, and onto which they can add their own service. In other words, we offer them cross-selling with other Menta customers.

Why is it strategic for your customers to incorporate a digital payment service?

The post-pandemic trend was towards digital service adoption. The first wave of financial inclusion was directed towards consumers, with wallets, cards and virtual money. Consumers now want to buy products and services through these channels but find that shops and businesses do not use them. We offer a strategy for businesses to easily digitalise so that they can respond to their consumers’ needs. We identified that a shop that only used to accept cash payments increased its sales by almost 17% after acquiring a digital payment terminal.

The distributor also needs to go digital. Companies that distribute goods to shops incur hidden costs for the transfer or management of cash used by the shop to pay the supplier, which range from 3% to 7%. We also offer an inventory management function, which makes it much easier to establish more efficient routes, and to know in a simple way and in real time all the products that the stores sell.

Thirdly, we add value to the point of sale by incorporating other services. For example, we have managed to increase gross sales by 5% when combining e-commerce with physical retail, developing phygital strategies.

In 2022, just one year after the company was founded in Argentina, you expanded your operations to Mexico and Colombia. Has a global approach always been part of your business proposition?

Yes, internationalisation has been our goal from the very beginning. The hassle of establishing a payment infrastructure in another country is one of the biggest issues in Latin America, and we simplify the barriers to adopting this technology.

In the first year we launched Argentina and Mexico, followed by Colombia, aiming for diversification as a strategy. We achieved this expansion together with local partners that were relevant to our industry in each country. We now have plans to move into Peru, Chile and Brazil.

Last year, Menta managed to raise 6 million dollars in its seed round, in addition to the $1.7 million raised in its pre-seed round. How did you approach this new round in the context of the 2022 venture capital slowdown?

We had a unique characteristic that made us very different from the rest, I think because of the issue we are dealing with: it only took us 20 days to close the round, in a context where funds were being held back and everyone was cautiously waiting for market variations. And this characteristic occurs when you have a business model that is solid, and investors recognise that it meets a need. Because when you focus on solving problems, it is easier to identify and acquire customers. The opportunity is quite a lot more volatile, but the problem persists and the need to resolve it remains.

What is the state of the fintech ecosystem in Argentina?

Argentina has many opportunities for growth, not only in fintech, but also on a macro level. We have a great deal of instability, which presents a lot of opportunities and also makes us Argentines extra creative when trying to resolve conflicts. If you compare applications in Argentina with those in other regions, you will see that the quality of user experience is superior. I believe that the Argentine fintech ecosystem has a lot to contribute to the world and to Argentina, but the local market is not enough for fintech yet. Economic ups and downs make it difficult to focus on Argentina alone.

How are Menta and BBVA Spark collaborating?

We have collaborated at significant events, such as the launch of BBVA Spark in Argentina. This was a great opportunity to network and connect, which is some of the major value that Spark brings to the ecosystem. And not only in Argentina: a few weeks ago we organised an event in Mexico which was attended by Teresa Martín, Director of Open Innovation at BBVA Mexico. At this event we tried to communicate how companies the size of BBVA are managing to shift from being what was previously perceived as a traditional corporate company to becoming strong drivers of innovation.

What metrics have you been able to achieve?

Our target for this year was to have 15 new clients, and in the first quarter we already had 10. We also had a target of 90 monthly transactions with an average volume of $1,500 or $2,000 per store on the platform, but our service is driving over 550 transactions per month for a volume that was $10,000 last month and $8,000 the month before; that is, more than 5 times higher. We have received an excellent response, growing at an average rate of 80% per month in recent months, and we expect to process 100 million dollars by the end of the year.

In the current scenario – a more cautious VC, a fairly competitive fintech landscape – what would your advice for a startup aiming for sustainable growth be?

I would first look at the markets in which you want to trade. For example, a start-up in Brazil – which is a huge market – with a value proposal that solves a well-identified problem could launch solely in Brazil. On the other hand, in Argentina I would say the opposite. If you are in a market where the macro is very unstable, my strategy would be to look for more than one market. I would also have a watertight proposal, and I would be sure to have a large potential market, which is what an investment fund looks at.

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