[HN Gopher] Launch HN: R2 Capital (YC W21) - Working Capital as ...
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       Launch HN: R2 Capital (YC W21) - Working Capital as a Service in
       Latin America
        
       Hey HN - we're Roger and Roger, the founders of R2 Capital
       (https://www.r2capital.co/). We provide flexible working capital to
       small and medium businesses (SMBs) across Latin America by
       integrating with payment processors, point of sales systems, and
       marketplace apps. This enables us to get paid back with a
       percentage of their online sales.  We come from entrepreneurial
       families in El Salvador and Honduras, and understand the impact
       small businesses have in terms of job creation and economic
       security. We've also witnessed our families struggle accessing
       capital for their businesses in both good and tough times. In fact,
       SMBs generate ~60% of jobs but only 25% of GPD in Latin America.
       They often can't grow because it's really difficult to access
       capital - not enough assets, tedious paperwork, onerous personal
       guarantees - and the onset of the pandemic only made it worse as
       banks retrenched from financing this segment. We started R2 last
       year when many SMBs in the region were forced to sell digitally in
       order to survive.  Banks tend to underwrite small businesses
       according to their total assets or the creditworthiness of the
       owner. Banks don't, however, analyze SMBs based on their daily
       sales and underlying customer base. By partnering up with
       processors and marketplace apps, we access underwriting-rich data
       and figure out what companies to fund.  In the US, platforms such
       as Stripe, Square, and Shopify have all started capital programs
       recently. Our goal is to equip comparable platforms in Latin
       America with their own capital program, so that they don't have to
       build out this service internally from scratch.  I previously
       worked at Reef, which operates dark kitchens in the US, where all
       orders went through marketplace apps such as DoorDash, UberEats,
       and Postmates. I spent a lot of time ingesting, cleaning, and
       standardizing their data to determine how each virtual restaurant
       was doing. This type of data can also be quite useful to assess the
       future performance of a small business.  Using the platforms' data,
       we carry out the risk assessment on their behalf. We also provide
       the capital, which ensures an optimal experience to both platforms
       and merchants. We've done the legal setup in Mexico, Colombia, and
       Ecuador, and make sure we're following local compliance which
       removes any risk to our partners. We also handle the marketing,
       servicing and capital management in order to scale each program.
       We don't charge the platforms we partner with. Instead, we invite
       them to participate in our financing upside so that they can
       activate a new revenue stream. More importantly, they get to
       provide a valuable financial service without having to take on the
       financing and regulatory risk.  We're just getting started but
       excited to be working with platforms such as Rappi and Sr. Pago
       already. We'd love to hear your thoughts on what we're building and
       on how we can improve so that we can finance a lot more SMBs in
       Latin America.
        
       Author : r97teran
       Score  : 35 points
       Date   : 2021-03-13 14:38 UTC (8 hours ago)
        
       | atlasunshrugged wrote:
       | This is really nifty but just making sure I understand, this
       | isn't exactly a factoring solution but rather something a bit
       | closer to a Square/Stripe integration that repays the money
       | directly with the companies' online revenue rather than by taking
       | ownership of an invoice?
        
         | r97teran wrote:
         | repayments adjust to how much the business had in sales via the
         | platform. So closer to what Square/Stripe offer in the US.
        
           | atlasunshrugged wrote:
           | Got it, very cool. Of course I assume you can also easily
           | create a little card reader for smaller shops/physical stores
           | so you can also track those sales and do loans based on that
           | too!
        
             | r97teran wrote:
             | it's possible! though what we've noticed is that there are
             | a ton of these card readers popping up in countries like
             | Mexico. They've got the distribution down, and have done a
             | lot of the legwork in finding these small businesses. we
             | really focus on understanding the risk to give them access
             | to financial resources often unavailable to them
        
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       (page generated 2021-03-13 23:02 UTC)