Levering tech to make life easier for LatAm's job creators
SMEs are generally seen as key employment generators. In Latin America, they account for about half of jobs.
In Chile and Argentina, lawmakers are working on initiatives to spur growth of their respective SME sectors and help players become more competitive. Chile, among other measures, wants to introduce a special tax regime for this class of enterprise while its neighbor, for example, is helping boost access to capital market and venture capital funding.
Chile-headquartered Nubox, a small business accounting software-as-a-service company, operates in these markets as well as in Colombia.
The firm, which in June announced the acquisition of Argentine player Colppy, is tapping this segment and is on the prowl for potential acquisitions in countries such as Peru and Mexico.
BNamericas talked to Matt Cole, Nubox's director of corporate development, about the company's focus, its outlook on embattled Argentina, and more.
BNamericas: What potential do you see in the small business sector in the region and why are you focusing on this area?
Cole: Currently, small businesses constitute the region's economic growth engine. Nubox believes in the importance of supporting the more than 16mn small businesses that, today, are transforming their countries and accounting for more than half of jobs in the region.
Nubox has become a strategic ally for these types of companies, permitting them to accelerate their digital transformation process and scalability of their operations. At the same time, the spread of new electronic invoicing regulations across the region means that small businesses need to have the technological capacity to comply with these, and a strategic ally that understands the limits and how to facilitate compliance.
Nubox saw in the market a completely unserved segment and decided to focus on it. In this way we fulfill our mission and vision of optimizing the administration of small businesses so that company leaders can invest more time in dedicating themselves to what drives them - the ideas that spur growth of their businesses.
BNamericas: What's your unique selling proposition?
Cole: Nubox offers administrative and accounting solutions in the cloud; targeted at accountants and small businesses. Nubox software services are simple and intuitive, with an implementation process that is reliable, fast, secure, scalable and backed by a 360° service that includes training, support and customer success executives dedicated to each Nubox client.
The needs of clients are our priority. For that reason we interact with our clients constantly to generate functionalities that they need and, in that way, provide them with world-class service levels. Nubox solutions not only permits entrepreneurs to control, improve and automate processes but also facilitate interactions with their entire ecosystem via integration with banks, clients, providers, the government and employees.
Today, it is the users that determine what their needs are and, based on their requirements, we develop an integrated model so that they can optimize their operations and have an agile and efficient means of connecting to the ecosystem.
BNamericas: In 2017, Nubox reported revenue of US$12mn and recently told us that the goal of the company is to more than double that figure in 2020 to reach US$25mn in sales. The company also aims to expand its direct client base to 50,000 from 12,000 currently. What is your strategy to achieve these goals and what could impede your plans?
Cole: Nubox's plans are founded on organic growth in the countries that we currently operate in - Chile, Colombia and Argentina - and on growth via M&A in large countries within the Latin American target market, such as Peru and Mexico.
We're constantly investing in the product, to include functionalities and services in anticipation and, maintain our position as a strategic ally of our users, establishing a relationship in which we listen and make continuous innovative improvements. That is the promise Nubox makes to those who trust in its solutions.
BNamericas: Argentina is a very important market in the region and the government is trying to spur the small business sector. In light of the economic challenges the country is experiencing, has your outlook changed?
Cole: Nubox has a long-term vision in each and every one of the markets in which it operates. Our vision is to expand in Latin America. Argentina is a very important market and no situation will affect our plans to continue investing in the country and expanding in the region.
In its 17 years, Nubox, like all companies that do business in the region, has faced different macroeconomic situations. In our case we managed to successfully weather them - for example, the dot.com crisis of 2001 and the financial crisis of 2008. We're committed to the region and continue investing so that Colppy, our subsidiary in Argentina, strengthens the administrative solutions that we provide in the region.
BNamericas: Have you noticed any trends in the region in terms of types of new business being formed, for example, IT companies?
Cole: It is now much easier to set up a new company. For example, in Chile it is possible to do it within a day. Today's entrepreneurs have access to technology that helps spur exponential business growth, such as cloud services, open source software, e-commerce channels as well as on-demand resources such as freelancers which allow them to scale their businesses on a regional level, and be more capital efficient. Also, access to seed funding via the likes of angel investors and accelerators is easier. In addition, new venture capital funds have shown much interest in the region. There has never been a better time than today to launch a new business in Latin America.
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