36氪_让一部分人先看到未来

A new emerging sample in a complex new land.

Author | Ren Qian

Editor | Liu Jing

In 2012, investor David Vélez left Sequoia Capital in the United States and moved to Brazil. Opening a bank account was the first challenging thing he encountered in this country: He went to a branch, got stuck in a bulletproof door, was escorted by armed police, waited for an hour before finally starting the process, and then returned to the branch six times. It took him five months to complete the account opening.

Vélez found it hard to understand why the largest company in the most profitable industry in the entire Brazil "treated customers this way". What shocked him even more was that this company also shut out more than 60 million people - in a country with a population of over 200 million, one-third of the people don't even have a bank account.

But this also led him to discover an opportunity. The following year, Vélez quickly founded a digital bank, Nubank. Eleven years later, Nubank, with 105 million customers, supports a current market value of more than 60 billion US dollars and an annual revenue of several billion US dollars (with a net profit of 360.9 million US dollars in the fourth quarter of 2023, reaching a historical high).

Nubank's rise is a large-scale experiment in the emerging continent. Just when Nubank received a 150 million US dollars investment led by DST in 2017 and officially became a unicorn, and in October 2018, it received a 180 million US dollars investment from Tencent, with its valuation soaring to 4 billion US dollars, a Chinese-American took a plane from Washington to Mexico City, 7,000 kilometers away from Brazil.

This person is Chen Bin. Chen Bin was born in China. After graduating from Fudan University, he went to the University of Chicago in the United States to study and obtained a master's degree with a scholarship, but his living expenses were always tight. Fortunately, a credit card company in the United States approved a credit card for him at that time, solving his urgent problem. After graduation, Chen Bin joined Capital One, which provides banking services to low-income people in the United States.

Chen Bin, who has lived in the United States for many years, and the other four co-founders also smelled the potential of Latin America. So, they brought Americans from Silicon Valley and Washington and locals from Mexico to establish Stori in 2018. The word Stori symbolizes being a part of the "story" of financial progress - accepting people with good or poor credit records and providing them with opportunities. The initial goal is straightforward: "To become a larger digital bank than Nubank."

In August 2024, six years later, Stori announced the completion of a new 212 million US dollars financing, which is its seventh round of financing. "Dark Flow Waves" has learned from multiple investors that there are at least 600 companies in the fintech field in Mexico, but Stori has become one of the largest unicorns among them.

Payment and inclusive finance are the collective pain points of Latin American countries. Mexico is probably the market with the best growth potential in fintech among all emerging countries. Here is a set of evidence: It is one of the few countries with a population of over 100 million and a per capita GDP of more than 10,000 US dollars; it is a manufacturing power highly tied to the US economy; it is one of the countries with the highest bank profit margins in the G20 (Return on Equity is close to 20%); with the acceleration of the industrialization, urbanization and digitalization processes of friendly-shore outsourcing, the penetration rate of financial services, which is currently relatively low, is increasing, and there is a large amount of unexploited user demand.

Exploring the growth history of Stori, a company co-founded by a Chinese-American, and how it has created a storm in this land will be an interesting sample for us to understand this charming but extremely complex new continent.

Seizing Gold from the Cracks

When Chen Bin initially brought his business plan to seek investment, the digital financial business in the Mexican market was not recognized by most investors.

Fortunately, a few investors observed that the two unified global markets - China and the United States each have their own advantageous areas. The United States leads in basic research, 2B innovation, and the venture capital ecosystem, while China excels in 2C and product operation. The foundation of Latin American countries such as Mexico is different from that of China and the United States, and the potential of digitalization and inclusive finance is huge.

Chen Bin worked for three companies for 17 years before starting his business: Capital One, BCG (Boston Consulting Group), and Mastercard, all of which had a profound impact on his later establishment of Stori.

In the history of American finance, Capital One is a name that cannot be bypassed. It started as a credit card company for middle and low-income groups in the United States. It took 30 years to develop from an insignificant regional bank credit card department to one of the top three credit card companies in the United States. Capital One occupies a place in the most successful global inclusive finance.

Capital One is also the "Whampoa Military Academy" of the Chinese Internet Finance circle. In addition to Chen Bin, Ye Daqing, the angel investor of Stori and the founder of Rong360, also comes from Capital One. Even David Vélez was able to establish Nubank initially because he is a good friend of the founder of Capital One and once secretly learned from him.

Capital One's success has two genes: making decisions with data and marketing methods. Capital One conducts tens of thousands of experiments every year (most of which are failures and have no effect), but the core purpose of doing so is to continuously test to find the most suitable, risk-controllable product types with good marketing conversion rates. Most of the elites from Capital One are highly intelligent and have a strong belief in data and logic, and they have carried this essence forward.

Chen Bin's work at BCG cultivated his strategic considerations. His time at BCG Asia was from 2006 to 2010, when many emerging industries were just emerging. "At that time, when doing projects, it was all about how to enter a new market and launch new products, and a lot of market analysis was needed." Chen Bin once recalled in an interview in 2020. If he reexamined what he predicted would happen in the Mexican market in 2018, "80% of it was correct, and this is the ability forged at BCG".

After that, Chen Bin became the general manager of a product line at Mastercard. This job gave Stori a stepping stone - the first primary member institution qualification issued by Mastercard to a Mexican fintech company. Before Stori, only medium and large-sized banks had the opportunity to obtain this qualification.

Chen Bin and his co-founders seem to have gathered "favorable timing, geographical location, and harmonious human relations", but the most crucial thing is that they seized the blank period of the market.

Just as the Brazilian banking system has been monopolized by oligarchs for many years, the Mexican banking industry has also been monopolized by foreign banks for many years. Calculated by asset volume, the five major foreign banks account for more than two-thirds of Mexico. Moreover, these banks only serve high-end people, while the demand for financial services from middle and low-income people is strong but often ignored by the traditional banking system.

In Mexico, wages are paid every two weeks, and at this time, everyone queues outside the bank, waiting to withdraw money. A very mature business model in the local area is Pay Day Loan, which relies on the borrower's work and salary records as the credit basis. The borrower promises to repay the loan and pay a certain interest and fee on the next payday.

The characteristic of this model is that the single amount is small, but the interest rate and repayment frequency are very high. Stori is not very convinced of this business model. Stori believes that the real long-term solution is to dynamically set the loan amount according to the actual credit situation of the user.

Over the past few years, many fintech companies have entered Mexico, but their business focuses are different. The high threshold of the credit card business limits the number of competitors and also provides development space for Stori - Stori first acquires a group of high-quality people, and for groups that temporarily do not meet the risk control requirements, it will provide subprime mortgages or higher-interest online loans.

"The entry barrier in this industry is really quite high. We are a very experienced team, and it took colleagues from three countries two years to develop the product." Chen Bin once mentioned. In 2020, Stori launched its first credit card product. Currently, there are still relatively few institutions in Mexico that provide digital credit card services. As the only credit card in Mexico with a 99% approval rate, Stori has 3 million users.

"It is easy to issue a credit card with a 99% pass rate, but there is a huge threshold and barrier to doing a good job of risk control for this group of people. Focusing on middle and low-income people is actually combining the accumulation and technology in the United States' Capital One with the product operation experience of Chinese fintech companies - such as how to combine the use of artificial intelligence for anti-fraud, to create a blue ocean in the huge mass population in Latin America." Chen Bin told us, "The opportunity is as great as Nubank's".

The Most Important Thing

Chen Bin's most recent public appearance was at an event of his investor BAI Capital. BAI Capital has systematically investigated the Latin American market and believes that Mexico is the third largest financial inclusion market in the world (per capita GDP x unbanked population), after China and the United States. Six of the nine unicorns in Mexico are Fintech companies.

In fact, Stori's valuation also increased significantly after the launch of its first credit card product in 2020. "Existing banks are very strict when issuing credit cards, rejecting about three-quarters of applicants, but 99% of our customers can get credit cards." Chen Bin said.

The profit margin of the Mexican banking industry is one of the highest in the G20 countries. There are several core reasons. First, the industry concentration is high, and it has always been a market with a high interest rate spread. Mexico is a country with a free market pricing system. The interest that banks lend to borrowers is much higher than the deposit interest that banks give to depositors. In China, the credit card interest rate is legally 18%.

Second, users have a strong demand for borrowing. According to Chen Bin's observation, the revolving credit rate of credit card users in Mexico (meaning that a considerable part of the monthly credit card balance rolls over from the previous month, and users have to pay interest to the card issuer) is very high. In contrast, the revolving rate of credit card balances in China is relatively low (about 25%) because Chinese people are more willing to save money. Of course, a market with a high revolving credit rate requires a high ability to control bad debt risks, otherwise it will be outweighed by the losses.

In addition to credit cards, after obtaining the Sofipo regulatory license approval in October 2023, Stori also launched a deposit product - Stori Cuenta+ with an annual interest rate of 15%, helping depositors of all income levels in Mexico increase their earnings.

According to "Dark Flow Waves", the interest paid by Stori for savings deposits is significantly higher than that of traditional banks, whose interest rates are usually lower than the inflation rate. Stori is significantly changing the conventional thinking of Mexican users that "deposits can only be in banks" and "deposit interest rates are low, and the more you save, the more your money depreciates". The number of customers has increased from 1 million in 2022 to 3 million now.

It is also understood that since Nubank fully entered the Mexican market, it has shown an aggressive momentum to keep pace with Stori. The difference between the two is that Nubank chose 15% of the high-end users in Mexico, while Stori targets 40% of the middle-income group - but although the initially targeted groups are different, with the intensification of competition, there is also an overlap.

Chen Bin believes that Stori has done several things right to stand out among more than 600 fintech companies:

First, Stori adds AI and machine learning on the basis of Capital One's credit reporting data modeling, and has undergone multiple iterations after landing in Mexico. It is understood that its risk control performance has improved by more than 30% compared to the local credit bureau's model score. In addition, Stori's anti-fraud technical means is also the reason for the significant improvement in the credit card issuance efficiency.

In terms of business model, in order to reduce the usage threshold, Stori waives the annual fee - in contrast, the average annual fee charged by mainstream foreign banks is as high as 40 US dollars. Coupled with the interest and the handling fee generated by each transaction, the profit margin of credit cards in the Mexican market is several times higher than that in China.

The second is a complete localization. When Chen Bin was looking for partners at the beginning of his entrepreneurship, he put forward a requirement - to spend half of the time in Mexico, and 50% of the time every month, "otherwise this thing won't work". Currently, the five partners of Stori come from well-known financial institutions and technology companies in the United States and Mexico. They are a typical global co-founding team and also top talents in Latin America. For example, its CFO once served as the second-in-command of finance at MercadoLibre, the largest listed technology company in Latin America, and led DLocal, the largest payment technology company in Latin America, to a successful listing as the CFO.

The technical advantages, innovative financial products, localization strategies brought by the team background, and international capital support have jointly contributed to Stori's rise in Mexico.

In July of this year, Marlene Garayzar, the co-founder of Stori and the first female entrepreneur to establish a "unicorn" in Mexico, announced that Stori will invest 380 million US dollars in Mexico to promote financial technology innovation and inclusive finance. Opening a bank account is an essential step towards economic independence, giving people the ability to manage their own wealth, make investments, and enjoy the fruits of their labor. It is understood that a large number of women will be among the beneficiaries.

Before the AI Storm

In early 2024, Capital One announced that it will acquire Discover, a large American credit card issuer, in a 35.3 billion US dollars all-stock transaction. This is a landmark event - after the merger, it may become the third largest credit card company in the United States (after JPMorgan Chase and American Express).

Capital One single-handedly facilitated this marriage that stirs the US financial landscape, with a fierce momentum. Among the top ten banks in the United States, nine are century-old stores, and only it has risen in the past 30 years.

A former Capital One employee and an early investor in Stori told "Dark Flow Waves" that the success of Capital One is not only based on data-driven innovation - from issuing credit cards to marketing, collection, and credit evaluation, every link is inseparable from the in-depth exploration and analysis of data. "He (Fairbank) is over 70 years old, and he talks about data as soon as he opens his mouth."

More importantly, "They have been exploring new business models and product forms, such as thinking about how to use AI to solve the problems of end customers."

In 2020, it became the first bank in the United States to fully adopt cloud technology, and now it is sparing no effort in creating a modern data ecosystem. It is understood that Capital One has even established an internal technical team of 14,000 people and popularized AI in every part of the business through a human-machine collaboration process.

Capital One is almost the spiritual totem of all Internet finance companies - this effective method and innovation have also been competed to learn and imitate. Stori also continuously iterates on the basis of credit reporting data modeling using AI technology, improving the credit review ability, and its approval success rate is several times that of traditional banks.

In 2023, when Silicon Valley Bank collapsed and the US financial industry was impacted, Buffett invested in Capital One. He also invested in Nubank twice, with a total of 750 million US dollars. The latest news is that Buffett has sold his shares in Bank of America since July this year and has made a profit of more than 10 billion US dollars - this existence that Buffett has been investing in since 2011 and increased his holdings in 2017, regarded as the "ballast stone" in his investment portfolio, to some extent proves the unpopularity of the traditional financial ecosystem.

The Bank of America has a history of more than 200 years, and the biggest feature of its retail bank development path is that it has achieved the transformation from checks to credit cards with the rise of the Internet; while the development path of China's retail banks is to seize the era of the mobile Internet, and the mobile financial services such as Alipay and WeChat are developed. However, the background of Latin American countries such as Mexico and Brazil is not exactly the same as that of China and the United States.

The above-mentioned investor told us that the rise of AI will indeed bring huge changes to the local financial services, and that all countries in the world are at the same starting line in the application of AI in finance. "This is the real opportunity for Latin American fintech companies

This article is originally produced by「任倩」， For reprint or content cooperation, please click Reprint Instructions ；Unauthorized reprint will be held accountable.