Entrepeneurship and growth in Colombia An interview with Mateo Bolivar

Mateo Bolivar  is a Tech entrepreneur with a business background, he founded two startups before turning 20 and shares with us a bit about his experiences and challenges in the process!


Tell us about yourself

I am a 22-year-old Colombian entrepreneur and I have had the opportunity to found two technology companies. Both solutions seek to make products and services more efficient for service industries. The first one is focused on managing the systems of shifts and lines in banks, public procedures, eps (health promoter entity), and restaurants, and the second one is communication software for the hospitality industry, especially focused on hotels and hospitals.

How has your experience been as an entrepreneur in Colombia?

I started without knowing anything about the ecosystem or without knowing our capital, but I started to get into the subject with the sole intention of learning and being more qualified. That helped me a lot in the local ecosystem, knowing that in Colombia entrepreneurship training is highly encouraged so that people are encouraged to do it, there are many inspirational cases where you say “Wow if this person could, I can too.” The local ecosystem in Colombia worked well, but not so much when it came to raising capital, because the valuations here are not in line with the rest of the market in Europe, Asia, or the United States, for example. 

In these places, normally, you can say that a company is valued at one or two million dollars without having to have a lot of traction behind it. If here you say the company is worth 400 million pesos, people are going to ask you for a lot of things to support it. When the global ecosystem is not necessarily like that in the early stage, there is not as much investment capacity for later-stage companies either. The vast majority of companies, to scale and raise more capital, end up forming their legal entities either in the United States or they end up opening in other countries in Asia with Colombian entrepreneurs who have founded in Asia, or my particular case, I ended up founding in Switzerland. So, it is a very good ecosystem from the conceptual part and connections, but as infrastructure to grow financially is not ideal, the market does not have so much ability to pay- In general, in the venture capital market there is not much flow of capital, so only a very small group of large companies are those who always take the investment capital, but those who are as at the bottom of the pyramid are left halfway, the tax part is also a bit complex here compared to other countries.

How would you describe the process to receive funding?

It is very bureaucratic and requires too much support, more than necessary. The ecosystem in Colombia is designed for traditional companies, which have very large inventories and are mostly in the real sector. Therefore, when you are going to receive an investment you are thinking about the present value of the company or at most a projection with a projected cash flow of one or two years at most, so you are talking about the assets you have at that moment. However, the theme of early-stage startups globally is oriented on future projection, so if there is an idea that makes sense in the market and can ring at the end of the day, it’s very easy to be able to say “ready, this is worth a million dollars and I’m going to raise investments on these valuations.”

When investing in these ideas, and thinking about future projections here in Colombia, the vast majority of companies can only receive investment by shares, buy direct shares, and at the time supporting that before the Chamber of Commerce, or before the DIAN you have to explain why you are giving that valuation. Here I have had a lot of problems trying to support the valuation of companies because they say “you are not even selling at the beginning, how are you going to say that your company is worth x million pesos?” So it’s a bit complex, which makes it not so attractive to investors. On the other hand, on the subject of Tax Reform, there is a lot of talk about that topic and they say that they wanted entrepreneurs or shareholders to pay the value taxes on the intrinsic value of the shares, which means that if you say that the company, is worth one million dollars and you sell 20% for 200 thousand dollars and you as a founder have $800,000, you would have to pay taxes as if you had 800 thousand dollars in the bank, which is completely absurd. That was a tremendous debate, and it was making many people want to leave Colombia and not found companies here. Now they are trying to make some exceptions, modifications to the rules, and so on. That is very roughly what I see in terms of receiving investment, it is not designed to receive much foreign investment, the foreign investment that is designed in Colombia is for oil industries, sometimes creative, even the same tourism sector, hotel construction, real estate, all that kind of things, but what has to do with technology or the world of startups, the truth is a little out of context, then I have to do a lot of crazy things and find gaps in the middle of things so that things can work.

How was your experience in the shark tank? What happens behind the scenes that people don’t see?

It is super interesting because when you go, they train you before, you talk to a lot of mentors, some people are explaining to you how the process of doing a Pitch works, a valuation of a company and you are in there for more than an hour almost, the chapter is 10 minutes long, you can imagine that they cut out a lot of the conversation. It is something worthwhile, it is a unique experience, you feel very nervous, not only because of who is in front – because some of the most important investors in the country are there – but also because you are surrounded by 20 cameras focusing from all angles. I was nervous, you can see it in the video, but it was a very good experience. From then on, more and more doors opened for me and the experience was great because you just finished recording the episode and you greet each one of them and you follow up with them outside the program to verify that what you said is true.

Regarding the two applications you have, we want to go a little deeper into the services you offer!

E Line is a virtual shift and queuing system. What we are looking to do is that whenever a person is waiting for a product or a service, they do not have to be physically in a space or do not have to have an additional device in their hand, but rather they receive notifications to their phone to know when to return for the turn or to the place in line and that they can take advantage of that time in the best way. The idea is to connect the store with the end customer. In the beginning, we wanted to do it with an app, but after a lot of money lost, time and tears we realized that this was not going to work, so we changed the model to notifications via text messages, WhatsApp, and phone calls, and today it is finally taking off after a lot of learning.

With Contler, we offer a digital concierge platform for hotels. The concierge, within the Hotel, is who is responsible for managing all requests from guests whenever you need something, they are ready to have the ideal concept of the hotel, which allows to digitize the entire supply of products and services of the hotel and centralize everything that the hotel has for you, all the information you need to know about the hotel and have the ease of, if you need, from a towel to maintenance, room service, everything is integrated into a single platform. So, we do it in a scalable way, basically allowing any hotel, anywhere in the world, in a matter of minutes, to have their platform and be able to improve the service they are providing to their guests. It’s replacing all those paper brochures that you get on the phone in the rooms and everything can be managed through smartphones so that, in a matter of seconds, you just scan a QR, you don’t download anything on your phone, and from a web page and it sends notifications to housekeeping, maintenance, food, and beverage reception and they take care of operating internally, we are a point of rappi of the services of a hotel.

Anything else you would like to share?

The process of the two companies has been very interesting, the second company is incorporated in Switzerland. I arrived in Switzerland and I saw people who speak five languages, they have all the technology in the world, they are practically millionaires and I thought “what am I going to do here?”, even my level of English was not good enough until an investor told me for the first time “Well, what do you need, do you need money? I’ll give it to you.” She had to say it to me. Many times that happens to us as Latin Americans, we believe that the rest of the world is at another level of development and it is not so, at the end of the day opportunities are for those who look for them, are proactive, able to build them and work for them. I was very surprised to open a company in Switzerland when I was 20 years old, to gain the trust of these people, to sign documents in a language that I did not even understand, to be the legal representative of a company in a country that was the first time I visited, it seemed to me a total madness. More in the context of the pandemic and so on, those are the kind of things that entrepreneurship is.

In addition, I think it is nice that there are all these initiatives to connect ecosystems, at the end of the day the only thing it does is to connect, here there are people with a lot of potentials, with solutions that can make more efficient or improve the industry in another country, and on the other side there are people with a lot of capital that cannot find a place to deploy it, so it is a good match of supply and demand in that sense. Many have been doing it for years with the United States or Europe, but in Asia, it is interesting what they are doing and also in the whole Arab world with a couple of companies working on it right now and it is very interesting that the world is becoming more globalized and interconnected because that is the magic of technology, that what is born in the living room of your house can reach any corner of the world and that is what excites me and where I hope the company will reach in a few years.