Global Financial Solutions for E-Commerce and Amazon Sellers | Ricardo Pero

Episode Summary

In this Prime Talk Podcast Sponsored by GETIDA – Ricardo Pero Founder and CEO of SellersFunding - The all-in-one financial solution platform designed for growing ecommerce merchants, talks about Global Financial Solutions for E-Commerce and Amazon Sellers, also more information about his life's journey. #sellersfunding #amazonsellerfunding

About Ricardo Pero of SellersFunding -  Changing the way ecommerce sellers scale their business. SellersFunding relies on the idea that ecommerce is changing the landscape of retail globally as upcoming technologies change the way consumers behave. This continually evolving ecosystem naturally creates new challenges that traditional institutions have trouble understanding. That's why SellersFunding developed a complete Financial Platform tailored for ecommerce to help merchants to grow and scale their business.

Find the Full Episode Below

Yoni Mazor 0:06
Hi everybody, welcome to another episode of Prime Talk. Today, I'm really excited to have a special guest. I'm having Ricardo Pero. Ricardo is the founder and CEO of Sellers Funding, which is a leading financial services provider for eCommerce businesses. So Ricardo, welcome to the show.

Ricardo Pero 0:22
Hey, thank you for having me here.

Yoni Mazor 0:25
Our pleasure, really. So today's episode is going to be the story of Ricardo Pero, all about you. You're gonna share with us? Who are you? Where are you from? Where were you born? Where'd you grow up? Where'd you go to school? How you begin your professional career station to station until where you are today, especially with the world of eCommerce? So without further ado, let's jump right into it.

Ricardo Pero 0:45
Yeah, I'm originally from Brazil, moved to the US back in 2000.

Yoni Mazor 0:54
You kind of jumped very quickly when you said Brazil, wherefrom in Brazil?

Ricardo Pero 0:58
I'm from the south of Brazil from a small town called Porto Alegre. But don't say to the folks that live there that Porto Alegre is small because they won't take it.

Yoni Mazor 1:09
Yeah, that's the only place in the world for them so why not it's the biggest and only place. A Porto Alegre if I'm not mistaken, means the happy port, right?

Ricardo Pero 1:15

Yoni Mazor 1:18
Any story about that, or anything special about that?

Ricardo Pero 1:22
No, it was one of the main entrances when you know, in my home state, you have a lot of European folks migrating after World War I, migrating from Germany, Italy and I guess, became a happy port for them.

Yoni Mazor 1:53
Yeah, immigrants, I guess, are happy to find America. In this case, it is South America, Brazil, and its beautiful landscape, and I've been to Brazil, it's heaven on earth. You know, it's very exotic.

Ricardo Pero 2:08
It's a big country with a lot of differences among its regions. So it's like the US is a continental country.

Yoni Mazor 2:17
Yeah, that's what they say. It's almost the same size as the United States without Alaska. So that's impressive. Okay, so you were born and raised in Porto Alegre, but that's where you went to school but in elementary school, high school, college?

Ricardo Pero 2:31
Yeah, I spent most of my time there. My dad was an executive for an oil and gas company. It was an independent company called Ipiranga. The company got acquired by Petrobras later, and my dad was appointed to develop their business, you know, Regional Sales Manager for the company in the Northeast of Brazil. So when I was about eight years old, I moved to Fortaleza in the Northeast. Nice, weather is similar to Florida. But then we spent five years there, came back to my hometown. Then my dad got sick and passed away when I was 20 years old.

Yoni Mazor 3:37
Are you being at university or school or what were you?

Ricardo Pero 3:43
I was finishing my first year when he got sick.

Yoni Mazor 3:49
And which university?

Ricardo Pero 3:53
Federal University, it's kind of the opposite compared to the US. In the US where the federal universities are the best ones, and they offer for free. It's really hard to get into but they are for free.
Yoni Mazor 4:05
It means that the university is controlled by the state because it is very affordable, not free. It's very prestigious to go there and you have the people with the best grades only kind of able to come in and then the private colleges are giving an opening for an alternative, but you have to pay the cost.

Ricardo Pero 4:31
I am graduated in economics in my first year after I got the news that my father was sick. I started working full-time during the day and going to school at night.

Yoni Mazor 4:46
Why did you financially have to start working?

Ricardo Pero 4:49
I just started to, I mean, I started working with my family. My family had a farm, and I have cousins that run an auction business since I was like 12 years old, I used to travel with them to work in these auctions with so cattle, sheep, horses whatever you can imagine.

Yoni Mazor 5:13
So you there in a farm you have all the sheep, cattle, livestock, you take it to probably hours if not days away. What do you do? Go to the market, to the city, what's usually the arrangement?

Ricardo Pero 5:25
They drove me to all these like huge farms and we work on the auction, basically, there were other farmers going into the place...

Yoni Mazor 5:42
You just facilitating the sale.

Ricardo Pero 5:45
Yeah, that was my first experience.

Yoni Mazor 5:48
You like an eBay or Amazon, you're the marketplace, you're bringing the sellers and you facilitate the sale. That's pretty cool.

Ricardo Pero 5:56

Yoni Mazor 5:57
You didn't provide any funding back then?

Ricardo Pero 5:59
No, not then. But I start thinking about it because they actually had a business that finance the buyers like so it runs in the family. Let's put it this way.

Yoni Mazor 6:13
So interesting, unique. I didn't see this coming. So you started to work. You're 20 years old. You're learning economics at Federal University. What's the next station for you?

Ricardo Pero 6:25
So I started working for a Brazilian multinational company. It's one of the top ten producers in the world, actually, Gerdau..

Yoni Mazor 6:41
And what do they produce?

Ricardo Pero 6:46
They have many mills, and they produce steel for civil construction. Back then, I started as a treasurer.

Yoni Mazor 6:57
But let's start there. So what year did you graduate and begin your professional career?

Ricardo Pero 7:02
During school, I was working full time. At 21 years old, I became the international treasurer for that company, responsible for their international cash management. They had companies in South America, Canada and the US.

Yoni Mazor 7:21
And that's kind of crazy. I think your first job you're a treasurer of a multinational company for two years. That's remarkable and something special.

Ricardo Pero 7:31
Yeah. I believe they saw something, not even I will see so.

Yoni Mazor 7:39
When was that when you started there? What was the year?

Ricardo Pero 7:42
That was 1992.

Yoni Mazor 7:46
In 1994, you already became the treasurer. Okay, so what was the next station or how long did you stay in that position?

Ricardo Pero 7:54
I stayed there for six, seven years. And then I moved to the US in 1999. End of 1999, I got involved with Citibank.

Yoni Mazor 8:10
Okay. So talk about, what was the whole thing that happened? What was the opportunity?

Ricardo Pero 8:15
In that company that I worked for; I had an idea. We had some euro bonds, denominated in dollars, and I remember that back then, the US Dollar was strengthening against major currencies, and I remember that the Japanese Yen was one of the currencies that the forecast was devalued against the dollar. And I came up with an idea to swap or actually to swap the existing dollar-denominated that and to yen-denominated…

Yoni Mazor 9:02
For the steel company, right?

Ricardo Pero 9:04

Yoni Mazor 9:05
And by doing that, that can reduce the debt dramatically.

Ricardo Pero 9:08
So that transaction allows the company to save two years of interest expenses. It was the biggest transaction from a Latin American company with Citi in 1999.

Yoni Mazor 9:26
So this is for the steel company that had this credit facility with Citibank, and they basically came up with the transaction. It was the biggest transaction for a Latin American company within the bank.

Ricardo Pero 9:36
Yes, and after the transaction, I was going to be the first executive of the company to be sponsored to study here in the US. But then I decided okay, I want to go to the US, I want to have a full experience. So I want to work for a US Company, live in the US, and I spent a couple of years and then move back to Brazil. I still have a very good relationship with the family who owns the company and then I decided to resign instead of taking my MBA, which is sponsored by the company. Citi offered me a job where I would spend one year working for Citi in São Paulo, and then move to the US and after that, they would help me with my studies applying for an MBA..

Yoni Mazor 10:38
Sound like you made the transition from the steel company, Gerdau so one year with Citi in São Paulo, 1998 to 1999, and then you made the transition to the United States.

Ricardo Pero 10:49
Actually, no, I left Gerdau in 1999. And instead of spending one year in São Paulo, I spent one month and a half. Because one of the traders who covered Latin America resigned and they asked me to move temporarily to help cover that position and I'm still here temporarily since then.

Yoni Mazor 11:27
22 years after that. So just to clarify when you started in São Paulo, and then you move to the United States, what was your position there? What were you?

Ricardo Pero 11:34
So I was a sales trader, I was working with FX interest rate derivatives.

Yoni Mazor 11:46
Foreign exchange derivatives. Got it. You moved to the United States, do you move to the Queens New York office or...?

Ricardo Pero 11:52
No, it was located on 53rd in Lexington at the Citicorp Center. But one year after that, in 2001, Citi was acquired in 2001 or 99, I don't remember by Travelers Group. And Travelers on to investment banks, Salomon Brothers, and then acquired Smith Barney. In 2001, they decided to do a JV, leveraging Salomon Brothers and Smith Barney's investment banking capabilities with Citibank, Commercial Banking.

Yoni Mazor 12:40
The joint venture is about, they already own all these financial institutions, but they want to construct them together, where you have regular commercial banking with Citi right to appeal to the masses. And then Smith Barney and Salomon Brothers, which is more wealth management for the banking. That is kind of standard, because you have this with Chase and JPMorgan, or you have this with the Bank of America, Wells Fargo. I'm not sure about other institutions. That's kind of the design. Were they the first who did that, or they're following somebody else's trend?

Ricardo Pero 13:09
I think that they were the first to do that on a major scale, combining investment banks and commercial banks. I think the only success story is JPMorgan Chase, Bank of America, I think that they did a fair job with Merrill Lynch.

Yoni Mazor 13:32
Yeah, just want to clarify, they kind of had to swallow them in 2008 when everything...

Ricardo Pero 13:36
They were not willing...

Yoni Mazor 13:43
They kind of bought, you know, a problematic situation with them and fix it and solve it. And I guess they kind of did because I know it's pretty stable, and all that liquidity and their assets and their book seem to be much healthier than 2008, in which a lot of it was toxic. Okay, let's jump back into 2001 Citibank, he said the whole shift of change happened so?

Ricardo Pero 14:04
We started this JV; I was in charge of the Brazilian group. We took a business that had no revenues, and we multiply that by like 15 times in three or four years, then I became in charge of Latin America.

Yoni Mazor 14:22
What did you do in Brazil and Latin America, what was your mission?

Ricardo Pero 14:25
Mainly derivatives trading. When I left we were trading every asset class that we are talking about bone sack which is the derivatives foreign exchange and in commodities futures.

Yoni Mazor 14:39
Just for the sake of the audience listening so you know, commodities, foreign exchange rates, and derivatives. Let's talk about that for a minute. I want you to, if possible, explain the concept of derivatives to people listening.

Ricardo Pero 14:52
So it's usually when you have a derivative like a name says, is a private contract between two parties, usually the bank and one of the bank's clients when they take a piece of a public traded investment vehicle, and they break that down into different pieces. So for example, I'll give you an example of the first section that I structure. There were dollar-denominated bonds with a fixed coupon. So a company had a fixed cost. Let's say the cost was 10% a year.

Yoni Mazor 15:41
That's the interest cost for the interest rate.

Ricardo Pero 15:43
Yes. So, when you can break that cost into a fixed cost and a variable cost. In the US, contracts are usually linked to either LIBOR or, Prime, borrowing. And usually, you have the spread over Prime or LIBOR that reflects the credit risk. We are getting very technical here, but...

Yoni Mazor 16:33
I'll try to package it, you go on.

Ricardo Pero 16:36
In the US, now we have an outlook for the economy, we see inflation as a potential risk, or we saw that prior to this latest variant, but so when you see inflation picking up in economic forecasts, there is a higher chance that you're going to see higher interest rates picking up in the future. If you have debt, that is fixed, there is nothing to be done. If you have that, that is variable linked to LIBOR or any other index, you want to fix that because you don't want to overpay for the future...

Yoni Mazor 17:31
You want to stabilize it, you don't want to have an exposure in the future instead of having 10% interest or you have 30%.

Ricardo Pero 17:37
Correct. So that's where a derivative can be useful.

Yoni Mazor 17:43
So what does the contract say?

Ricardo Pero 17:45
The contract will say that instead of paying, let's say I'm paying LIBOR plus 8% now.

Yoni Mazor 17:55
Let's say labor's 2%, 8%,10% you know, that's your mind.

Ricardo Pero 18:00
Yeah, well, instead of paying LIBOR plus 8%, I'm gonna pay 10%, fixed for five years. And that's a contract between you and the bank. So the bank is taking the risk, that LIBOR may go higher than 8% And you already locked your cost of funds at 10%.

Yoni Mazor 18:24
Got it. Okay, sounds like, for this specific case, the derivative plays a useful instrument to hedge your position. So you get your exposures limited until to a certain degree, the bank gives you a contract or derivative contract that can help to facilitate that. And you developed all of that to see, I just want to dive into for a moment because these is sophisticated financial instruments that are played on a massive scale of billions or trillions of dollars on the global economy where you basically branch it out. In the Western world, they say, you know, in London and New York, that's pretty common. But you said, you pave the way for these instruments to be introduced to the Brazilian economy, and bring it into play.

Ricardo Pero 19:07
Yeah, so that's how I started my career.

Yoni Mazor 19:13
I mean, how do you sell that? I'm just saying, come to Brazil guy. Check this out. Yeah, this is not so easy, but it sounds like you did 50. Next on this was pretty impressive.

Ricardo Pero 19:22
Yeah, you need to actually start from a point. Try to understand what your client needs. I always took that close to my heart, because it's all about understanding the risks and what your client needs and that's the best way to start a conversation.

Yoni Mazor 19:46
Basically, you came into this land of Brazil, and then in Latin America, you see the challenges that they're facing, what kind of instruments or solutions we offer them, explain to them, and give them an opportunity to test it out. And of course if it works, boom, that's when you get growth.

Ricardo Pero 19:59
Yeah, and we are talking about the region where capital markets are still very underdeveloped even today. I would say there are some sectors like the fixed income sector or bonds, which are predominantly exposed to governments. I mean, locals don't have too many options.

Yoni Mazor 20:23
The private market is not utilizing what's available or essential.

Ricardo Pero 20:28
Of course, it's way better than it was 20 years ago, but still, there is a lot of room to improve.

Yoni Mazor 20:34
By very quickly, I'm not sure. What do you think that is? Well, how come they're not adopting this yet?

Ricardo Pero 20:40
Unfortunately, you see in Latin America today. It's very unstable, economically speaking. You have countries like Argentina, you have Venezuela, you have Ecuador, I mean, they are still in a big problem with corruption even so Brazil. I wouldn't say this government is as corrupt as the previous one but it's very incompetent. So it's more about the lack of rules...

Yoni Mazor 21:28
Yeah, for this to succeed, it's very sophisticated, you know, a few fundamentals to be so strongly we calibrated, then it's not ready yet still in the works.

Ricardo Pero 21:36
In my home country, Brazil, the private sector is strong and very active and very competitive but has to deal with, you know, it's already tough to compete on a global scale. You need to compete on a global scale, and still be always concerned about what the government will do locally. I mean, it's an extra layer of challenge. It's hard to..

Yoni Mazor 22:04
So some multinationals and other sophisticated players would rather just avoid altogether and set their bases and their main structures in more established economies. Okay, so let's fast forward to what you'd done, I mean, you started 99 in Citi...

Ricardo Pero 22:19
And then I left Citi in 2007.

Yoni Mazor 22:23
So up till 2007, that's when you basically developed Brazil and Latin America. Did you leave before the crash, after the crash, I mean?

Ricardo Pero 22:32
I would say, at the start of the crisis, I saw a lot of my peers leaving the company. It was already a good sign that things were not doing okay, there. But I didn't have a green card, now I'm a US citizen. But I had a very interesting story applying for a green card. Every time that I apply for a green card, something bad happened in the world.

Yoni Mazor 23:00
Like what? Give us a few examples?

Ricardo Pero 23:02
I apply in August 2001.

Yoni Mazor 23:07
Yeah, so before 9/11?

Ricardo Pero 23:10
Well, then I applied in 2007, and we had a financial crisis. I finally got my green card in 2011. I remember talking to all my friends saying, guys, something bad may happen because I'm applying again for a green card.

Yoni Mazor 23:29
So you shifted away from Citi, where'd you go? What was the next day's station?

Ricardo Pero 23:37
I went to be a Bank of America for two years, Merrill Lynch, Bank of America. There wasn't a bit of the crisis that was very unstable. I was hired to build a business from the ground up, like a similar business that I do at Citi. Of course, the project didn't go through. I had like six bosses in 18 months, very unstable and up at JPMorgan.

Yoni Mazor 24:10
It was 2011.

Ricardo Pero 24:16
I went to JPMorgan, 2009.

Yoni Mazor 24:19
You mentioned Bank of America. So Bank of America 2007-2009 and 2009 JPMorgan, got it.

Ricardo Pero 24:24
And then I left JP 2016.

Yoni Mazor 24:27
Oh, wow. For seven years, what did you do there?

Ricardo Pero 24:34
The same that I always did, working mainly with Brazil. JPMorgan is a fantastic place to work. I mean, Citi pre-crisis was a great place to work.

Yoni Mazor 24:51
JPMorgan same routine in New York City.

Ricardo Pero 24:54
Same thing in New York City. Slightly different because you know, the first 10 years I lived in Manhattan then I moved to Connecticut and only 10 years in Connecticut, so I was doing the commute, my workdays were a little longer.

Yoni Mazor 25:10
Yeah, you took the train or car?

Ricardo Pero 25:12
A train.

Yoni Mazor 25:12
You used to work on the train, read or rest, what was your routine?

Ricardo Pero 25:16
Usually, clean up my inbox on the way and watch some movies or stuff on the way back.

Yoni Mazor 25:31
It sounds like you're productive.

Ricardo Pero 25:32
I was good, you know, 15 minutes to just clear through my mind and go back home and play with the kids and enjoy a little bit.

Yoni Mazor 25:44
That's great. Okay, so JPMorgan, you put the footprint in Brazil, Latin America. Was that successful for the most part, or is it more successful than Citi?

Ricardo Pero 25:53
It was the same idea. I mean, JPMorgan already had established business there. They had a strong presence. When my youngest daughter was born in 2010, I decided to move to Brazil. Tried to move back then. My now ex-wife, you know, our family had a business, and her father had a heart condition. So the idea was to decide to give it a try. Raise the kids close to the grandparents. I couldn't stay there.

Yoni Mazor 26:37
This is again for Porto Alegre?

Ricardo Pero 26:40
No, it was Sao Paulo. I was working for JPMorgan.

Yoni Mazor 26:43
You kept your job and want to relocate to Brazil. Interesting.

Ricardo Pero 26:52
Yeah, we stayed there for two years. I couldn't stand Brazil, honestly. It was too corrupt. I mean, I didn't want to raise my kids there.

Yoni Mazor 27:02
It's Funny. Could you say 2010 to 2012? When you apply for the green card in 2011, you were outside?

Ricardo Pero 27:16

Yoni Mazor 27:17

Ricardo Pero 27:18
I was employed.

Yoni Mazor 27:20
Maybe that's why it worked. You're finally outside the US you applied, that's why on the outside of works better. Got it. Very interesting. So let's jump forward to 2016. Take us there, what's your next station?

Ricardo Pero 27:32
So 2016, I knew two things. I was fed up with the big bank environment, I wanted to do something different. I wanted to learn something different, but also apply some of my experience in finance. I ended up just doing a few jobs here and there. Then a friend of mine gave me a call. He started selling his products on Amazon and saw his sales raising, from 50,000 to 500,000 a month in three months' time. He called me and said Ricarda, I need to understand a few things. I need to understand why Amazon is charging me some fees and not paying me. I mean, they're holding my payments, I need to revamp and reorganize my finances and I need to find a way to finance my growth because my budget is gone. Long story short, he was looking for working capital.

Yoni Mazor 28:48
So yeah, he's hyper-growth. He doesn't understand how money is going to but once you do understand that, you know, when the money gets tangled with all these locations, in the meantime, while we got to keep the wheel spinning, I need the working capital.

Ricardo Pero 29:03
And then back then, and we have talked about 2016 and even today, I mean, merchantly, they have a few options, they have merchant cash advance options. They're quite expensive.

Yoni Mazor 29:22
So cash advances, for example, just to make it simple, 90-day loan, six-month loan..

Ricardo Pero 29:29
Yeah, it was all this revenue-based lending. So most of our competitors, they offer that product. We're starting to offer that product as well but it's a short-term solution. Usually, you borrow the...

Yoni Mazor 29:47
Say you generate 100,000 a month of revenue. So what's usually the fix for that?

Ricardo Pero 29:52
You're gonna get a loan that is going to be about you know, $50,000-$60,000 and you're going to pay back as a percentage of your revenue in the next three months, four months.

Yoni Mazor 30:06
I think Amazon also has a product like that. They offer third-party sellers a loan until you payback.

Ricardo Pero 30:16
Amazon offers is what we offer, instead of being a percentage of revenue that has a fixed amortization.

Yoni Mazor 30:23
Amazon says no matter what, you have to pay us back, a fixed amount in the next 90 days, whether you make the sells or not, it doesn't matter to us, we need that money back.

Ricardo Pero 30:32
Because when you're talking about a flat fee for a product that you need to pay back in three months, sometimes you get misled by the low flat fee. And you know, we're talking about 4%, 5% but when you annualize that, you know the API is over 25%.

Yoni Mazor 30:56
Yeah, that's usually how it's packaged, say, from this 100 grand, we're gonna give you, we're gonna pay 4% back, you're gonna pay us back 4,000 in 30 days, for example, the APR is a lot. It means you pay like 40% or something like that, right because 4% times every 30 days, you got 12 months.

Ricardo Pero 31:15
You paid daily if your sales go up, you're gonna pay back in a much faster way. And you need to borrow money again. The effective cost of money is way higher.

Yoni Mazor 31:31
I want to go back to your friend, you realize is working capital needed to take us there.

Ricardo Pero 31:35
So we ended up doing a capital raise. What caught my attention was I went to talk to banks. And the first, you know, banks that I approached, were my former employers. I went to Citi; I went to JPMorgan. I went to Chase, Citi, and Bank of America, and to my surprise, they had no clue. I mean, completely different. I mean, usually banks they work with like, a toolbox. They ask for a personal guarantee. If you have good credits, then you may end up with a personal loan, but I mean, they don't understand eCommerce, they don't know. I saw that most merchants were financing their growth out of their personal credit cards. So I said that there must be an opportunity here and I start digging and in the end, it took me about six months to finalize my assignment as a consultant and part-time CFO for the company.

Yoni Mazor 32:52
The company was selling on Amazon, your friend. So basically start working for them. It wasn't like on the side, you kind of figure it out to say, hey, check this out, you became a CFO so six months, you played the role there, and then what happened?

Ricardo Pero 33:07
I had an idea of why don't start a private lending company because if you guys cannot figure out a way to finance your growth, imagine all the thousands of sellers out there that don't have the business expertise that you have, that are looking for a viable solution to keep up with their growth and they were pretty open. I mean, in the beginning, the whole idea was to create a model that would estimate sales, and based on sales, estimate future cash flows, because I always thought that a short-term solution wouldn't do the trick. Because you have a now more than ever, you have a lead time from Purchase Order to Delivery. That depending on where you're sourcing from, can take up to 150 days. So if you have only a short-term solution, you're just spinning the wheel, but you're not going anywhere. So the idea was to offer a long-term financial solution and that's why what we started doing, and basically, the whole idea was to offer more money to be paid back in a longer period of time.

Yoni Mazor 34:37
So that was the first product you guys launched.

Ricardo Pero 34:39

Yoni Mazor 34:41
What was the year?

Ricardo Pero 34:45
We are talking about November 2017.

Yoni Mazor 34:47
2017, the product that you launched, you know, the long-term funding was up to four months or 12 months.

Ricardo Pero 34:56
Now we are offering up to 24 months, but we started with 12 months. So that was the first product, we start lending, you know, basically our own money.

Yoni Mazor 35:11
That's pretty bold.

Ricardo Pero 35:13
Let me tell you making up cold calls offering money. I mean, and I remember our first prosper show was August 2018. Fabio, my co-founder.

Yoni Mazor 35:34
So let me ask you, Fabio is the co-founder, but he was the seller that got you into this whole game.

Ricardo Pero 35:39
His brother, Daniel.

Yoni Mazor 35:42
Is Daniel in advertising?

Ricardo Pero 35:45
Yeah, Daniel is now the CEO of Quartile.

Yoni Mazor 35:49
So he found that it also or that's owned by somebody else.

Ricardo Pero 35:53
No, Quartile was founded by Daniel with his brother.

Yoni Mazor 36:04
Yeah, pretty good.

Ricardo Pero 36:06
So Fabio came to work with me, and Eduardo works with Daniel at Quartile. At first, we were all kind of partners in our business. And then now, you know, they took Quartile to the next level. It's an amazing company and I'm here working with Fabio and building Sellers Funding.

Yoni Mazor 36:34
The question remains, do they still sell, or do they cash that out?

Ricardo Pero 36:38
No, they used to sell but the moment that they start Quartile, they stop selling. They sold their business, and they focus 100% on Quartile.

Yoni Mazor 36:50
So 2007, You are off to the races you and five years in the market...

Ricardo Pero 37:01
Two Brazilian guys that no one saw before in a Seller's Funding. What the hell this guy is doing here. And it's funny to see how we evolved. I mean, the last prosper we had lines of people, you know, coming to talk to us. We have several clients come in to meet the team and we were a team of 7. I'm very proud of the brand's recognition.

Yoni Mazor 37:30
Yeah, in less than four years you guys made the industry out of scratch. But you mentioned that you start with your money, you're still funding your money, you that rich, they have so much money to fund or what's a credit facility?

Ricardo Pero 37:45
My personal credit score is really bad these days. I leveraged myself to the bone to be here.

Yoni Mazor 37:55
So you are saying you cannot even get a loan from your company if you applied.

Ricardo Pero 38:01
I can't. Thank God, we don't check credit scores to approve loans. I wouldn't have a chance, but I don't sell on Amazon so...

Yoni Mazor 38:14
He's talking about no credit, no Amazon business, so you really can't get the funding. The shoemaker walks barefoot, that's very unique. Okay, so what's the situation today? So, I guess give us the past four years, the evolution of Seller's Funding. Obviously, we saw prosper show 2021. You know, people are standing in line, a team of seven coming in, everybody wants a piece of the action but how did you get there? Well, what happened four years?

Ricardo Pero 38:38
So I think we evolved quite a lot as a company. We started as a learning business, basically. I would say we are a financial platform solution, it's not marketing. It's a fact. I believe it's about the customer journey. There are two ways that our customers grow. First, they grow, especially white-label, like private label sellers. Once they reach a certain level, with their Amazon sales, they're starting to build a brand, so they will try to venture outside of Amazon. They usually go to Shopify now Walmart is the thing. Sometimes now, you have players like Bigcommerce, Magento. So all these omnichannel platforms allow them to establish a brand outside of Amazon. So we realize that and instead of using our connecting only the Amazon data, we decided to start connecting with all these other platforms. So nowadays, if you sell like three or four or five marketplaces, we will be able to consolidate all these sales into one sales forecast and provide you a much greater credit facility then. But you know, something that will only work for an Amazon.

Yoni Mazor 40:12
We're like you mentioned earlier sending as you did in Brazil when you have all these baskets of solutions for them. It wasn't like taking it like, oh, what's your journey? What are they experiencing and whatever is in the toolbox of either give it to them or even develop them? It seems like more we developed this because it's all brand new industries in eCommerce. So you look at the journey, which other platforms you're using. Let me ask you this. Did you also look at the journey from an international perspective even so on Amazon so...?

Ricardo Pero 40:40
Yeah, that's the second because a lot of clients sell here but they also sell in Canada, Europe, Mexico, and ...

Yoni Mazor 40:52
What other products are developed for that domain?

Ricardo Pero 40:55
We offered a digital banking platform, basically, where they can direct their marketplace payments to digital bank accounts. That goes into a digital wallet where they can receive payments, convert payments to their vendors and suppliers in multiple currencies. And that was a way for us to increase client retention, and make our clients' lives easier. We have a few aggregators that use our cash management solution. And one day I was talking to one of them and I had to ask, why do you work with us? You know, we are very competitive on pricing. But pricing is not a factor that will differentiate us in the long term. And he said to me, I love your platform because I have one login and I can borrow money, I can pay my suppliers, I can pay my vendors, I have my credit card, I have everything. And all the dozens of brands that he owns, or he managed, it's everything under one umbrella, and one login.

Yoni Mazor 42:20
So the way it works is it's actually a platform, it's a digital platform. We log in and have all these solutions built-in before probably 2007 was more like you run a telephone, here's your money. It's in your bank and nothing, not even a platform.

Ricardo Pero 42:32

Yoni Mazor 42:32
Yeah, that's programming, that software as data that's where we're touching the data set. I'm not just Amazon but also doing Walmart, Bigcommerce, which is very data-heavy intensive, and all these APIs that you got to plugin into one platform to make a variety of products all work together in synchrony and make it on the one log in one roof. That's kind of the innovation here.

Ricardo Pero 42:53
I usually joke with Fabio but that's why he has gray hair. He had to deal with the technology, not me.

Yoni Mazor 43:03
But you focus on the user, the client, the seller, and explain to them how this solution will be useful for them.

Ricardo Pero 43:09
Yeah, the idea that we offer, it's under one roof, one-stop shop. You have very competitive financing terms. You have the ability to open multiple accounts in different currencies to receive marketplace payments. So you don't need to worry about you know, opening a bank account in Canada, in the UK, or Germany. We are expanding to Australia, we are expanding to UAE, Mexico, Brazil. So the idea is to make your life easier. You know, it's all digital. So we have already most of the information it's easy to open a new account. Now we have partnerships with major global financial solutions, in that sense. So it's all combined in one platform. We have a very competitive conversion rate on the foreign exchange so we can compete, and we will be better most of the time. Competing with all these major players like pay on year wise and so one we compete for the neck to neck and there's no reason why we shouldn't be retaining most of their business. We are seeing the platform grow and the adoption grows month by month. The idea is to diversify into more and more products. Last year, not only did we launch the digital platform, but we also launched the data advanced products trying to capture a piece of the market that was owned by one or two competitors. We are very competitive in that sense as well, getting a lot of new customers for that platform, and becomes very easy, so one of the solutions that we offer, if a US seller selling abroad, we can provide the daily advanced products, converting pounds, euros, into dollars on a daily basis. And so all you bedded in one fee, so you get your money here. You're not overpaying for FX transactions.

Yoni Mazor 45:34
What does mean it is selling on Amazon, UK GBP, (great British pounds) but Amazon will have its deposit paid to the account, which probably will be you guys. But you guys pay it in US dollars, you know, daily on the bank account. That's where it's at. That's pretty quick. Got it, I have a feeling that Fabio is more on the data side, and you know, branching out the data components and all the other marketplaces, you kind of bring that very well polished and experience banking solutions, product solutions, I do have a feeling in the future that some of the derivatives might even log into this also because sellers are like big corporations. They have all these things with global supplies. And, you know, maybe you can give derivatives or some sort of instruments to hedge their bets on the cost of goods or commodities and raw materials and stuff like that, is that something that you see into the future at all being into play?

Ricardo Pero 46:31
I think there are ways that we can allow that to happen. It's a work in progress. We are doing some initiatives to educate our sellers more and more. I think that you know, we just launched a new dashboard called Signals where someone can go into our platform can check their p&l, their attribution report by-product by the marketplace. They can check their business valuation. We've been seeing all these waves of aggregators purchasing deals, so we have good relationships with a number of...

Yoni Mazor 47:20
In a platform of actual brands selling on Amazon, and your platform can see a potential valuation of your business is worth between x to y, like a spectrum, million to 10 million, whatever based on the relationships you already have with institutions out there that aggregate.

Ricardo Pero 47:33
Correct. And I would say, for larger sellers, having the capability of offering hedges and some advisory on how currencies can fluctuate is something that is on the radar. I don't want to see us as pure lending or, digital platform, you can see in our Trustpilot reviews, there is always a very strong presence of our salesforce being mentioned during these reviews. I mean, I'm very pleased when I see that our clients are actually appointing how pleased they are with the service from our team.

Yoni Mazor 48:22
The solvency is a big component, you guys act more like you provide the sellers more of the quality of you know, the JPMorgan when they come and consult and advise the big institutions how to play out their cards and stay a multinational. You democratize that and bring it down through technology, and also in a human touch. And that's kind of the innovation that I see all mixing together and dripping down and, you know, supporting millions of sellers, eCommerce sellers worldwide, which is pretty cool.

Ricardo Pero 48:51

Yoni Mazor 48:51
Okay, so we can talk days and days about innovation stuff like that, which is cool, but I want to kind of package the episode sees what we got so far, and kind of hit the last round. So born and raise in Porto Alegre, Brazil. In 1992, you already started your professional career working for a metal company until 1999, then in 1999 you shift to the United States, you got a job with Citibank 1999 until 2007, you worked there in the 2007-2009 year and Bank of America for two years a little rocky financial global crisis, then you shift to 2009 until 2016 to JPMorgan, with two years in between in Brazil by 2010, and 2012. And then in 2016, you've exhausted yourself in the bigger institutional banks. You know what your friend sells on Amazon, he has all these challenges. Let me see if I can help him. I have a feeling that through that process, you're going to create your own big Banking Corporation of financial services solutions corporation, and that's gonna be interesting right for you, but yeah, since 2017 When you guys launched it till today, you made amazing advances and supporting eCommerce sales worldwide, do we got everything correct me so far?

Ricardo Pero 50:05

Yoni Mazor 50:06
Very good. Fascinating. I think it's special, I think we discuss an extraordinary story. So that's for sure. Thank you for sharing that. Now, I want to kind of package the episode and touch on two last points. The first will be is if somebody wants to reach out and connect, where can they find you and the last thing will be is what is your message of hope and inspiration for entrepreneurs listening out there?

Ricardo Pero 50:26
Yeah, sure. Well, to connect, you can go to My email is, easy to connect. We are so proud to support thousands of merchants and I think that we are going through very difficult times. And we've seen eCommerce benefiting somehow with the pandemic and I think that what we saw is a structural shift. I was in New York last week, and walking the streets and seeing empty retail spaces. I mean, this is like, the collateral effect of everything that we benefit here on the side.

Yoni Mazor 51:21
The collateral damage of the rise of eCommerce.

Ricardo Pero 51:24
I would say, if you are in this industry, you are in the right place at the right time. You need to be prepared because competition is fierce but there's plenty of opportunities here and if you're looking to start an eCommerce business, I mean, there is no better time than then this one. I will be there to support you in any way possible. And we have a chain of partners that we can support in multiple areas, logistics, the relationship with marketplaces is a key thing. Finance is another one and then we can go on and on with the challenge, but I'd say the timing is perfect if you want to start an eCommerce business and if you want to invest to grow here, I mean, there is no better place.

Yoni Mazor 52:26
So the opportunity is here, the time is now, focus on it, do it and you should probably find success, but you got to work hard for it. Ricardo, thank you so much. I really enjoyed it. I wish you and the whole team. Best of luck going forward. I hope everybody else enjoyed it until next time. Take care, everybody.

Ricardo Pero 52:44
Thank you.