Chalk this up as Seaya Ventures’ third investment in Latin America. After backing online takeout delivery service SinDelantal.Mx, and Uber competitor Cabify, the Spanish VC is placing a $4 million bet on Mexican price comparison site ComparaGuru.
Founded in August 2014 by VC Nova Founders, Mexico City-headquartered ComparaGuru lets consumers compare and apply to a wide range of financial products, from credit cards, personal loans, to insurance.
It’s strikingly similar to something like the UK’s MoneySuperMarket (in fact, ComparaGuru’s team includes ex-MoneySuperMarket employees, as well as ex-Rocket Internet managers), and is a classic example of taking a proven online business model and applying it to an emerging market. In this instance, Latin America, and, specifically, Mexico.
On that note, Enrique Horcasitas, co-Managing Director and co-founder of ComparaGuru, says that the main challenge faced by the startup is “getting people in the local market used to online financial comparison services and to our brand.”
In other words, as more and more people in Mexico come online and become accustomed to doing business via the Internet, it’s as much a case of helping to create the market for price comparisons as it is creating awareness of ComparaGuru’s brand specifically.
What I also find particularly interesting about these sorts of emerging market plays is, a bit like the original Dot Com, first-mover advantage only works if the timing is right. Move too early and you can burn through a lot of cash before the market catches up.
To that end, I put it to Seaya Ventures’ Michael Kleindl that the Spanish VC seems to have a penchant for LatAm investments. “Yes indeed we do,” he replied. “We truly believe that these markets will have a major catch up especially in digital in the next decade. So that’s why by investing now, we feel this will provide superior returns.”
Adds Kleindl: “Strong economies, and in many markets, political stability, and this big delay in digital development are real drivers for our investments.”