One of the most notable Latin American startups in recent history, cross-border payment platform dLocal became Uruguay’s first unicorn in 2020 and moved to Nasdaq in 2021. The founders of dLocal pioneered the launch of AstroPay, another digital payment platform that now has over five million users.
Now, dLocal and AstroPay co-founder Sergio Vogel has teamed up with Gonzalo Strauss, a former AstroPay product lead, to launch another fintech called Datanomic based in Montevideo, Uruguay. Strauss told gaming-updates that Datanomic aims to connect financial institutions in Latin America through an open B2B financial API that brings together a company’s banking information on a single platform.
Strauss came up with the idea for Datanomic as a solution to some of the problems he faced while processing payments in emerging markets at AstroPay.
Cash is still the main payment method in emerging markets, which Strauss said has created a challenge for fintech companies like AstroPay to reconcile their payments to understand their bank accounts and cash flows.
Individual banks have their own reporting interfaces and platforms that customers can access, and many do not provide customers with an API to access their own data. When banks provide APIs to customers, they are often presented in various formats, from PDF to CSV, so it is important for a business with multiple bank accounts to log into each individual account and get a consolidated view. Gathering information is a complex process. . The company’s financial position, he said.
“There was no easy way to contact our bank accounts. What we actually did was enter our own bank manually. [information] To receive all transactions every five to ten minutes, to receive our balances, to receive and reconcile payments to all of our various bank accounts, to receive support and reconciliation,” Strauss said, “I decided that this was not a scalable solution.
The open banking system seemed promising to Strauss as a potential solution that could help companies like AstroPay automate their processes and get more streamlined banking information. Open banking attempts to bypass the traditional financial path by allowing banks to provide developers with access to their data through an API. The technology began with startups such as TrueLayer in the UK, where regulators gave the first green light to an open banking solution, and Plaid in the US.
But when Strauss looked in Latin America for a solution that would best suit the needs of the business in that region, he found nothing, so he decided to build it himself. Their work began as an internal project at Astropay, but after developing the idea, Strauss contacted Vogel, his then manager, and asked him to start the project as a separate company.
Vogel was impressed with Strauss’s presentation and eventually drew interest from some of his investor contacts, including Angela Strange, a fintech-focused partner of Andreessen Horowitz (a16z). Strauss’ venture did not yet have an official name—he only had a product and a presentation he gave to Vogel—but it was enough to pique the interest of Strange and his team.
Fast forward three months to today and Strauss’ company, Datanomic, has announced a $6 million seed round raising led by a16z. The round also included Latin America-focused venture capital firms Canary, Nazca and Latitude, along with other tech start-ups and large angel investors from banks.
This funding marks a16z’s first investment in Uruguay and one of the largest seed rounds in Latin America.
Today, Datanomic has five clients, although Strauss did not name specific names. The company says it aims to help companies like dLocal or Jeeves corporate expense management platform that rely on the analysis of company bank statements to run their business.
While Datanomic is headquartered in Uruguay, Strauss said that Datanomic’s main target market is Brazil due to its large population and that the country’s central banks and regulators are in the final stages of adopting an open banking system. He added that Datanomic is also targeting Mexico and Colombia, both of which are in the process of adopting an open banking system, although they are at an earlier stage than Brazil. Ultimately, Strauss hopes to expand the product to the Latin American region for companies in Uruguay, Peru, Argentina and other countries facing similar challenges.
“If you have a company with subsidiaries in Mexico, Brazil and Colombia, and the CFO wants to know how much money I have in my bank accounts, through Datanomic, through the API, you can integrate all these accounts to get an idea,” Strauss said.