At times, Felipe Echandi looks back at everything that has happened to him and it seems surreal. He majored in law and worked as a lawyer. Now he lives in Silicon Valley, California, an entrepreneur’s dream paradise.

In 2008 he came up with the idea of Cuanto, the first Panamanian startup that made it to Y Combinator, the most important digital startup project accelerator in the world.

Cuanto (How Much) is a technological venture aimed at providing financial services, what is known as Fintech, a word that comes from the term financial technology. Echandi and his colleagues José Ramón Varela and Jorge García thought of providing a means of payment accessible to all people with a smartphone, without need for a bank account.

Cuanto: More financial inclusion

The Cuanto App is mainly directed at small business owners who have an online business through a virtual store or a social media account. The goal is to promote easy and quick payments, “without bureaucracy and without paperwork”, as stated on CuantoPago.com. Merchants generate a link that they share with their clients through the medium that best suits them, such as whatsapp or Instagram, and they request the payment.

The reason that led them to create Cuanto, says Echandi, was the lack of access to financial services and the low average of people in Panama who hold a bank account.  “It’s something that is happening throughout the region. Latin America is lagging behind in this aspect.

Panama is an important financial center but that does not mean that we have adequate infrastructure for it; unlike other countries, we have failed to update it”. This is where the opportunity arose, highlights the creator of this App.

400 small businesses currently use the Cuanto App, a Panamanian startup. Image: Cuanto

The Global Findex database of the World Bank (2017), a report with data on how people use financial services in 144 economies, indicates that 69% of adults in the world have an account. In Latin America the average is 54% while in Panama it drops to 46%.

The survey adds that technology is undoubtedly a crucial factor in achieving financial inclusion. In Latin America 55% of adults have a cell phone and Internet access. Since 2014 (The Global Findex database is published every three years), the proportion of adults who make or receive digital payments increased 8 percentage points in economies such as Bolivia, Brazil, Colombia, Haiti and Peru.

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As Echandi points out, the World Bank affirms through its report that digital technology is not enough to increase financial inclusion. It is necessary to ensure that more people benefit from digital financial services, have a well-developed payment system, a good physical infrastructure, adequate regulations and strong consumer protection measures.

Silicon Valley: “We could not believe it!”

José Ramón Varela and Felipe Echandi have been friends since high school.  They met Jorge García long after. Varela is the programmer of the Cuanto App and he designed the entire system. Jorge is the product manager and Echandi runs the financial department.

The YC Winter program included a capital of 150 thousand dollars plus three months of consulting and learning hours at Silicon Valley. Photo: Y Combinator

The three had to prepare and fly to Silicon Valley after receiving an email from Y Combinator accelerator to have an interview about their technological venture at the end of 2018. Initially, they signed up for the StartUp School of the accelerator that offered a capital of 10 thousand dollars.

But before finishing they decided to apply to the main program (YC Winter), where some 15 thousand companies applied. The surprise came when they received an invitation to travel to California with all expenses paid and the opportunity to have access to a capital of 150 thousand dollars. Only 200 companies were admitted, including Cuanto, the first in Panama and Central America to enter the program.

“All three of us were eating in a restaurant that night when we got the call. We had already had the interview with the accelerator partners, it only lasted ten minutes. The telephone rang and it was Michael Siebel, general manager of Y Combinator, to tell us that Cuanto had been selected, “Echandi recalled. It was very exciting, we could not believe it!

They immediately returned to the place where they were staying and began to draw up strategies and objectives. Three months of intense training and advice were waiting for us with giants, such as Paul Buccheit, creator of Gmail, and the rest of the startups participating in the program. In addition, the $150,000 gave the App a boost to continue its operations in Panama and the region. Currently, there are 400 small businesses using the application.

Perseverance is the key to a startup

Success stories such as Rappi in Latin America, Air B&B and Dropbox have come out of the Y Combinator.  For Echandi, it has been very productive to interact with important members of the Mecca of entrepreneurship in Silicon Valley, who are willing to share their experiences about the real challenge of launching their own startups.

It is the first time that a Panamanian Startup is admitted into a Y Combinator accelerator program.

After the program, the participants showed up at the Y Combinator Demo Day, a space that allowed them to get in touch with investors to raise funds. “We are in the process of raising a million dollars and we have two thirds of the road covered. The fact of belonging to the program gave us credibility. We have been able to initiate conversations that we could never have had in Panama, “says Echandi.

The most difficult thing in exposing the advantages of Cuanto in California has been to explain the reality of Latin America and the lack of progress to improve financial inclusion, which in turn shows an urgent need that needs to be addressed.

If there is something that Echandi stands out for in his short career as an entrepreneur, is never losing communication with the team and accepting the fact that not everything will go as planned. “This is trial and error. All successful ventures begin the same way. Perseverance is necessary”.The Cuanto App is already being expanded with beta versions in countries like Guatemala and El Salvador, always with a view to targeting markets larger than the Panamanian one, such as Mexico and Ecuador.