Coco Pago (YC S19)

1. Revenue = GMV on Coco Mercado. We add 15% markups (gross profit) on products sold there. 2.Retention has definitely a lot of room for improvement and this represents one of our main challenges today. While a percentage of our users use frequently (monthly), most users only use us for specific occasions (birthdays, mother’s day, Christmas, etc). To improve retention, we’re doing 2 things: (i) building Coco Pago. Many of our users asked us for ways to send money, and this product is a response to that. (ii) we’re building “Coco Prime”: a subscription program for Coco Mercado that will offer incentives for users to use us every month. 3.We see both products as complementary. Coco Mercado is more niche - for people who like to have more control over the money being sent back home, or enjoys the convenience of the service. Although focusing in this niche across different markets represents a big opportunity, in general, most people just like to send money and let the beneficiary decide how to spend it. We believe there’a a big opportunity for creating mobile financial products for the unbanked/underbanked and improve the way digital cross-border remittances work, which we don’t want to miss. We have a crypto background (launched first bitcoin exchange platform in Venezuela back in 2014) and understand the technology. As I mentioned before, we acknowledge there’s still lots of challenges ahead but our bet is: crypto, if done right, can improve the remittances space. And we want to be at the forefront of this space. 4.That’s a good point. In general, we like to call ourselves just “Coco”, but try to differentiate both products. In the long run, if Coco Pago has the success we hope it will, we might either just call it “Pago” (“Pay” in Spanish), or Call it just “Coco” as well.

Hey Nikk - thanks for reaching out and for your interest in supporting us in this journey. To answer your questions: 1. They’re 2 products built under the same company. We built Coco Mercado first as a way to solve an initial problem migrants had (helping their families back home get the food they need) and second as a way to quickly capture some market share, build a significant customer base and deploy a crypto wallet (which was our initial idea) later on. Our strategy has always been: to create a product people need, that is easy to use, and a brand they can trust, then build more products on top of it. Kind of like the same way as Mercado Libre → Mercado Pago, or Alibaba → Alipay. 2. Both. 3. We already completed the legal set up on our end and the independent CPA completed the financials review 2 days ago. We’re just waiting for our folks at wefunder to draft the Form C, which hopefully will be this week. Will share a link once I have it. 4. 2019 revenue: 630k, gross profit: $83k. 2020 revenue: 7.3M. Gross profit: $920k. 2021 revenue to date: $9.5M, gross profit: $1.1M. We estimate to close the year at $15M in revenue, especially considering that Q4 is always the strongest. 5. Our thesis is: on one hand, the vast majority of people in emerging markets are either unbanked or underbanked, which is the reason why the majority of worker remittances are picked up in cash. As the world transitions to digital payments, we want to position ourselves for the digital shift in remittances. Crypto allows people to receive money from their phones, and our non-custodial wallet solution allows us to operate in many jurisditicions/corridors without the need to get a money transfer lisence and without dealing with many regulations in the space. There’s still many challenges ahead when it comes to building a solution that’s both easy to use and cheap, but if we nail it, the opportunity is huge. 6. A combination of revenue and market size opportunity. Also - we’re raising $500k in this round and after doing some math, we came to the conclusion that $8M is the minimum valuation we can do to avoid diluting too much at this stage, considering we’ve raised a $600k pre-seed in the past (including Y Combinator, which took 7% of the comapny). 7. -Retention is 22% , Monthly customers: 10k on average, burn rate last month was $40k, on average, customers use our service 4 times every year. We plan to increase retention and LTV through the wallet, and also create a subscription program (“Coco Prime”) for Coco Mercado. 8. 17 month runway for the wallet product alone, not accounting current revenue from Coco Mercado. Our goal is to show strong traction on the wallet for the next following months, which we’re confident we can achieve, then raise a series A on Q1 2022. Globally, digital cross-border remittances is estimated to go from $295B in 2021 to $428 in 2025. In the short term, our goal is to conquer Venezuela. There’s currently around 5 million Venezuelan migrants/expats. Many of them send money back home. This will grow to a 7 million migrant population within the next 2 years. We want to capture at least 1 million users within the next 2 years. Let me know if you have any other question.

Hi Matteo - that's a good question that we get often. The way we see it, our goal is to become the number 1 remittances company. Our initial product, Coco Mercado, allowed us to go after the in-kind remittances market (people sending goods back home) in a successful way. Now, we're going after the cash remittances market, which represents the vast majority of the remittances market. We (the founders) have a strong background in crypto, having launched Surbitcoin, the first bitcoin exchange platform in Venezuela, back in 2014. Back then, we learned about the potential of the intersection of crypto and remittances. With this round, we hope to take Coco Pago to the next level. If it continues to grow at the same rate it has been over the last 5 weeks, this product could become our main focus. We have yet to decide whether we will include both services (send food+medicine and money via crypto) in one (super) app, or will keep them separate. We will make a decision within the next few months.

Once we conquer LatAm, yes! we would love to expand to Africa :-)

Hi Lauren - sure. My email is victor@cocomercado.com

Hi Lea, we did $13.3M in sales, and revenue was $1.1M

Hi Calvin - yes it is!

That's every entrepreneur's dream, including us :-)

Yes - $500k. We just raised it to $700k last minute as wefunder advised it'd be hard to increase it later if we decided to.

Yes. Microcredits using DeFi is something we'll be aiming for next year.