Coco Pago (YC S19)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations together with our financial statements and the related notes and other financial information included elsewhere in this offering. Some of the information contained in this discussion and analysis, including information regarding the strategy and plans for our business, includes forward-looking statements that involve risks and uncertainties. You should review the "Risk Factors" section for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis.

Overview

Coco Pago is the Revolut for Latin America. A super app for money transfers and financial services.

As migrants, we understand the impact remittances have in the lives of the people who rely on them to survive and the recipient countries in general. We founded Coco Pago to help unleash the economic potential of Latin America, by implementing sophisticated technological systems that create smart ways to administrate and distribute resources.

Milestones

Coco Market Inc was incorporated in the State of Delaware in January 2019.

Since then, we have:

• Coco Pago is Revolut for Latin America, it helps migrants send money back home, a $120B market
• Launched in early 2022, now making $90k in monthly revenue, and currently profitable
• The founders are Venezuelan Migrants understand the pain of sending money to Latin America
• The founders have 9+ years of experience building financial products using blockchain technology
• Raised $1.5M from YCombinator and top investors. Now raising $500k to expand in Latin America.
• Migrant Money Transfers Market Size -Transfers to LatAm $120B -Transfers to Venezuela: $6B

The Company is subject to risks and uncertainties common to early-stage companies. Given the Company’s limited operating history, the Company cannot reliably estimate how much revenue it will receive in the future.

Historical Results of Operations

• Revenues & Gross Margin. For the period ended December 31, 2022, the Company had revenues of $10,178,282 compared to the year ended December 31, 2021, when the Company had revenues of $13,306,378. Our gross margin was 3.51% in fiscal year 2022, compared to 7.88% in 2021. We saw a surge in revenue in 2021 from the pandemic, hence 2022 revenue was lower than 2021.
• Assets. As of December 31, 2022, the Company had total assets of $99,458, including $65,409 in cash. As of December 31, 2021, the Company had $420,724 in total assets, including $386,675 in cash.
• Net Loss. The Company has had net losses of $732,985 and net losses of $509,124 for the fiscal years ended December 31, 2022 and December 31, 2021, respectively.
• Liabilities. The Company's liabilities totaled $1,467,629 for the fiscal year ended December 31, 2022 and $1,114,760 for the fiscal year ended December 31, 2021.

Liquidity & Capital Resources

To-date, the company has been financed with $1,392,208 in SAFEs and $926,743 in debt.

After the conclusion of this Offering, should we hit our minimum funding target, our projected runway is 12 months before we need to raise further capital.

We plan to use the proceeds as set forth in this Form C under "Use of Funds". We don’t have any other sources of capital in the immediate future.

We will likely require additional financing in excess of the proceeds from the Offering in order to perform operations over the lifetime of the Company. We plan to raise capital in 7 months. 

Except as otherwise described in this Form C, we do not have additional sources of capital other than the proceeds from the offering. Because of the complexities and uncertainties in establishing a new business strategy, it is not possible to adequately project whether the proceeds of this offering will be sufficient to enable us to implement our strategy. This complexity and uncertainty will be increased if less than the maximum amount of securities offered in this offering is sold. The Company intends to raise additional capital in the future from investors. Although capital may be available for early-stage companies, there is no guarantee that the Company will receive any investments from investors.

Runway & Short/Mid Term Expenses

Coco Market Inc cash in hand is $120,000, as of September 2023. Over the last three months, revenues have averaged $90,000/month, cost of goods sold has averaged $0/month, and operational expenses have averaged $90,000/month, for an average burn rate of $0 per month. We are currently at break-even.

Since the date of our financials, the Gross Merchandise Volume (GMV) and revenue generated by our inaugural product, Coco Mercado, have experienced a decrease over the course of this year. In response to this shift, we implemented cost-cutting measures, including a reduction in our workforce, to ensure that we maintain a sustainable financial position and continue to operate at a break-even point. 

As we approach the final quarter of the year, traditionally the strongest period owing to the holiday season, we anticipate a surge in revenue. It's important to note that, in line with our prudent financial strategy, we do not plan to escalate our expenses at this time. In 3 months from now, we expect our revenue to be around $110k and our expenses to remain around $90k (monthly).

Our current financial position has reached a break-even point where our revenue and expenses are at the same level.

Aside from Wefunder, we are actively engaging in discussions with venture capitalists (VCs) and angel investors to secure additional funding beyond our Wefunder campaign.

All projections in the above narrative are forward-looking and not guaranteed.