Pablo Robles Watanabe, Co-Founder and CEO, efektiva

Based in Mexico, Pablo utilizes fin-tech to empower SMBs in their B2B business transactions.

“My family immigrated from Kobe, Japan, three generations ago and arrived in San Francisco before ultimately relocating to Guadalajara, Mexico.

In Guadalajara, my grandfather established connections with a network of suppliers who inspired him to venture into the shoe industry and start his own company. Over time, with the support of his sons, his company grew to become the third-largest shoe retailer in Mexico. My grandfather’s life story taught me valuable lessons about entrepreneurship, emphasizing the importance of nurturing relationships and building trust with clients and stakeholders.

With efektiva, I aspire to replicate stories like my grandfather's. We aim to close the gap of international trade by building trust and securing business transactions, to enable entrepreneurs to grow their companies.”

Can you tell us more about efektiva?

“My startup, efektiva, is a U.S. fin-tech company based in Mexico exclusively focused on B2B transactions and B2B verifications in the buy now, pay later space. We provide companies with a platform that allows the verification of vendors and suppliers in less than four hours, unlike anything you’ve ever seen. In addition, we extract up to seven years of business data on our platform — data such as financial statements, sales, expenses, cash flow, credit score, and legal information for any private company to update on demand.

Besides verification, our platform also assists companies with financing. The application process typically takes about 15 minutes to complete. Once all the necessary information is validated, we will issue a credit line.

For new clients, the minimum credit line starts at $1,000 USD, with a maximum borrowing limit of $25,000 USD. If you demonstrate a track record of trustworthiness in your ability to repay, the maximum credit limit can increase to $250,000 USD.

So far, we've onboarded 1,200 Mexican SMBs into our platform. Currently, we are expanding internationally to make it possible for companies in the U.S. to transact with Mexican suppliers and vendors as well. In the near future, we will unlock the ability to verify suppliers in 15+ countries worldwide.”

There has been an industry slump on buy now, pay later services. How are you combatting these challenges?

“B2C buy now, pay later has been challenging due to the high risk of defaults but we are operating on a B2B approach. B2C customers tend to consume goods for leisure rather than productive assets. We are trying to endorse the same vision of flexible financing but with productive assets. We help SMBs finance assets such as small machinery, logistic providers, and so forth. When SMBs grow their businesses, they see us as more of a business partner rather than just a financing company, which lowers our financial risks.

Furthermore, we create a capability to have automatic collection from our clients. This secured collection is a unique advantage because our clients don’t have to input their payment information into the platform and we have a more integrated method of guaranteeing the return of our funds.”

What is the startup landscape like in Mexico?

“Mexico is the 14th largest economy in the world so there is a booming ecosystem here, with many upcoming unicorns. Currently, Mexico has even overtaken China to become the largest trade partner to the U.S., signifying its rapid growth in trade relations.

The biggest challenge to starting a company in Mexico is navigating the legal and compliance landscape. Unlike other more advanced economies, our public institutions are less reliable so we need to be savvy. We have to exhaust all possible methods before turning to public institutions. Navigating through these challenges is something you cannot learn in school or through an MBA — you have to gain that experience through working in or founding a startup. This is an advantage for us because we know the landscape well.

Mexico is a country full of opportunities but also full of risks. Startups that move fast, like ours, can't afford to make mistakes as we scale. If we fail to comply with specific legal requirements, we could run the risk of going out of business. For this reason, we have to be experts in compliance and building trust with all our stakeholders.”

Who is on your current cap table?

“We closed a pre-seed round with the backing of three private financial institutions in Mexico. In addition, we have secured investments from various angel investors and Techstars.”

Where is your favorite place in Mexico?

“I like to go running in Chapultepec Park to clear my mind. There is a castle on the top of the hill and it’s the site of the Battle of Chapultepec.”