Three Venezuelan entrepreneurs have shown that innovation and entrepreneurship can transform lives and businesses. Starting with cryptocurrency exchanges, they created a novel system for paying for food and medicine transfers.
Transforming Lives and Businesses in Venezuela: The Innovative Blockchain based Money Transfer System by Cocomercado
Now, their next product involves money transfers on the blockchain. The resulting company Cocomercado, has enabled small businesses to increase their sales from $1,000 to more than $100,000 per month.
The economic situation in Venezuela has led to the migration of more than 6 million Venezuelans to other countries and the remittances they send to their families already account for 6% of the country’s GDP. Last year alone it was estimated that remittances to Venezuela would reach $2.5 billion by the end of 2022, an increase of 25%.
Francisco Martín co founder of Cocomercado, is well aware of these figures. The Venezuelan startup has created an innovative system that captures remittances and distributes them to retailers, small businesses and pharmacies. This venture shows that economic crises can be turned into entrepreneurial opportunities.
The Inspiring Story of a Venezuelan Startup’s Success in the Remittance Industry
The story of Cocomercado, a growing Venezuelan startup, began with the partnership of three visionary entrepreneurs. Francisco Martín had already been entrepreneurs in the remittance sector for a few years when in 2015 he moved to New York and met Kevin and Victor Charles, the company’s other co-founders. Kevin and Victor had founded Surbitcoin, the first cryptocurrency exchange house in Venezuela, which became a success.
Afterwards, Francisco decided he could do something similar in Europe. In 2016, he moved to Spain and founded a successful crypto exchange house that allowed many people to send remittances to their families in Venezuela easily and securely.
Together with Kevin and Victor, Francisco started thinking about a venture that would have an even greater impact. That’s when the idea of sending remittances through food came up, since crypto involved technological knowledge that not all people possessed.
“We realized that a large part of the remittances sent to Venezuela from different parts of the world are for food and medicine,” explains Francisco Martín. “We decided to capture remittances through a marketplace,” he adds, giving rise to one of the most innovative startups in the remittance sector.
Cocomercado: the startup that boosts digital commerce and protects against inflation in Venezuela
Cocomercado has stood out in the remittance sector in Venezuela thanks to its focus on food and medicine. But not only that, its system has enabled small businesses to sell more and adapt to the digital age. In addition, remittance beneficiaries receive the products in kind, which allows them to eat better and protects them from going out on the streets.
According to Francisco Martín, co-founder of Cocomercado, small businesses that partner with the startup generate extra income and protect themselves from inflation by receiving payments in dollars. “We have dozens of successful cases, bodegas that went from selling less than $1,000 to $150,000 a month,” Martín comments.
Cocomercado has an interface for stores to see all their orders, products and invoices, as well as to check their inventories through QR codes. Users register, select their store, fill their cart and pay. The store receives the order and delivers it. Demand is concentrated on meat products, vegetables and medicines such as paracetamol. However, Cocomercado’s catalog offers a huge diversity of products.
The successful startup that is revolutionizing the crypto world in Latin America
The successful startup Cocomercado, which was accelerated by YCombinator in San Francisco in 2019 has seen an impressive increase in its user base. In a year, they have gone from 300 to nearly 4,000 and currently have 90,000 active users who place one or two orders per month.
Cocomercado has invoiced close to $50 million in the last three years and managed to raise $1.1 million in its first round of funding in which prestigious investors such as the accelerator YCombinator itself, Inca Ventures, Flori Ventures, Sebastián Serrano and Rene Reinsberg participated.
In 2022, Cocomercado closed its latest funding round, in which Orange Dao and several users participated through the crowdfunding platform Wefunder, and managed to raise $1.5 million. The founders of Cocomercado also launched Coco Pago, which provides an easy way to send remittances using stable currencies in a self-secured wallet available on Appstore and Playstore.
Coco Pago has raised $3 million and is growing 30% month over month in just eight months. The startup has plans to continue the expansion of the service and expects to raise another round of funding in the coming months. Additionally, Coco Pago plans to launch a physical/digital prepaid card allowing users to pay at national and international merchants.
With this solution, users can protect their family members from inflation by sending remittances in stable currencies and use the self custodied wallet to have access to their own funds at all times. The startup also provides the option to withdraw the money in bolivars to bank accounts or cash in Venezuela.
The company’s founders are already thinking of replicating this success in other countries in the region making it a valuable option for businesses to protect their sales from inflation and generate extra income through the flow of remittances.