The audio and video are in Spanish. These notes are a translation.
Today I spoke with Adolfo Babatz, co-founder and CEO of Clip, the Mexican fintech that lets thousands of merchants accept card payments, positioning itself as the second-largest card payment processor in Mexico. In 2021, Clip reached a valuation of $2,000M and has raised more than $400M from investors such as SoftBank, Goldman Sachs, Viking Global, General Atlantic, and Dalus Capital.
Youtube Timestamps*
[1:22] - Origin and Path into Startups
Adolfo had several jobs before finding his passion for startups.
- How did his experiences in private equity and his time at MIT steer him toward the entrepreneurial world?
- Why did he decide to join PayPal and then make the leap to found Clip?
Adolfo discovered multiple “pain points” in Mexico’s payments system that motivated him to launch Clip.
- What did he observe at PayPal that inspired him to build more agile solutions focused on the region?
[10:34] - The Lack of Competition in the Financial System
Adolfo states that in Mexico the rules of the game are usually not level and tend to favor the banks.
- What reality did he find when trying to process payments locally with Clip?
- How does banking concentration affect innovation and the country’s economic growth?
Although a legal structure for new payment aggregators existed, the banks did not apply it.
- Why did Clip end up processing transactions initially through the United States?
- How did it finally formalize operations after an agreement with American Express?
[15:25] - Effects of Low Competition on the Economy
Adolfo points out that in countries with uncompetitive markets, innovation and growth slow down.
- Why does he consider it so important to focus on competition in order to boost GDP and financial inclusion?
The payments system in Mexico has limited the rise of e-commerce and the creation of large local startups.
- What examples does Adolfo give of the absence of e-commerce success stories that originated in the country?
[18:35] - Focus and Strategy at Clip
In the early days, Clip tried to cover too many products and market segments.
- What did Adolfo learn from rationalizing projects and focusing only on small merchants and in-person payments?
Clip found in retail stores (such as Sam’s Club) the mass channel for reaching small businesses.
- What was it like to distribute a payments device in retail without prior experience in that channel?
- What role did execution, and a touch of “luck,” play in igniting Clip’s growth?
[32:12] - Culture, Trust, and Resilience
Adolfo stresses the importance of communicating the “why” behind every decision to the team.
- How does he foster trust and autonomy so that each person gives their best?
At several points, Clip was days away from running out of liquidity to make payroll.
- How does Adolfo face this kind of crisis, and what does he learn from each financial challenge?
- Why does he believe that in business the hardest thing is confronting yourself?
He trusts people by default, even though this sometimes works against him.
- How does he balance granting freedom with the need for oversight?
- What long-term advantages does he see in building relationships based on trust?
[46:37] - The Future of Inclusion and Opportunities
Adolfo wants Clip to help “level the playing field” for the smallest merchants.
- Why does he see financial inclusion as Mexico’s first great success story?
- How does he align Clip’s internal culture with the mission of giving access to technology and efficient payments?
In the medium and long term, Adolfo aspires to a major exit or IPO that inspires other local startups.
- Why is a large-scale success story crucial for the venture capital ecosystem in Mexico?
[53:52] - Rapid-Fire Questions
- What are the most important questions for which Adolfo has no answers today?
- What fear or doubt does he think few people dare to ask him directly?
Episode Mentions
You can find Adolfo on LinkedIn
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Follow Enzo Cavalie on X: @enzocavalie.