Johanna Posada, Elevar Equity | Building Startups That Serve Low-Income Segments [Ep. 56]

ESP

Listen onSpotifyYouTube
Cover of «Johanna Posada, Elevar Equity | Building Startups That Serve Low-Income Segments [Ep. 56]»

The audio and video are in Spanish. These notes are a translation.

Even though there are many attractive opportunities for startups and venture capital funds in Latin America, there are still few companies and investors that have focused on serving large and underserved markets, which are mostly made up of tens of millions of people with limited access to services such as finance, health, and education. To understand why this happens, today we spoke with Johanna Posada, partner and cofounder of Elevar Equity.

Elevar is an impact fund specialized in investing in startups in Latin America and India, whose products and services serve low-income populations.

Johanna explained to us what the challenges are of understanding and serving this segment of the population, and how startups can innovate in their business model and distribution strategy to generate real impact with better quality at accessible prices.

To date, Elevar Equity has invested more than 300 million dollars in startups, and its Latin America portfolio includes companies such as Tiendanube, Favo, Fairplay, Canasta Rosa, and Justo.

Thanks to Santiago Sosa of Tiendanube, and Amie Patel and Shobha Venkataraman of Elevar Equity for the excellent question suggestions.

What You Can Learn Today

  • Strategies for serving underserved customer segments
  • Structuring impact business models
  • How to build and strengthen the founder-investor relationship

If you like the podcast, the easiest way to help us is by leaving a review with ⭐⭐⭐⭐⭐ on Spotify or Apple Podcasts. It takes less than 1 minute and helps us convince the hardest guests to land, such as David Vélez, CEO and founder of Nubank, whom we would love to interview.

Youtube Timestamps*

About Johanna and Elevar Equity

  • [1:31] - How did Johanna get into the world of startups?
    • Career path in corporate finance
    • In 2004 she became interested in the microfinance sector
    • Investment opportunity in companies in the microfinance space
    • Large investments in India, with a 2006 fund
  • [3:00] - What is Elevar Equity?
    • Venture capital fund
    • It seeks to drive the economic resilience of underserved communities
    • Investment in inclusive, accessible, and scalable businesses
    • Evolution toward financial and educational services
  • [5:31] - Elevar Equity’s investment thesis
    • Increase in investment and economic development in Latin America
    • Emphasis on accessible products that benefit underserved populations
    • Attention to lower-middle-class customers who are economically active
    • Impact centered on benefiting MSMEs with fewer than 15 employees

How Elevar Equity Serves the “Base of the Pyramid”

  • [9:24] - Why do so few startups focus on underserved populations?
    • It is hard to serve this population
    • Customer acquisition in an analog way, not a digital one
    • Patience is needed to educate the customer
    • Innovation does not come in the product, but in distribution
  • [13:49] - Impact business model
    • Offline customer acquisition
    • Offering a great product at a low price
  • [16:29] - Effective acquisition strategies for reaching the base of the pyramid
    • A traditional sales force that uses technology tools
    • Positioning through recognized institutions
    • Partnerships that make it possible to lower the acquisition cost
  • [20:48] - Moving from serving the upper-middle class to focusing on the lower-middle class
    • Few models are capable of changing segments
    • Focus on the customer’s needs
  • [22:20] - Positive unit economics
    • Covering the acquisition cost on the customer’s first purchase
    • A correct understanding of the customer
    • Evaluating the metrics before scaling
  • [26:38] - Field visits before investing
    • Interaction with customers
    • Focus on segments in need
  • [28:27] - What do India and Latin America have in common?
    • Emerging countries
    • Many similarities between customers
    • Similar economies, services, and inefficiencies
    • Inspiration from business models in both regions
  • [32:58] - What problem would Johanna like to solve with her work at Elevar?
    • Addressing the impact of climate change on populations in need
    • Implementing solutions at the micro level
    • There is still a lot to do in this area

Investor - Founders Relationship

  • [36:29] - As an investor, how do you connect with founders?
    • Identifying with the entrepreneurs’ mission and vision
    • Elevar focuses on early stages, so it acts as a partner
    • The investor’s job is to become an ally
    • Having the power to listen, before speaking
  • [40:04] - Is it possible to build authentic relationships with founders before investing?
    • Beyond being an option, it is something completely necessary
    • Elevar does not invest in companies to which it cannot add value

Tweet Round

  • [42:33] -
    • Recommended book: Out-Innovate, by Alexandre Lazarow
    • Changes in the Latin American startup ecosystem: more female presence, both founders and investors
    • Founders to interview: Alejandro Ponce of Favo and Viviana Zocco of Vi-Da Tec

Episode Mentions

You can find Johanna on LinkedIn

Recommended book: Out-Innovate, by Alexandre Lazarow

Founders to interview: Alejandro Ponce of Favo and Viviana Zocco of Vi-Da Tec

Discover More from the Startupeable Podcast

Listen to every episode at startupeable.com/podcast.

Subscribe to the newsletter to hear when a new one comes out.

Follow Enzo Cavalie on X: @enzocavalie.

Watch the episode