For several years, Alejandro McCormack built his career away from Latin America. He went through the traditional financial industry in Boston and then made the leap to the fintech world, where he worked at unicorns such as N26 and Raisin. They were years of learning about growth, technology and team organization, but also of a question that began to become more and more present.
Why was he helping people in Europe solve increasingly sophisticated financial problems while millions in Latin America still did not have access to basic services?
“Here in Latin America we do have a great opportunity to transform lives through credit, through payments, through accounts.”
The decision to return, however, was not just a matter of purpose. Alejandro wanted to test several hypotheses: that there was a real opportunity in Central America, that he could execute in a region that functioned differently than Europe, and that he had found the right partners to do it. Thus Abaco began to take shape.
From European fintech to an opportunity in Central America
Before creating Ábaco, Alejandro McComack led N1co, a fintech that sought to become a regional neobank. The company managed to raise capital and grow quickly, but there was a problem that constantly appeared among its clients: they needed credit.
They could process payments, but wanted financing to open a second branch, expand inventory, or take advantage of a new business opportunity.
• What did you see in the financial system that made you think there was an opportunity?
We were giving payment gateways to businesses and everyone’s number one question was: ‘Okay, cool, thanks for processing my payment, but can you give me a loan?’ That question was constant
For Alejandro, behind that question there was a much bigger problem. The region maintains a huge financing gap for small and medium-sized businesses, and Central America was precisely one of the markets where this need was least served.
The size might seem like a disadvantage. He decided to see it as an opportunity.
«When they tell me that El Salvador or Central America is a small market, yes, it is, it is smaller than Brazil. But it is an immense opportunity. The lack of credit is a very big problem, even if it is in a secondary market,” says Alejandro.
The bet began to pay off. Ábaco had already provided more than US$100 million in loans and built an operation focused on small and medium-sized businesses in the region.
The challenge of proving that it is possible
For Alejandro, the growth of Ábaco ended up becoming more than just a business opportunity. It also became a way to demonstrate that Central America could build large-scale technology companies.
The path, however, was full of external doubts. During the process to raise the recently announced US$53 million, they received numerous “no’s.”
Some investors considered the market too small. Others had never contemplated investing in Central America or doubted that a credit company could raise the capital necessary to scale.
There were even those who recommended moving the company to Mexico. They didn’t do it.
• What did it mean to you to be able to raise those US$53 million?
Maybe we are stupid, but it is also a matter of conviction that we have a chance…
…the only way to prove that a great company can be created from Central America.
That’s why, when the first term sheet arrived, the feeling was special. After hearing for months that it was impossible to raise scale capital from Central America, they finally had an answer.
“Everyone had told us that it was impossible to raise scalable capital from Central America,” says Alejandro.
But capital, he assures, has never been the ultimate goal. The goal is to finance hundreds of thousands of SMEs in the region. And if Ábaco manages to do it, Alejandro believes he will have achieved something that goes beyond the company.
«When we get there it will be much easier for the following Central American entrepreneurs. “They are no longer going to question it,” Alejandro mentions.
Build the path for those to come
Ábaco is developing new credit products, adding talent and expanding the use of artificial intelligence within the operation. The company is already rebuilding entire processes with this technology and Alejandro believes that the company should prepare for the model that will exist in a year or two, not the one that exists today.
But the most important challenge remains another: maintaining the ability to raise the bar.
The company has just closed a record month, with nearly US$100 million in loans placed. The result was celebrated, but a new question immediately appeared: what comes next?
«We have to believe it, but there has to be a certain level of feet on the ground to know: I’m not going to go crazy either«
For Alejandro, this is one of the great advantages of having co-founders. Carlos Villalobos and Moisés Hasbun function as that counterweight that allows us to celebrate progress without losing sight of everything that still remains to be done.
And perhaps that is the true dimension of his bet. Not only found Ábaco. Build a test. A company that demonstrates that the size of a market does not necessarily determine the size of an opportunity and that companies capable of competing on a global level can also be built from Central America.
Having gone through some of the most developed fintech ecosystems in the world and returning to the region to confront those who said the market was too small, Alejandro seems clear about what he wants to prove. That yes it is possible.
