Ualá: A Dynamic Founder Sharpens Argentina’s Tech Profile

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Ualá is one of several disruptive tech innovators taking Latin America’s banking by storm. The company is very much a reflection of its founder and CEO Pierpaolo Barbieri, a 37-year-old Argentinian whose name recognition is suddenly skyrocketing due to a recent $300 million funding round.

Barbieri was just 14 when he witnessed Argentina’s early-2000s economic and political emergency. Fierce protests known as “El Cacerolazo” sprung out from a deep recession that triggered an unprecedented humanitarian crisis.

“I feel the responsibility to have a financial system that will never again cause a crisis like that one”, said Barbieri in his opening statement in La Nación and Ey!’s “Makers that Inspire” 2023 docuseries. Fast-forward a couple of minutes, and you’ll find him recounting how NBA Hall of Famer and early-2000 local basketball hero Marc Ginóbili ended up becoming an investor in Ualá and one of its main spokespeople. It makes perfect sense: the bank aims to be seen as the materialization of resilience through dark economic times.

Building Knowledge in the US

Barbieri studied History at Harvard and in Economics at Stanford. Before becoming a fellow at the Harvard Kennedy School, he worked as an intern at Goldman Sachs, analyst at Soros Fund Management, researcher for Bridgewater Associates, and executive director of Greenmantle.

He began developing Ualá’s app and strategy in 2015, and launched the organization in 2017.

The Soros Fund was one of its first investors. By 2021, the young company acquired Wilobank, Argentina’s first digital bank. June 2022 saw Ualá entered the Colombian market and acquired Mexico’s ABC Capital, obtaining a banking license that facilitated expansion in Mexico.

Ualá has more than 1,500 employees and 8 million users; 17% of Argentina’s adults have an account.

“I’m a huge fan of Barbieri”, said Andrés Martínez, a 25-year-old Colombian economist working as an Investment Analyst for HSBC. “Not only is he very eloquent and charismatic: he is also very academically respectable.”

He refers to his thesis, Hitler’s Shadow Empire, a political economy investigation that proposes an innovative reading of the financial reasons why WWII’s Axis decided to intervene in the Spanish Civil War in favor of dictator Francisco Franco’s side. The book earned him Thomas T. Hoopes prize in 2019.

“His life’s work is also a classic, inspiring story,” Martínez adds. “A Latino coming to the US, working in its financial world, and then taking what he learned back to his land and using it to create an amazing business model. He’s also helped our region see financial inclusion and digitalization of the economy as real, socially impacting convictions with very tangible effects on personal finances.”

Beyond Ualá, Barbieri has also earned respect from the region’s entrepreneurs through other ventures. A couple of years ago, he created 17Sigma, a venture capital dedicated to finding potential “black swan” entrepreneurs and supporting them in their transition towards pre-seed and seed capital rounds of investment.

A Different Path and Strategy

The $300 million investment was led by Allianz, elevating the firm’s valuation to $2.75 billion. Five years ago, titans Tencent and Softbank led a $150 million round. And just three years ago, both did the same in a $350 million in a Series D investment that helped Ualá acquire “unicorn” status.

Carlos Palotti, one of the country’s leading tech services champions, pointed out how this challenger bank is the tenth active ‘unicorn’ enterprise hailing from the Argentina. Globant, one of the top ten biggest IT companies in the world, is one of the other nine. All of them share deep market penetration inside the region.

For Palotti, its clear what makes Ualá stand up among the others:

“Its presence consolidates in each market it enters because they compete within the space of non-traditional banking while operating like a bank. Their strategy to acquire banking licensing in each country has been key, as it has allowed them to offer more than their fintech competitors can.”

The demographic that aligns with Barbieri’s persona is also the age group that played the most decisive role in Argentina’s recent elections. Economically, the young CEO has showed support for Milei. And vice versa: In fact, Uala’s recent E Series investment round was launched alongside the president.

Ualá’s CEO, Pierpaolo Barbieri, alongside President Javier Milei at the bank’s HQ. “We are happy when companies succeed. I prefer to come here and congratulate you than inaugurate a public construction site nobody wants or cares about”, said the president at the event.

Barbieri embodies the entrepreneurial spirit that resonates with the president’s supporters—a persona that keeps alive the memory of the hardships that fueled years of anger that led to Milei’s political ascent.

Company leaders like Barbieri and MercadoLibre’s CEO Marcos Galperín complement the government’s libertarian approach. As Palloti points out, it is not an overstatement to say Milei’s administration has delegated significant trust to these business leaders, even appointing some to advisory roles. For instance, Alex Oxenford, founder of OLX, was recently named Argentina’s ambassador to the U.S.

The near future of Argentina’s economy may hinge on the success of these moguls and their companies.

Despite the positive momentum, the country’s financial crisis continues to cast a shadow: out of 46 million people, 52.9% of Argentina lived in poverty by the end of the first quarter of 2024 —the highest rate the country has suffered in twenty years.

While other sectors, such as housing, face challenges under Milei’s so-called “shock therapy” economic policies, the tech industry has remained relatively resilient. This is partly due to dollarized salaries and outsourcing opportunities in the IT sector. A robust public education policy initiated over many decades has been a critical component in building a qualified tech labor pool.

“Argentina has to exploit the opportunity of having so much human talent forged by a strong public education system. Technology and knowledge exports are Argentina’s third source of foreign currency, bringing in over $9 billion dollars a year. There are also more than 5,000 tech companies employing at least 160,000 people,” Palotti said.

And how does Barbieri fit into this interesting time in Argentina’s history? “He is one of the entrepreneurs driving Argentina’s knowledge economy to new heights. Not necessarily because he’s focused on the country’s economic recovery, but because he is leading a more globalized economy from Argentina,” Palotti noted.

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