Venture capital-backed endeavors are sometimes viewed in a negative light, an example of the voracious capitalist out to turn a profit. But at least some in the industry see venture capital as having huge potential social benefits, backing companies that solve problems which would otherwise be too big to address.
Fernando Gonzalez is one such individual, a partner at QED Investors, a VC in the fintech space which invests in “pragmatic disruptors who are the future of finance.” Gonzalez is a fintech expert turned investor, and draws on his observations in Silicon Valley to direct his investment philosophy.
Fernando Gonzalez, CEO-In-Residence, Coru
Fernando Gonzalez
“Many of the technology models that have disrupted the world, and some which are the highest valued companies in the world, started as venture capital backed companies,” he says. “And one of the special characteristics of these models, I would say, at least from my perspective, is these are companies that are going after huge problems. Problems that are so big, they will be really hard to address without a significant amount of capital.”
One of those companies under the QED umbrella is Coru, a Mexican financial education app, where Gonzalez also serves as CEO-in-Residence. Coru’s mission is to empower and enable financial wellbeing, in a country where 74% of people experience financial stress on a daily basis, Gonzalez explained in a recent interview.
“This is a problem that we cannot live with,” Gonzalez says of that widespread financial stress.
“And we’re determined to fix it. Thankfully, it’s a very unique position for the first time in history, in that almost every adult in the world, and certainly in Mexico, has a smartphone. And with that smartphone, with that internet-based connection, comes a lot of data that didn’t exist before.”
Coru uses that data to achieve their mission in two ways. The first is offering users wider access to a range of financial providers. User data is leveraged to direct them to the best financial providers for their specific needs.
“At the end of the day, it’s not us who will end up being the brokerage account for users’ investments, their credit card provider, or their payments methods,” Gonzalez clarifies. “What we’re doing is we’re learning about the needs of the user and we’re giving the user options of products that they should consider. We are creating greater transparency of their options, and we’re personalizing those options for the needs of the user.”
The second, and most prominent, pillar of Coru’s mission is providing AI-supported financial coaching and education. It’s important, Gonzalez says, to ensure users are having human conversations, even when AI comes into the equation.
“We’ve put a lot of effort into making the experience of the coach [on the app] very human,” Gonzalez says. “Because that’s what people engage with best. In order for us to be able to serve 44 million people it’s impossible to do that entirely with human coaches. We need to be able to leverage technology. So, what we have is a hybrid of both.”
Users begin by training with an AI-coach, designed to feel as close to true human interaction as possible. But as soon as a conversation reaches beyond the scope of the AI script, a “flesh-and-blood person engages,” according to Gonzalez. But Coru isn’t simply designed as a chat app. The challenge is to create a truly engaging experience, in a subject where many others have tried and failed.
“One of the things we found is that financial education is, by definition, boring,” Gonzalez admits. “For example, it’s really hard to teach someone about mortgages when they are 24-years-old and they’re just entering the workforce. It’s not that they don’t understand what a mortgage is, it’s that it’s completely irrelevant at that point in their life.”
Objective-based and gamified learning are what set Coru apart, Gonzalez says: “That proves to be much more effective, because those are the people that actually achieve their goals. It’s not because of the information, it’s because of that engagement.”
Gonzalez’s deep belief in Coru’s mission—serving millions of Mexicans who don’t know where to begin financially—comes at least in part from his own personal experiences. As a young man growing up in Mexico, he saw his father suffer from the effects of poor financial planning.
“I saw my dad first starting in the corporate world after getting his education working for Ford Motor Company, and then starting his own business. He risked it all to get his own business, only to see it destroyed in the 1994 crisis,” he says, referring to the Mexican peso crisis of December 1994, in which the Mexican peso was suddenly devalued against the U.S. dollar. “He had a bunch of debt in U.S. dollars and had no choice but to file for Chapter 11, or the equivalent in Mexico.”
While his father eventually bounced back, Gonzalez took the lessons learned forward into his own life.
“Now that I’m so deep into the financial services space, I look at the strategies that they use for financing, the expansion of it,” he says. “I look at [my father’s choices] with the benefit of hindsight, with the knowledge that I have right now, and I’m like, how can you have done that? And I want to say I would never do that myself. But it’s a lesson that, if you haven’t gone through that experience, you wouldn’t have.”
While that lesson may have led many to become more financially wary and conservative, Gonzalez has a passionate commitment to remaining generous, one of the values which led him to mission-driven fintech.
“It’s a story of hard work, resilience, and just helping each other,” he reflects. “In the case of my family, there was a lot of support among the siblings and cousins, and always being generous with the people that were kind to them in their lives. And it’s those sorts of things that stuck with me.”
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