Why I invested in Sonico
June 3, 2008
I first met Sonico at BarCamp in Buenos Aires last September. They were by far the most interesting company. Alec and I met Rodrigo, the CEO, and his team in person a few days later and we were blown away. It’s hard to put my finger on what it was exactly, but they just got it. They were fantastic people – all close friends from San Andres University in the mid to late twenties – and we loved their approach to business
They already had great traction and we were convinced we could do great things together as the things they were struggling with were exactly things we could help them with (structure of the company, fund raising, etc.).
We decided we had to work together and set about fund raising and restructuring the company (making it a Delaware C Corp, etc.). It ended up being much more difficult than expected. The company continued to grow extremely rapidly reaching nearly 17 million users in less than 9 months of operation! However, Argentine politicians seemed bent on making the country less appealing to investors. They increased their agricultural export tax (one of the worst policies possible to begin with) which led to riots by the farmers. They let inflation runaway and it’s now nearing 25% per year! Several American VCs were put off by the macroeconomic environment in Argentina.
In the end, the team and the story were compelling enough and Rod just succeeded in raising $4.3 million from DN Capital and a few investors. The project remains risky given the competitive nature of the market. Facebook effectively enters market through the expat community and sometimes takes off dramatically as it did in Turkey and Columbia in the past few months.
Despite the threat, I bet on Sonico because I believe that they will find a way to succeed given their single mindedness, extreme focus, doggedness and passion!
Rod, Alvaro, Tom, Gustavo, Alejandro and Anton: it’s all in your hands now, go kick some butt!