Venture capitalists are unique investors who believe in and back a startup based on a vision entangled with the business model idea, the founders, and the market.
Globally, many ventures fall into the so-called “Valley of the death”, a place where numerous startups stumble and do not generate revenues from initial investments, and may never do. Epakon Capital is one of the remarkable venture funds that achieved a great milestone despite adversity: investing successfully in Venezuela.
Led by Harvard MBA and former IBM engineer, Diego T. Salas, Epakon Capital was able to raise the initial $300k of venture capital for Yummy, a delivery startup founded in Venezuela and beginning operations in early 2020. Today, Yummy has been able to raise $33 million from Y Combinator, Hustle Fund, Necessary Ventures, and other angel investors. These funds have fueled the expansion of Yummy throughout Latin America.
As a part of a Webinar for Venecápital members, Diego discussed the challenges of raising capital for a startup in Venezuela. One of the main elements to overcome was the country risk of a country for which investors have little appetite due to lack of economic stability. In his view, this created a discount premium larger than other countries in the Latin American region.
The vision of Diego Salas was to take the “First mover advantage”, where a tech company establishes the ground for the development of a startup ecosystem like Rappi and Paypal did in Colombia and United States, respectively.
For Diego, Epakon was able to bring the first formal type of venture capital investment from an international fund and promoted the development of an ecosystem in Venezuela where other startups like Vikua, which is also part of Epakon’s portfolio, are gaining traction.
One of the key elements for Epakon was to complete an entire year of operation with Yummy, which created the revenue data stream that serves as a factual argument for the existence of opportunities in Venezuela. This data allowed Yummy to engage in a new round of fundraising with international funds, reaching current levels.
Moreover, Epakon’s incursion in a frontier market like Venezuela gave them a profile that encouraged other startup founders in emerging markets to trust Epakon, as they recognize the fund as an investor with the capacity to manage complexity in adverse economic environments.
As a venture capital fund, Epakon’s vision is to create positive change in the communities they invest in while maximizing investment returns for their investors and thinking about long-term value creation and maximization. Their unique curated network allows them to provide great value to the companies they invest.
Epakon’s investment thesis focuses on pre-seed/seed startups with successful business models, regional scalability, and community product-fit for the Latin American market. They also focus on the technology-enabled sectors of logistics, Software-as-a-service (Saas), marketplaces, and fintech.
Diego Salas is the managing partner at Epakon Capital, an early-stage, high-growth venture fund investing in category-defining businesses, which holds one of the best-performing vehicles in the region. He is also the head of Strategic Finance (Fundraising, Mergers & Acquisitions) at Yummy, Inc, having led the expansion of the most successful startup operation in Venezuelan history. His expertise is at the intersection of technology, finance, and countries in Latin America. Diego holds an MBA from Harvard Business School, and a Bachelor of Science in Finance and Emerging Markets from Northeastern University, where he graduated magna cum laude.