Robinhood-inspired app wants to disrupt Latin America market

A Colombian startup is offering cheap, easy stock trades in a bid to “democratize” access to Latin American stock markets, taking a cue from the U.S. trading platform Robinhood Markets Inc.

Luis Patt, Esteban Peñaloza, Carlos Guayara Photo by Bloomberg Mercury

Trii, a Bogota-based financial services company which launched in March, allows individual investors to buy and sell shares of Colombian — and some U.S. and Chilean– companies through an app on their phones for as little as 11,900 pesos (about $3) a trade. The startup sees an opportunity to disrupt traditional Colombian brokerages that cater to high-net-worth individuals with transaction fees of $30 or more, said Carlos Guayara, one of Trii’s founders, in an interview.

“Robinhood revolutionized the financial securities industry in the U.S. and we realized that nobody was doing that in Colombia,” he said.

Trii is already eyeing expansion into neighboring Andean countries Peru, Chile, Ecuador and Bolivia, where investing options for individuals are also limited, Guayara said.

While it took inspiration from Robinhood, Trii (pronounced “tree”) differs in that it focuses on buy-and-hold investors, rather than the high-frequency trading that made the U.S. company popular. In the long term, it plans to offer loans backed with the clients’ portfolios, he said.

Since launching, its app has been downloaded 130,000 times. It counts 75,000 users and $13.5 million in assets under management, which Guayara said is ahead of their expectations.

“We are proving our hypothesis that Colombians want to invest in the stock market,” he said.

Guayara said the addition of individual investors will bring needed liquidity to capital markets. Colombia’s benchmark MSCI Colcap index has dropped 14% this year in dollar terms, one of the world’s worst returns, according to data compiled by Bloomberg. Of the total value of the Colombian stock exchange, less than 5% is held by individuals.

Guayara and partners Esteban Penaloza and Luis Patt developed Trii, in part, during their time at the famed U.S. startup accelerator Y Combinator. The company recently closed a seed round in which it raised $4.5 million in equity and an additional $1 million for the loan business, valuing it at $40 million. It is backed by Bogota-based brokerage Acciones y Valores, which handles back-office services, Guayara said.

The founder said Trii sees potential in the underdeveloped stock exchange that integrates markets of Chile, Colombia, Mexico, and Peru known as MILA. While Brazil and Mexico are interesting markets, the competition there is fiercer, Guayara added.

Financial services startups in Latin America raised a record $4.2 billion through the first half of 2021, led by fundraising rounds from Brazilian and Mexican fintechs, according to CB Insights, which tracks the data.

— By Oscar Medina (Bloomberg Mercury)

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