Raoul Pal: The Journey Man
00:05:35 · Raoul Pal, Micky Malka
[00:05:35] S0: Why? How? [00:05:36] S1: I I understood flow of funds. I understood that, my dad had a private medical practice. And when oil was up, patients came in and spent money in their in their exams. When they didn't, they didn't. So I don't know. You just grew up seeing all of these things. So to me, understanding markets was very natural, very simple. And when I was 17, it was a couple of years after the Brady bonds were all restructured and Venezuela had restructured. There was a whole fixed income world out there that I started to learn about. So I grew up in the environment of bonds and issuing and and privatization of companies in Venezuela in the nineties. So The Broca Dealer was a great place to be. [00:06:17] S0: Amazing at 17. And then what prompted you to leave Venezuela? What was that story?
00:06:17 · Raoul Pal, Micky Malka
[00:06:17] S0: Amazing at 17. And then what prompted you to leave Venezuela? What was that story? [00:06:23] S1: So I started to grow that business in the in the mid nineties, and I started to do more with New York and bringing Americans to do business in Venezuela and all of that. And in one of my trips, I saw an ad for a billboard in New York for E*TRADE where you can trade online for $29.99 or $19.99. And I'm like, what is this? So I got on a plane. I went to the E*TRADE office, pretended I was looking for a job, got interviewed, and learned as much as I could of what they were doing with online trading on the Internet. And came back and decided to completely, at 23, shift everything I was doing to the Internet, shut down the offline part, and start building the online broker dealer for what was then the second largest market in South America. The biggest one was Argentina. Second one was Venezuela. Everything else was nothing. And in that journey, I met a dear friend who... Well, I mean, I met an entrepreneur who's become one of my closest friends, who you've you've know. And we started... We merged because he was doing the same thing out of Argentina, and we started this company called Patagon in '98... '97, '98. [00:07:35] S0: And then so you you then became... You and Wences did a few businesses together. Is that right?
00:07:41 · Micky Malka
[00:07:41] S1: We did. We we... This first company, this first broker dealer, we we... There was no VC money in Latin America. There was no venture. We were not the kids of anybody famous or we were middle class kids. So we had to raise money in The US. And we convinced a bunch of investors in The US to give us money to allow us to grow this. We grew it into Brazil, Mexico, Chile, all over the region. And in 2000, Santander bought the company from us in in the peak of Nasdaq. And once they bought it, they took it over. They merged it into their operations in every country. And when the Internet blew, they had zero conviction on the Internet after the dot com crash. So... Yeah. So we convinced them to to allow us to build an online bank in Spain called Open Bank, which still exists. We started... Lived in Spain, was behind that for a long time. We then left Santander after our contract was due and moved to Brazil. When Lula won, we had met Lula. Lula won. The new Lula is very different than the first Lula. And the first Lula was very much into trying to bank the unbanked, give them access to financial services, trying to get them into the ecosystem. Back then, Brazil had 40,000,000 bank people out of 160 back then. And we started our company. We started our technology company to serve the unbanked with financial products. So I lived in Sao Paulo for three years, did that, sold it to the largest bank in Brazil alongside with Wences. And then we moved together to Silicon Valley eighteen years ago. And that's been the whole different journey of our lives, our our fourth chapter... Third and fourth chapter.
00:09:22 · Raoul Pal
[00:09:22] S0: So talk talk me through that chapter. So then you... Did you go straight to start a venture capital business? Or
00:09:28 · Micky Malka
[00:09:28] S1: No. We came here in o seven right after the... Right before the financial crisis. We moved here in o seven. We had this idea that people were gonna pay with their phones. And bear in mind, this is before the iPhone. We knew that people were gonna pay using their phones. We knew that tapping gesture was the right gesture. So we came here to start literally a payment network running on stickers that had NFC on back of phones that you could tap and pay anywhere on feature phones. When the... Then the iPhone came out when we were here, and it allowed us to go a little bit faster. So we we we ventured back the company with VCs here in Silicon Valley because we learned that even though we were known and successful entrepreneurs outside, in Silicon Valley was different. You needed this... The seal of approval, but it had been the most meritocratic place. They didn't care who you were or where you came from. They cared more about the ideas that you wanted to build. So we started this we started this company, and it was scaling. It was it was going well, but it was too early, which as an entrepreneur is as bad as being too late. You have to know how to manage the timing of the execution. So when the... We were doing well, but it was not scaling at the pace that we wanted. And then the App Store shows up in 2010. So we pivoted the whole company to build the first wallet inside the App Store as a software company. And and that was the beginning of what I call the fintech revolution. It was probably around 2009, 2011, that era when when the App Store showed up, when the mobile browser was really functional, that suddenly, as we were doing this, we started to see many more opportunities and companies and ideas than we had seen in twenty years before. And it's because it was the right time. You had the right time of macro. You had a channel, the mobile phone on the App Store. You had a macro preparedness, which was the brands had suffered. All the incumbent brands had suffered through the financial crisis, so people had no trust in them. And we had unstructured data. So that was the beginning of becoming an investor. I decided that instead of being an entrepreneur of one company, what would it take if I can go help 20 grow worldwide with Adesis?
00:11:49 · Raoul Pal, Micky Malka
[00:11:49] S0: And I think you saw it early because of what you've gone through in Venezuela. You could see the issues within the banking system. You could see how you could create access to more people, you know, because you knew the root of the problems. [00:12:02] S1: That's exactly right. Everything I owe to who I became had to do with all that I lived growing up in Venezuela. Because even today, when you hear the headlines about inflation 3% a year, I'm like, a year? I remember being 10% a day. Like, this is... It's just like a different framework that allows you to just look at the world very differently. And it it made... I think that I was prepared twenty years as an entrepreneur to be ready to to launch Ribbit Capital when we had to launch it in 2012. [00:12:38] S0: And, you know, the story of Ribbit Capital has been an extraordinary story because of getting this thesis so right. You've got some of the, you know, really important companies in the space. So, you know, it's been an incredible success story. You know? [00:12:52] S1: There's a there's a long way to go. We're still early. [00:12:55] S0: We're still... Yeah. We are still early. So when does blockchain come into all of this?