Note from BW of Brazil: With the rise of black identity politics in Brazil, it was only a matter of time before other concepts such as black enterprise and black money would soon arise as well. A new generation of Afro-Brazilian entrepreneurs is learning to take advantage of technological advances and taking the lead in advocating for black Brazilians to invest in themselves, the community, circulating money and constructing some sort of power base that has never existed for this parcel of the population.
It’s in this new spirit that entrepreneur Sergio All came up with the idea of creating the first digital account for black Brazilians. The idea behind the startup is a system in which basic financial transitions can be made and targets those who face the most obstacles in accessing financial services. Conta Black facilitates making payments, transfers and collections. for aspiring entrepreneurs, it offers the option of opening an account for a company in which one can choose between individual and corporate accounts, making access to investment lines also a possibility. Sergio’s idea has already brought success and expects to see explosive growth in years to come. Check out his story below.
After being denied credit, Sergio All created Conta Black and expects to earn BRL$ 12 million
By Helaine Martins
“You, as a black boy, will need to spend your life proving that you have the capacity. There will be few people who will see that you are competent without you having to prove it.”
Advertiser Sérgio All grew up listening to his mother telling him a reality about being black in Brazil, but instead of being discouraged, he took used this warning as a mechanism to strive to achieve his goals, not only his own, but those of his inner circle. Growing up, his father, a metal worker, and his mother, a maid, always believed that Sérgio was a little different from his other siblings.
“They saw a sparkle in the eyes of someone who was a dreamer. At the age of 10, I already started with this idea that I wanted to be an entrepreneur”, he remembers.
Now, at age 44, he is making turning dreams into the reality of his own business: Conta Black, meaning ‘black account’, which is a digital account specifically created with people who have difficulty accessing mainstream financial services in the large institutions. With Conta Black, customers can to make payments, carry out transactions and get credit without all of the bureaucracy. In addition, the services come with a financial education, so that the loan doesn’t spiral out of control and turn into a something unmanageable.
Conta Black was started in 2017 with an 80% black customer base, and is expected to bring in BRL $12 million in 2020 and serve 50,000 customers in the first six months alone. Sérgio’s experience in finding success came with similar pitfalls that other aspiring black entrepreneurs go through: the denial of credit. Living in a country in which privileges and penalties according to skin color are a reality, Sérgio believes the race issue was a decisive factor.
When Sérgio got his first and only job as an office boy in a large São Paulo department store at the age of 16, he knew that he didn’t want to be an employee. Leaving that job in the mid-90s, he had already become obsessed with video games to the point that he began jotting down tips of working the game commands to get to advanced levels and took notice that there was no way to exchange these tricks of the trade with other video game enthusiasts.
“At the end of the 90s, video games were hot and the internet was already a reality, so I created a project to bring the content of games to those interested. I called some friends and formed a team with designers, programmer and commercial. Together we created, in three months, a browser that served as a search engine for tips, SOS Games,” Sérgio says.
In a period of three years, his company had developed a database with 50 thousand tips on the most popular video games of the time attracting around about 10 thousand paying consumers that signed up. The action caught Apple’s attention and for good reason. A dominant name brand today, Apple was still little unfamiliar with most Brazilians at that time.
“They called us to a meeting and we left with the mission to participate in the process of popularizing the Mac [Apple personal computer] in Brazil. We were responsible for the development of actions for the promotion of games at all Apple resellers.”
Perhaps feeling that he had bigger fish to fry, other goals to accomplish, even with this success, Sérgio sold his stake in the company to his partners and moved on. With a background in advertise, he then decided to try his luck with an online-based communications agency. Again, he found success, running a company with 30 employees while marketing ten websites per month, but once again, he also had his eyes on other hustles. Soon, he saw the potential of getting in involved in the concert production game, dealing with international acts such as U2 and the Black-Eyed Peas.
By then, having proven he could be a successful entrepreneur, he knew that to expand his brand, he would have to seek larger investments in order to improve and renovate equipment. It was at this point that he ran into a problem that affects many Brazilian entrepreneurs, especially black ones: roadblocks created by banks financial entities.
“I had been an account holder for over ten years at the same institution, moving a lot of money and contracting all the services that the bank offered me. When I needed credit, I sought my manager and, unexpectedly, I received a resounding ‘no’. I questioned him and he said it was a systemic issue, that it had nothing to do with credit bureaus. That is, he could just press the button and approve the credit. I left there frustrated and with the certainty that the racial issue had been decisive,” he says.
Based on his own experiences in attempting to access credit, Sérgio started to wonder if there were other black people receiving rejections on a daily basis. How many black people that could have great ideas for businesses or already have businesses but need funding to grow their business but can’t get any financing? Research conducted by the Instituto Locomotiva shows that this is pretty common experience. According to the institute’s study, 45 million Brazilian don’t even have a bank account and of that total, nearly 70% are pretos (blacks) or pardos (browns/mixed). Perhaps even more startling is the fact that, of the adult population, one-third of the Brazilian population doesn’t have a bank account. Even so, this group still spends over R$800 billion (reais) every year.
“We are talking about people who have problems opening an account due to restrictive issues, who have no way of proving income, who don’t have access to agencies where they live or even people who are unhappy with the system. After that ‘no’, I went home designing a solution for this part of the population to no longer depend on the banks and to feel included again.”
As he thought about his latest idea, Sérgio continued running his communications company. It took two decades to put his idea into action, always thinking of ways to improve the project and keeping his eyes on any changes coming out of the world of technology.
“But every time I presented the project to people, they didn’t doubt the project itself, but my ability to run a business that today is dominated by a very select group in the country.”
His work would eventually pay off, as in 2017, after pitching his business proposal to various investors, Conta Black officially debuted. It’s the digital account in the country that was created by blacks. While the name and its creators suggest it targets only the black population, its products and services are available for anyone. Its platform presents ease of use, access, the ability the make payments, transfers and charges and also offers a choice between personal and corporate accounts. The digital account also offers lines of investment. Another great feature of the digital platform is the possibility of clients being above to receive part of the fees paid back after a little more than a year of using the services. Today, the company functions only online, but in this day and age of cell phones, the development of an app is already in the final stages of development.
“We work with three pillars: include, teach and share. We understand that the challenge of unbank and financial exclusion also impacts social inequality and the economy of the poorest. Therefore, we take it as a mission to expand access to financial services for all people, without bureaucracy, but with financial education, through simple tools, so that credit also does not become an enemy”, explains Sérgio, who opened the company with Fernanda Ribeiro and includes another six partners.
In less than three years, Conta Black has already attracted 2,000 customers, of which more than 80% are black. Considering the challenges he went though in the world of finances, Sérgio isn’t surprised by this.
“The black entrepreneur has been denied credit three times more than the white one with the same conditions here in Brazil, according to the IDB (Inter-American Development Bank). In other words, we have a portion of the population, in its black majority, which is not served in a dignified manner, and Conta Black aims to help solve this problem,” he explains.
In addition, this part of the population, about 54%, is represented when seeing a company in the financial sector with black people. “This becomes a point of representation and shows that we can, yes, organize and be seen as a financial power”, he adds.
For 2020, the company plans to reach 50 thousand customers in the first half and earn BRL $12 million in the year. To this end, it will work with corporate accounts, whose contracts are being defined, and plans to launch new products and services, such as a credit card, investment portfolio, microcredit tool, Maquininha Black Pay, insurance, cell phone recharge and shares via WhatsApp, to open an account and make transfers, for example. But, with the same sparkle in his eyes when he was a boy, Sergio still dreams big.
“Who knows, maybe in the future we will be a bank with black people?”