Who are we and what are we trying to do?
Palenca is a startup building the first payroll API for Latin America. We want to allow any company to verify income and employment data from clients and partners. For example: with Palenca, a motorcycle rental company could validate the earnings of a delivery courier who could benefit from better and fairer rates after securely sharing their work and earnings information directly from Rappi and iFood.
Our co-founders Pepe and Pierre left Uber to start Vech, a company that gave loans to Uber drivers and UberEats couriers. They quickly realized they needed a tool to verify income and employment metrics to correctly determine if and how much they could lend to each driver, so they built integrations for platforms like Uber, Rappi and Didi (99 in Brazil). This way their applicants could easily and securely validate employment and income data with Vech, instead of messy bank statements or fraudulent screenshots. We were the first users of this product, and we were surprised at how well it worked. So, we decided to commercialize this tool and this is how Palenca was born in 2021.
We were part of YCombinator’s S21 batch and raised a USD $2.6m seed round and later a $1m extension from investors like YCombinator itself, Gilgamesh Ventures, Foundation Capital and angels including founders from other top tier fintechs in Latam. We’re based in Mexico City and have operations in Mexico, Colombia, Chile, Argentina, Peru and now Brazil.
We’re on a mission to cover over 300 million workers in Latin America through our single API.
Now, we’re doubling down on our efforts in Brazil, the largest and most disruptive ecosystem for fintech in Latin America. Let’s dig a little deeper into our reasons for landing in the land of Carnaval.
Palenca’s first product was an API with integrations for Gig Economy platforms: Uber, Rappi, Didi then 99, iFood, Cornershop, and inDriver. Through this API, workers from any of these platforms could share their work and income data easily when applying for financial services. The great thing about the integrations to these platforms was that they worked wherever the platforms were active, not just Mexico. This was how we were able to work with amazing clients throughout Latin America.
This is the core product we are focusing on in Brazil. We want to be the API that every company offering financial services to the Gig Economy in Brazil uses to verify employment and income data.
Size of the Market:
Per the last estimates made at the end of 2022 by the Instituto de Pesquisa Economica Aplicada (IPEA), there were 1.7 million people participating as drivers for ride sharing and delivery applications. But if we look at more specific data points for each one of those it gets even more interesting.
Let’s start with ride hailing. Latinometrics posted a thread on Twitter detailing the fierce competition between Uber and 99 (owned by China’s Didi) for the ride hailing market in Latam, but specifically for Brazil it highlighted the magnitude of the market. For context, it’s Uber’s largest market outside the US.
On the delivery front, let’s take a look at some data points from Atlantico’s 2022 Latam’s Digital Transformation Report, highlighting the growth of iFood, the leading platform in Brazil, in the years following the pandemic.
The Gig Economy in Brazil is huge, competitive and has been growing: both for ride hailing and delivery. As more people make their livelihoods or earn extra income from these platforms, a whole adjacent market grows around this economy: ride hailing drivers will need to rent, lease or buy cars to drive in Uber or 99; delivery couriers will want access to rent, leasing and lending products for the motorcycles they will use to work everyday; and both ride-hailing and delivery couriers have a new income stream they can use to pay for all kinds of financial services (micro loans, insurance, benefits, PFM’s, new bank accounts, credit cards, etc.).
Palenca has no intention of actually offering any of these services, but we want to become an important player in this market by democratizing access to the customer’s data. With Palenca, any company that wants to offer any of the aforementioned services will be able to validate employment and income for gig economy workers in any of these platforms, easily. For workers, they’ll be able to access more, better and fairer financial services using their data from these platforms.
Our technology has already been trusted by banks like Neon, rental companies like Kovi, and larger platforms like Mercado Libre. Most importantly, over 600,000 workers have used us to share their data. We're very excited to begin our journey in Brazil.
If you liked what you're seeing and are interested in our product or just talking to us, shoot us an email: