Building an emerging market fintech powerhouse

The FR contributors Alex Lazarow and Vikas Raj recently interviewed Sergio Fogel, co-founder of Uruguayan payments fintech dLocal, and co-authored today's piece. Vikas Raj is the general partner and co-founder of ResilienceVC, a venture firm investing in early-stage embedded fintech startups that build financial resilience for users. Alex Lazarow is an author, speaker and global venture capitalist. He is managing partner of Fluent Ventures.

Within the startup ecosystem, the Silicon Valley playbook has long been the gold standard. Yet, outside the bubble of California, a new wave of innovators has been setting a different path — one rooted in local insights, driven by global ambitions, and dependent on flawless execution. The Uruguayan fintech payment firm dLocal has become a leader in cross-border payments for emerging markets and illustrates this approach.

The company became Uruguay's first unicorn and is presently listed on Nasdaq. It offers more than 900 payment methods across more than 40 countries worldwide and has a customer base that includes giant tech companies like Amazon, Uber and Booking.com.

Most pertinent to this column, dLocal has challenged the status quo, redefining the playbook for scaling globally.

In a recent discussion, Sergio Fogel, dLocal's co-founder, co-president and chief strategy officer, shared his playbook for success, explaining how he built a unique early international strategy, a strong culture, and developed a unified offering tailored for growth in emerging markets.

Solving real pain points: dLocal innovation rooted in frustration.

After earning an MBA from INSEAD, Sergio and his co-founder began their entrepreneurial journey by selling virtual phone numbers. They saw firsthand the prevalence of fraud in online transactions and payments. By combining this insight with Sergio’s experience in payments while traveling, they arrived at the original idea for dLocal.

“Focus on problems that hurt you,” Sergio argued. “Solve them, and you’ll find others with the same need.”

dLocal’s platform addressed two major issues in emerging markets: high transaction rejection rates and limited access to international credit cards for a huge segment of the population. In Latin America, local payment methods like Pix in Brazil dominate, but these are relatively recent developments. A truly international payment solution did not exist.

By enabling companies to tap local payment networks easily, the company has become one of the largest tech companies in the region. It is hard to understate the reach of the cross-border payment platform. In 2024, the company processed $6.5 billion in total payment volume (TPV) in Q3 alone.

Here are three unique approaches to how they scaled the business.

1. Born global: Market size constraints create entrepreneurship necessity

Starting a company with a global approach creates meaningful challenges. In fintech, dealing with diverse regulation and payment systems adds more complexity to the equation.

However, starting in a small market like Uruguay, market size is an important consideration. Ambitious entrepreneurs must think beyond their borders from the start. For dLocal, internationalization was not a strategy but a necessity. 

“We launched in Brazil before Uruguay,” said Sergio. 

This mindset helped the company to scale rapidly, launching in five countries before addressing its home market. “It forces you to think internationally if you have ambition,” he noted.

2. Culture over geography: Building a unified global team

Beyond operational complexities, scaling successfully in more than one continent requires a cohesive culture. For dLocal, this was possible through a combination of leading by example and encouraging geographic mobility.

“We love it when people move geographically,” shared Sergio. “It helps us understand the challenges of working in another geography, diffuse the culture, and transmit how we like things done.” 

By embedding employees from different regions into new markets, the company fostered cross-cultural understanding while maintaining its core value. Sergio’s global background and experience working across multiple markets set the stage for his own success.

Today, dLocal’s 1,100 employees operate across South America, Africa and Asia, sharing a common ethos despite their diverse backgrounds. This culture of “making things happen” and putting the customer first has been crucial in uniting the team.

Reflecting on the potential of acquisitions to drive geographic growth, Sergio argued that this strategy should be used only in very specific cases. 

“Integrations are a big challenge,” he said.

The bar for them is high. Sergio believes this has been an advantage in competing with companies that grew through acquisitions. Usually, the M&A playbook leads to companies offering different APIs, and integrations for every country, ultimately lacking product consistency and resulting in poor customer service. By contrast, dLocal offers a single product experience.

3. Turning compliance into a competitive advantage

Operating in fintech across emerging markets is notoriously complex due to regulation, with varied rules around currency flows, taxes and cross-border payments. Rather than treating compliance as a hurdle, dLocal has used it to build trust and a defensible moat.

“We act as a cross-pollination sector of regulation,” explained Sergio. “We show regulators how Brazil handles this, or Nigeria, or Mexico.” 

This proactive engagement in every new market since the early beginning of the company has allowed dLocal to align with local regulators, while helping shape the emerging regulatory frameworks.

Sergio believes the regulatory global landscape will continue to become more complex. Regions like the European Union are not only issuing new compliance requirements for next year, but are already setting terms for subsequent years, placing an ever-growing burden on fintech players. A lot of emerging markets may follow this trend. 

“It will become harder for newcomers to become compliant,” he explained. 

Even incumbents may struggle to adjust to consistently changing regulatory frameworks. If this trend continues, fintechs will continue to be able to build moats through deeper understanding of regulatory differences.

Key takeaways

dLocal’s journey offers a fresh approach to achieving international scale from an emerging market perspective. By being born global, solving real pain points, fostering a unified culture, leveraging regulation strategically, and scaling with a consistent offering, the company has created a playbook that goes beyond Silicon Valley norms.

For entrepreneurs around the world, dLocal’s story serves as a reminder that innovation doesn’t have to follow the Valley’s rules — it can thrive anywhere with the right mindset and approach.

This column is an adaptation of an interview that was originally broadcast on the Pnyx podcast.