VCs, unicorn founders back Truora, a startup that helps LatAm businesses onboard users via WhatsApp
Truora, a Colombian user authentication startup, has raised $15 million in Series A funding co-led by two Silicon Valley-based venture firms.
Propel Venture Partners and Accel led the investment for Truora, which valued the company at $75 million post-money.
Founded in August 2018, Truora was originally focused on background checks for gigster platforms. In 2018 and 2019, its biggest customers were ride-hailing companies, and with the pandemic, the company saw an increase in e-commerce and marketplace customers.
Truora participated in Y Combinator’s Winter 2019 cohort and soon after expanded into digital identity and authentication technologies. That March, it raised $3.5 million in a seed round co-led by Accel and Kaszek at a $15 million valuation.
Today, Truora describes itself as a SaaS startup that builds authentication and communication tools for Latin American startups, marketplaces, fintechs and banks. It specializes in user authentication and onboarding, mainly through WhatsApp.
Its technology includes automated onboarding with features such as automated chatbot conversations, facial recognition, document verification and background checks. In 2021, Truora launched its WhatsApp-focused Truconnect product in an effort to help companies connect with, and verify users, via a more accessible channel.
“We allow businesses to increase user acquisition, reduce onboarding dropoff, provide 360 customer support, and even sell their services, with minimum tech requirements from their end,” said co-founder and Maite Muniz, who serves as the startup’s chief product officer and is a former McKinsey consultant.
Today, Truora has over 400 clients in 9 countries across Latin America. Those customers include Rappi, Clara, Bancolombia, Adelantos, Mercado Libre, Didi, Homie and Global 66. It says it averages 400,000 to 500,000 validations and background checks monthly and has annual recurring revenue of over $4 million with expectations to grow by “over 5x in the next year.”
Co-founder and CTO David Cuadrado spent nearly five years as an engineer at Twilio while co-founder Cesar Pino worked as an engineer at the company for nearly three years.
The company has offices in Colombia, Mexico, Brazil, Chile, Peru and San Francisco. While its headquarters are located in Cali, Colombia, Muniz said Truora’s new main focus, or highest growing office, is Mexico City. In fact, the startup plans to use its proceeds in part to expand its WhatsApp onboarding offering, which includes functionalities such as automated conversations, in Mexico. Eventually, it also wants to expand further in Brazil.
CEO and co-founder Daniel Bilbao says Truora aims to lower the barrier to entry by making its products available to companies with limited tech resources. He said Truora can integrate into any of a company’s products in “less than two weeks.” Its most popular channel, WhatsApp, takes less than a day to integrate with a no-code flow builder, according to Bilbao.
WhatsApp is very commonly used across Latin America by an estimated 80% to 90% of the population.
“By making the integration of Truora’s authentication products into WhatsApp possible, the company is opening a potential addressable market in LatAm of $3.5 billion,” said Bilboa, a former investment banker at Bank of America.
Truora also plans to use its fresh capital to do some hiring and insists that it wants to create a workplace culture “where women can thrive.” Today, 70% of the company’s leadership team are women and 45% of its staff are women. It says its goal is to reach 50% of equal representation with more than 50 new jobs “with a special focus on women talent for product and engineering.”
Notably, dozens of angel investors also put money in Truora’s latest financing, including Rappi CEO Simon Borrero; Deel CEO Alex Bouaziz’ Muni Founder Maria Echeverri Gomez; Jeeves CEO and founder Dileep Thazhmon- Jeeves; Bitsports founder Tatiana Fontalvo; Morado founder Angela Borrero; VaaS founder Valentina Valencia, Searchlight’s Anna and Kerry Wang; GGV Capital venture partner and ex-Affirm COO Huey Lin and Latitud co-founder Brian Requarth.
Naturally, Truora’s investors are bullish on the company’s potential. Accel’s Rich Wong said he was attracted to a group of founders that was composed of a technical team that was former Twilio paired with great product and biz dev founders.
“It was the combination of the team that was at the core,” he said. “We had also seen the success of this type of business in companies such as Checkr so there was a direct analogy there as well.”
Wong also believed that it was logical that a regional/local provider would “be the first to understand the cultural differences and local issues, and tune a product to those needs.”
“For example, while WhatsApp is common in many emerging economies, it’s LESS of a priority in the minds of most Silicon Valley-based entrepreneurs,” he added. “So the team’s insight to focus on the use case is a good example of being in touch with the regional needs.”
Propel Ventures Partner David Morth said he’s known Bilbao for five years and “jumped at the opportunity” to back him and the team he had put together.
“While the authentication and KYC products are highly competitive the key differentiators for Truora lies in how the technology is delivered,” he said. “Truora is providing their capabilities to the financial sector in WhatsApp, targeting a segment of the population that was hard for fintechs to reach, we see a lot of potential in this model.”
Bonds See 2023 Recession, Stocks Aren’t So Sure
The yield curve is one of the most robust recession predictors and has signaled a recession may be coming since mid 2022. In contrast, U.S. stocks as measured by the S&P 500 are up materially from the lows of last October and only just below year-to-date highs, seemingly rejecting recession fears. Yet, fixed income markets see the Fed potentially cutting rates by the summer, perhaps reacting to a U.S. recession.
The Evidence From The Bond Markets
The recessionary evidence, at least from fixed income markets, is mounting. The 10 yield Treasury yield has been below the 2 year yield consistently since last July. That is is called an inverted yield curve and has signaled a recession fairly reliably when compared to other leading indicators.
Building on that, fixed income markets see almost a nine in ten chance that the Federal Reserve cuts rates by September of this year. That’s something the Fed has repeatedly said they won’t do on their current forecasts. Yet, a recession could cause it to happen.
The Stock Market
In contrast, the stock market shows some optimism. The S&P 500 is up 7% year-to-date as the market has shrugged off fears of contagion from recent banking issues. In particular, tech stocks have rallied.
In contrast, more defensive sectors such as healthcare, utilities and consumer goods have lagged in 2023. This suggests that the stock market is taking more of a ‘risk on’ position and is perhaps less worried about the economy.
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That said the stock market is a leading indicator of the business cycle, it may be that stocks see a recession, but are now looking past it to growth ahead and are factoring in the lower discount rates that a recession might bring as interest rates decline. Also, the U.S. stock market is relatively global, so the fate of the U.S. economy is a key factor in driving profits, but not the only one.
Monitoring unemployment data will be key. Though the yield curve is a good long-term forecaster of recessions it is less precise in signaling when a recession starts. Unemployment rates can offer more accurate recession timing. Unemployment edged up in February, suggesting a recession may be near, but we’ve also seen monthly noise unemployment. Two similar monthly unemployment spikes during 2022 both proved false alarms.
However, if we see a sustained move up in unemployment from the low levels of 2022 that may be a relatively clear sign that a recession is here. Economist Claudia Sahm estimates that a sustained 0.5% increase in unemployment rate from 12-month lows is sufficient to trigger a recession. Unemployment rose 0.2% from January to February 2023, so maybe we’re on the way there. Of course, the jobs market performed better than expected in 2022 and it could do so again. Still, fixed income markets do suggest a 2023 recession is coming. Stock markets don’t necessarily share that view.
Which States Have The Highest And Lowest Life Expectancies?
There’s a wide variance of life expectancies among the 50 states in the U.S., according to a recent report prepared by Assurance, an insurance technology platform that helps consumers with decisions related to insurance and financial well-being.
Figure 1 below shows the 10 states with the highest life expectancy, starting with Hawaii, the state with the highest life expectancy.
Figure 2 below shows the 10 states with the lowest life expectancy, starting with Mississippi, the state with the lowest life expectancy.
Assurance scoured life expectancy data prepared in January 2023 by the U.S. Centers for Disease Control and Prevention (CDC). With this data, Assurance created several easy-to-understand graphics that offer information about life expectancies.
Life expectancies are a basic measure of well-being
As measured by the CDC, life expectancies are a basic measurement of well-being in a broad population and not a prediction of how long an individual might live. The CDC measures the expected lifespan for a person born in the year of measurement. This measurement is calculated based on the assumption that the individual will live and die according to the rates of death that are prevalent in the measurement year for each age. There’s no assumed improvement or backsliding in the assumed mortality rates in future years for each age in the life expectancy calculation.
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By contrast, an estimated lifespan for an individual would consider their current age, their gender, and some basic lifestyle information. It might also attempt to project future improvements or backsliding in mortality rates based on key factors.
Significant influences on life expectancy calculations
Leading causes of death in the U.S. are heart disease, cancer, and accidents in that order. These immediate causes are significantly influenced by factors in the population such as poverty rates, educational attainment, rates of obesity and smoking, access to healthcare, prevalence of violent crime, and the support people receive from federal, state, and local governments. All these factors can vary widely among different states, which can be a key reason why life expectancies vary by state.
When you think about it, all these factors also have the potential to influence a person’s quality of life. The measured life expectancy rate rolls up all these factors into one objective measurement of well-being that’s based on population data.
In addition to the factors listed above, mortality rates increased and life expectancies decreased in the past few years due to the Covid-19 pandemic. A recent article titled “Live Free And Die” summarized recent research results that show that life expectancies in most countries around the world rebounded after the Covid-19 pandemic but that they continued to decline in the United States. Many of the reasons cited in the article for the continued decline in U.S. life expectancies are the same or similar to the factors listed above.
Why should retirees care about the life expectancies reported here if these measures don’t predict your own lifespan? Life expectancy calculations indicate the general well-being of the entire population in your area. While the living conditions in your area can influence your own lifespan and quality of life, retirees should focus on their remaining life expectancy given their age. They should also consider how the factors listed above that influence life expectancies in the population might apply to them.
You can obtain customized estimates of your remaining life expectancy at the Actuaries Longevity Illustrator. Part of your planning for retirement is understanding how long you an an individual might live, instead of relying on generalized information about larger populations you see in the media.
IRS Dirty Dozen Campaign Warns Taxpayers To Avoid Offer In Compromise ‘Mills’
Owing taxes can be stressful. Unfortunately, the actions of some companies can make it worse. As part of its “Dirty Dozen” campaign, the IRS has renewed a warning about so-called Offer in Compromise “mills” that often mislead taxpayers into believing they can settle a tax debt for pennies on the dollar—while the companies collective excessive fees.
The “Dirty Dozen” is an annual list of common scams taxpayers may encounter. Many of these schemes peak during tax filing season as people prepare their returns or hire someone to help with their taxes. The schemes put taxpayers and tax professionals at risk of losing money, personal information, data, and more.
(You can read about other schemes on the list this year—including aggressive ERC grabs here, phishing/smishing scams here and charitable ploys here.)
Tax Debt Resolution Schemes
“Too often, we see some unscrupulous promoters mislead taxpayers into thinking they can magically get rid of a tax debt,” said IRS Commissioner Danny Werfel.
“This is a legitimate IRS program, but there are specific requirements for people to qualify. People desperate for help can make a costly mistake if they clearly don’t qualify for the program. Before using an aggressive promoter, we encourage people to review readily available IRS resources to help resolve a tax debt on their own without facing hefty fees.”
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Offers In Compromise
Legitimate is a key word. Offers in Compromise are an important program to help people who can’t pay to settle their federal tax debts. But, as the IRS notes, these “mills” can aggressively promote Offers in Compromise—OIC—in misleading ways to people who don’t meet the qualifications, frequently costing taxpayers thousands of dollars.
An OIC allows you to resolve your tax obligations for less than the total amount you owe. You generally submit an OIC because you don’t believe you owe the tax, you can’t pay the tax, or exceptional circumstances exist.
Because of the nature of the OIC—and the dollars involved—the process can be time-consuming. It can also be confusing for taxpayers who may not have a complete grasp on their finances.
First, you must complete a detailed application, Form 656, Offer in Compromise. You must also submit Form 433-A, Collection Information Statement for Wage Earners and Self-Employed Individuals, or Form 433-B, Collection Information Statement for Businesses, with supporting documentation (generally, bank and brokerage statements and proof of expenses).
You’ll also need to submit a non-refundable fee of $205 and payment made in good faith. The payment is typically 20% of the offer amount for a lump sum cash offer or the first month’s payment for those made over time. Generally, initial payments will not be returned but will be applied to your tax debt if your offer is not accepted. Payments and fees may be waived if the OIC is submitted based solely on the premise that you do not owe the tax or if your total monthly income falls at or below income levels based on the Department of Health and Human Services (DHSS) poverty guidelines.
The IRS will examine your application and decide whether to accept it based on many things, including the total amount due and the time remaining to collect under the statute of limitations. The IRS will also review your income—including future earnings and accounts receivables—and your reasonable expenses, as determined by their formula. The IRS will also consider the amount of equity you have in assets that you own—this would include real property, personal property (like automobiles), and bank accounts.
Before your offer can be considered, you must be compliant. That means you must have filed all your tax returns and paid off any liabilities not subject to the OIC. After you submit your offer, you must continue to timely file your tax returns, and pay all required tax, including estimated tax payments. If you don’t, the IRS will return your offer.
Additionally, you cannot currently be in an open bankruptcy proceeding, and you must resolve any open audit or outstanding innocent spouse claim issues before you submit an offer.
You can probably tell—it’s a lot to consider. You may want representation. A tax professional can help marshal you through the process and offer practical guidance, while communicating what fees could look like.
By contrast, according to the IRS, an OIC “mill” will usually make outlandish claims, frequently in radio and TV ads, about how they can settle a person’s tax debt for cheap. Also telling: the fees tend to be significant in exchange for very little work.
Those mills also knowingly advise indebted taxpayers to file an OIC application even though the promoters know the person will not qualify, costing taxpayers money and time. You can check your eligibility for free using the IRS’s Offer in Compromise Pre-Qualifier tool.
“Pennies On A Dollar”
What about those promises that taxpayers can routinely settle for pennies on a dollar? Not true. Generally, the IRS will not accept an offer if they believe you can pay your tax debt in full through an installment agreement or equity in assets, including your home. That’s why the IRS tends to reject a majority of OICs that are submitted. The acceptance rate is less than 1 in 3, according to the 2021 Data Book.
The IRS will generally approve an OIC when the amount offered represents the best opportunity for the IRS to collect the debt. It’s true that there’s a formula that the IRS uses to figure out how much they think they can collect from you. But there is some wiggle room to account for special circumstances, including a loss of income or a medical condition. It’s worth noting those are the exceptions, not the rule.
While submitting an OIC may keep the IRS from calling you, it doesn’t stop all collections activities—don’t believe companies that suggest that submitting an OIC will make your tax debt disappear. Penalties and interest will continue to accrue on your outstanding tax liability. Additionally, the IRS may keep your tax refund, including interest, through the date the IRS accepts your OIC.
You may also be liened. In most cases, the IRS will file a Notice of Federal Tax Lien to protect their interests, and the lien will generally stay in place until your tax obligation is satisfied.
An OIC is a serious effort to resolve tax debt and shouldn’t be taken lightly. Be skeptical—if it sounds too good to be true, it likely is. If you’re considering an OIC, hire a competent tax professional who understands the rules and is willing to level with you about your chances of being successful—including other options. Don’t fall into a trap that can make your situation worse.
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