From Quant Trading in Singapore to Fintech in Mexico: How to Enter a More Exciting Jungle

When I published an interview about the future of sales & trading last year, I mentioned that fintech was a popular exit opportunity.

The only problem is that there aren’t that many “real” trading roles in fintech outside of crypto.

But there is another approach: leverage your finance skills to move into entirely different areas, such as corporate strategy and fundraising at promising startups.

While you’re at it, you could also hop on a plane to Mexico and use the trip to improve your standup comedy.

It may sound unbelievable, but I recently spoke with a reader who did all of this and more:

How to Quit the “Hottest Field in Finance”: Quant Trading

Q: Can you start by giving us a quick summary of your story?

A: Sure. I was born in India, moved to Singapore at a young age, did all my education there, and completed the required army service.

I went to one of the top business universities and did a sales & trading internship, which made me interested in the rates trading desk.

Back at school, I switched from engineering to quant finance, and I liked it so much that I didn’t care that it was a tough major with a reputation for low GPAs.

I eventually won a full-time role in the algorithmic trading desk of a bulge bracket bank…

…but quickly realized I hated it.

The problem was that my entire job was managing hedging algorithms, and we were effectively just market makers – we couldn’t take positions due to Dodd-Frank.

I thought about looking for other jobs, but my girlfriend was in Mexico, so I decided to quit, buy a one-way plane ticket there, and look for finance jobs in Mexico instead.

Her parents were both in the finance industry, so I won interviews through their network.

But there were many, many, many “issues” with working at large banks in Mexico.

So, I switched gears and started looking at fintech startups in the lending and payment spaces instead.

I networked my way into corporate strategy, finance, and data science roles at Konfio and DiDi Mexico, and now I’m joining a “challenger bank” (Fondeadora) here.

I also started a side business doing fundraising consulting for startups and continued to improve my standup comedy, which I had started in Singapore.

Q: OK, that is quite a story – a few questions before we get into the details.

First off, why didn’t you just move to another trading desk, like rates or credit? And what about buy-side roles such as quant funds?

A: Part of it was that I just didn’t like the full-time work environment at big banks; I liked trading and coming up with new strategies, but not everything else that came with it.

Also, after living in Singapore for most of my life, I was looking for a more significant change and a completely different environment.

As far as buy-side firms, one of the problems with S&T exit opportunities is that you usually need significantly more full-time experience to win them.

In investment banking, people work for a year or two and then move into private equity, corporate development, or hedge funds, but in sales & trading, they want to see a track record where you’ve managed your own book for several years.

So, it’s tough to transition over unless you’re at the Associate or VP level – and I was not.

Q: OK. So, then you went to Mexico… what were the “issues” you ran into when recruiting for finance jobs there?

A: First off, I did not know Spanish at all at the time, so investment banking at most firms was not an option.

You wrote about investment banking in Mexico a long time ago, and not much has changed since then – it’s still very “family”/nepotism-oriented, and it’s closed off to most foreigners.

Also, starting salaries are ridiculously low – as in $1,000 USD per month for Analysts, which is not enough even in Mexico.

Finally, I knew that I wouldn’t like the bureaucracy of a big bank all over again, even if it was in an emerging market.

Breaking Into Fintech – at a Bar

Q: Fair enough. What was your next move?

A: When I was out at a bar, I met the CEO of Konfio, who had previously been a trader at Deutsche Bank.

(Konfio is an online lending platform for small and medium businesses.)

We connected well since we were both ex-traders who had come to Mexico, so I went through a few informal interviews, met the rest of the team, and he invited me to join.

I joined in a finance/data science role, and my first task was to help the company get its act together.

Not only were unsecured loans to SMBs incredibly risky in Mexico (default rates were often 30%+, or even 50%+), but no one was measuring anything – it was growth at all costs.

No one knew the size of the loan portfolio, and they were assessing credit risk by… applying statistics to peoples’ names.

I started creating databases to organize everything, learned SQL, and made sure we started using tax and performance data to evaluate credit risk.

The company kept growing and improved a lot over a few years, and I then switched roles and helped them raise a total of $85 million USD in debt and equity.

Q: And what was that like?

A: At the time, it was ridiculously difficult to raise money because Mexican venture capitalists were risk-averse and wanted to copy U.S. companies or only invest in “the next big thing.”

There are also a lot of rich people in Mexico who want to throw money around, but who don’t necessarily provide guidance or support for their portfolio companies.

Our CEO ended up making dozens of trips to fintech events and conferences to pitch the company to potential investors.

Out of ~100 pitches, we got a 5% success rate (in terms of initial interest from firms), and two firms submitted term sheets.

We picked the better offer, and the Partner from that firm joined the Board.

In some rounds, we had to sell sizable stakes in the company because it was challenging to raise institutional funds at the time.

As of 2020, things are quite different: there’s a lot more money pouring in from the likes of Softbank, which raised a $5 billion fund for LatAm.

Sequoia and a16z are also planning to enter the market, believing that “Fintech Mexico” (and Latin America, more broadly) is extremely promising.

Q: Thanks for sharing that.

Why did you leave Konfio and move to DiDi after doing all this?

A: I came a long way in a few years as the company grew, but I realized that the advancement opportunities were narrowing once the company had reached a certain stage.

The firm had started hiring so many senior executives that I knew someone with my age and experience would not be able to go much further.

I joined DiDi because they let me work on payments – one of the three big areas in fintech, along with lending and crypto – and launch a debit card in Mexico.

I also thought I would be useful for the company because they were very “left-brained,” while Mexican culture is very “right-brained.”

Having grown up in Singapore and India, but now living in Mexico, I was familiar with both ways of thinking.

I stayed at DiDi for around a year and completed my debit card project – but then everything started shutting down due to the coronavirus, so I felt it was time to move on again.

I’ll be joining a “challenger bank” in Mexico (Fondeadora), which was originally a crowdfunding platform that Kickstarter acquired, and which later pivoted into a banking platform.

I will be acting CFO there.

Q: Wow. I realize it’s a startup, but how did you move from a junior data science/finance role to the CFO level in only ~5-6 years?

A: As you just said, it is a startup, so this is different from being CFO at a Fortune 100 company, or even being a Regional or Departmental CFO or something similar.

I won the position partially through networking and my track record at Konfio and DiDi, but another point that helped was starting my own side business that offered fundraising consulting for startups.

Entrepreneurship was becoming more popular in Mexico, but founders often didn’t know what VCs were looking for, or how to build models or presentation decks that would entice them.

So, I took on 3-4 clients at a time, charged a monthly retainer and a success fee, and taught them what VCs looked for in pitch presentations.

Sometimes I created new presentations or built financial models for them.

Very few other people could offer this service because only company founders knew enough about fundraising to teach it – and most of them were busy running their companies.

The company I’m joining now was a client that wanted me to work full-time for them, which I happily accepted.

Long-Term Planning and Thoughts on Startups, Fintech Mexico, and Standup Comedy

Q: So, what are your long-term plans? You’ve made quite a few career moves in a short amount of time.

A: I’m planning to stay with my new company for the long term, set up their financial systems, get them out of trouble spots, and potentially do more fundraising.

I have thought MBA programs and moving to other countries, but I want to stay here for now to take advantage of the fintech boom.

I don’t think I want to go back to Singapore because it’s a slightly more risk-averse country, and I want to leverage my first-mover advantage in the Mexican startup world.

Q: Taking a step back, what makes “Fintech Mexico” (or Latin America) such a promising area?

A: There are two schools of thought: the optimistic one and the pessimistic one.

The optimistic one is that there’s huge smartphone penetration, but very low banking penetration, partially because of an old-school/analog banking system.

People pay a lot of money for stupid things such as high credit card interest (rates are sometimes over 100%!).

So, investors think there’s a huge opportunity to use mobile technologies to improve banking and everyday finances for normal people.

The pessimistic/cynical school of thought is that investors can’t find the returns they’re looking for in developed markets anymore.

As a result, they’re taking a chance on emerging markets such as LatAm and throwing money around to see what sticks.

The truth is somewhere in the middle: there is a huge opportunity, but there are also lots of silly or nonviable ideas that won’t survive the bear market.

Overall, I’m most optimistic about fintech startups and challenger banks (Nubank in Brazil being the best example), but other areas have had success stories as well (e.g., DogHero in Brazil and Moons in Mexico, which was in Y Combinator).

Q: Great. Do you have any general thoughts on startup life vs. working at a large bank?

A: Startup life is far less “glamorous” than you would think from reading news reports and books and watching TV shows about it.

The hours are long, the pay is low, there’s a constant lack of infrastructure, and you always have to explain why 2-3 things are going poorly even when you have no answers.

I’m taking a pay cut at the company I’m joining, and I expect many sleepless nights before getting any downtime.

If you can’t deal with constant uncertainty and massive swings up and down, you should stay away from startups and stick to banks.

The upside is that all the work you do improves the company, and since there’s little structure, you can potentially advance more quickly and earn significant equity in the process.

Q: Well said. Finally, can you tell us about your standup comedy hobby?

A: I had always been the “class clown” growing up, but I didn’t realize I could make money with it for a long time.

I did some performances in Singapore, but it’s a tougher crowd there.

I’ve had more success in Mexico – even though I do my routines in English – because I get new material all the time.

The standup comedy scene here is going through a renaissance, and there’s now a decent number of English-speaking comedians (and plenty of ex-pats to listen to them).

In comedy, reading the room is half the battle. If you understand the crowd well, you could go on stage and make people laugh even if there’s a language barrier.

My usual routine goes something like: “I’m a confused foreigner in Mexico, here are my experiences, and here’s how the cultures of Mexico, Singapore, and India compare.”

If you’re interested, you should come to my comedy club the next time you’re here.

Q: Will do! Once this coronavirus crisis has passed, anyway.

Thanks for your time and for sharing your story!

A: My pleasure.