Interview with Mario Aletti, Chief Operating Officer, Flow48
Check out Eqvista’s Founder spotlight interview with Mario Aletti, Chief Operating Officer of Flow48, where he shares his role as COO for the company’s success. We invite you to embark on an exciting journey filled with captivating stories and fun challenges in Flow 48.
Welcome, Mario Aletti! Can you provide an overview of Flow48 and its unique position in the market, especially in offering a financing layer for SME growth by transforming future revenues into upfront capital under flexible terms?
What truly sets us apart is our sector-agnostic approach. Unlike other revenue-based finance companies in developed markets that often specialize in specific sectors, like SaaS in the U.S. or e-commerce in Europe, Flow48 is unique in its capacity to serve a diverse range of industries. We’ve tailored our risk engine and underwriting process to be adaptable, enabling us to support SMEs across various sectors, as long as they align with our financial criteria.
Moreover, a key differentiator for Flow48 is our strategic approach to maintaining a low Customer Acquisition Cost (CAC). Instead of investing heavily in a direct sales force and underwriting SMEs as direct customers, we focus on B2B2B-type partnerships. This approach allows us to leverage network effects by collaborating with companies that already serve our target demographic. These partnerships not only enable us to efficiently offer our financing products to a broader audience but also enhance the value proposition of our partners. Their customers can not only benefit from our partners’ services but also gain access to flexible financing solutions. This synergy, fostered by our low CAC model, is pivotal in providing an enhanced and more comprehensive service offering, making us a unique and valuable player in the market.

What inspired the creation of Flow48, and what specific challenges in SME financing Were you aiming to address the development of this innovative platform?
The genesis of Flow48 was deeply rooted in the challenges that are still present in the region. One of the most glaring issues is the difficulty SMEs face in accessing bank financing. Traditional banking systems often require a substantial track record, typically three to four years of operations, and a considerable asset base on the balance sheet. This stringent criteria leaves many companies struggling for financial support.
Banks here have historically concentrated on larger sectors like energy and real estate, inadvertently sidelining the SME ecosystem. This oversight is increasingly significant, especially as governments are advocating for economic diversification away from oil, with SME empowerment being a crucial driver.
However, a unique challenge in our region, which is emblematic of many emerging markets, is the lack of formal financial reporting among SMEs. Unlike developed markets where strict regulations and institutions necessitate formal auditing and reporting, SMEs here often operate without these standardized financial protocols. This creates a diverse and complex landscape for alternative lenders like us, as each SME presents a unique operational and financial profile. In response to these challenges, Flow48 was conceived to bridge this gap. We are committed to designing a platform and an underwriting process that not only accommodates but also leverages the uniqueness of each SME. Our goal is to transform these challenges into opportunities, providing tailored financial solutions that align with the distinct needs and realities of SMEs in this evolving market landscape.
Could you elaborate on your role as the Chief Operating Officer at Flow48? How does your experience contribute to the company’s strategic vision and success in transforming the SME financing landscape?
In my role as Chief Operating Officer at Flow48, I bring a rich experience from my previous tenure at an asset manager, where I was intimately involved with an asset-backed lending fund for SMEs across Latin America and the U.S. This experience granted me a deep understanding of SME lending dynamics, their unique needs, and the nuances of deal assessment, particularly in varied geographical contexts.
Although at Flow48, we focus on providing smaller, short-term unsecured working capital loans, contrasting with the larger ticket sizes and secured nature of my previous engagements, the core principles of analyzing SME financials remain fundamentally similar. It’s a delicate balance of art and science, and my background has been instrumental in navigating these complexities.
As COO, I play a pivotal role in shaping and overseeing our entire operational process, especially our underwriting procedures. My collaboration with the risk team is vital in refining our risk engine, ensuring it’s attuned to the intricate realities of SME financing. Simultaneously, my involvement with the tech team is focused on tailoring our product to meet the evolving needs of SMEs effectively.
Additionally, my comfort and proficiency in fund management are crucial as I lead our capital-raising efforts, a key component in funding our portfolio. Balancing this with the overarching goal of ensuring smooth operations, my role at Flow48 is integral to our strategic vision and success, as we endeavor to transform the SME financing landscape with innovative, responsive solutions.
With your background, including your tenure at AV Financial Group as a Portfolio Manager, how has your experience in financial services influenced your approach to building and scaling Flow48?
My tenure as a Portfolio Manager at AV Financial Group profoundly shaped my approach to building and scaling Flow48. The key lesson I learned there was the paramount importance of proper portfolio management as a tool for minimizing risk. This experience has been instrumental in shaping my perspective on risk mitigation, particularly in the context of SME lending.
At Flow48, this understanding is central to our operations. We apply these principles of diversification to manage risks effectively. It’s not just about identifying and backing the right SMEs, but also about how we structure our overall portfolio to withstand unforeseen challenges. This approach helps us maintain a robust and resilient lending platform, capable of supporting SMEs with minimized risk exposure.
This philosophy, derived from my background in asset management, is a cornerstone in our strategy at Flow48. It guides how we scale our operations, ensuring that as we grow, we maintain a balanced and secure portfolio that aligns with our mission to empower SMEs sustainably and responsibly.

As the COO of Flow48, what are the unique selling points or features that make Flow48 stand out in the B2B lending and SME financing space, and how do these contribute to the platform’s effectiveness?
One of the key differentiators of Flow48 in the B2B lending and SME financing space is our innovative approach to the underwriting process. We stand out by harnessing data from a multitude of sources, enabling us to triangulate information for more accurate underwriting decisions. Our platform isn’t just a stand-alone system; it’s an integrated ecosystem that seamlessly connects with payment gateways, ERP systems, and e-commerce platforms. This integration allows us to gather real-time data from our customers, which is pivotal in automating and refining our decision-making processes.
This methodology is a significant leap from traditional lending practices, which predominantly rely on analyzing financial statements on a monthly or quarterly basis. By utilizing a more dynamic and data-driven approach, we can assess the financial health and creditworthiness of SMEs more effectively and responsively. This not only enhances our ability to make informed lending decisions but also significantly reduces the time frame for credit assessments, thereby improving our overall efficiency.
Furthermore, the use of real-time data enables us to keep pace with the rapidly changing dynamics of the SME sector. It allows us to offer more tailored financial products that are aligned with the current needs and capabilities of our clients. This agility and precision in our service offering are what truly make Flow48 stand out in the competitive landscape of SME financing.
Can you share insights into recent developments or initiatives at Flow48 that contribute to the platform’s growth? Are there specific areas or advancements you plan to focus on in the near future?
The most significant recent development at Flow48, which is set to significantly contribute to our platform’s growth is the successful closure of our latest funding round. The infusion of capital, especially on the debt side, provides us with substantial ‘dry powder’ to expand our portfolio in line with our strategic roadmap. In the immediate future, our primary focus will be on this portfolio growth.
This expansion encompasses several key areas. First, it involves generating a robust pipeline of deals. We’re dedicated to ensuring that we have a sufficient flow of potential lending opportunities to meet our growth objectives. Equally important is streamlining our process for managing this influx of data and underwriting these deals efficiently. Our goal is to avoid any bottlenecks that could impede our progress.
Another critical aspect is effectively utilizing the debt facilities we’ve secured, which are now fully in place to finance our expansion. The next 6 to 12 months at Flow48 will be intensely focused on leveraging these facilities to fuel our growth.
In summary, the recent funding round has positioned us ideally to scale up our operations. Our efforts will be concentrated on managing and expanding our deal pipeline, refining our processing capabilities, and strategically deploying our financial resources to propel Flow48’s growth and solidify our position in the SME financing landscape.
Congratulations on Flow48 raising a total of $25M in funding! How do you, as the COO, plan to utilize this funding to further the goals and vision of the platform?
We are incredibly thrilled about successfully closing this second price round, raising a total of $25 million in funding, a blend of $5 million in equity and $20 million in debt. This milestone is a testament to the confidence our investors have in Flow48’s potential and our robust business model.
Our approach strategically leverages debt facilities to fuel our operations, utilizing the bulk of this capital to expand our loan portfolio. This significant injection of debt capital empowers us to scale up our disbursements, directly translating into operational growth and an expanded reach to more SMEs in need of our services.
The equity component of this funding is pivotal for internal corporate advancements. We plan to channel these funds into key areas of development within Flow48. A significant portion will be dedicated to expanding our team, especially in the risk and technology departments. By strengthening these core areas, we aim to enhance our platform’s capabilities, making it more robust and responsive to the evolving needs of our clients.
Moreover, part of this equity will be strategically invested in forging and nurturing further partnerships within the ecosystem. These partnerships are crucial for our growth and in creating a more interconnected and efficient financial environment for SMEs.
In summary, as COO of Flow48, my focus will be on judiciously allocating this new capital to not just bolster our internal capabilities but also to significantly enhance our operational outreach. This funding marks a pivotal step in our journey towards revolutionizing SME financing, aligning perfectly with our long-term goals and vision.
As Flow48 grows, could you mention the importance of the cap table management system in dealing with relationships among founders, investors, shareholders, and others?
Cap table management is an essential aspect of Flow48’s growth strategy, serving as the backbone of our relationships with founders, investors, shareholders, and other key stakeholders. We believe that investors bring much more than capital to the table; their true value lies in their experience, network, and commitment to fostering positive relationships within the company.
We have witnessed instances where conflicting interests among board members or investors can create turbulence within a company. To avoid such scenarios, we have been meticulous in managing our cap table. We carefully select investors who are not only aligned with our vision but are also capable of contributing beyond financial means. Their expertise in our product area, their extensive networks for operational partnerships, market insights, and even connecting us with potential future investors are invaluable assets.
What advice do you have for founders in the B2B lending and SME financing space seeking funding from investors?
For founders in the B2B lending and SME financing space seeking funding from investors, my primary advice is to focus on building a high-quality portfolio that maintains its integrity even at scale. It’s essential to assure investors of your capability to create a portfolio with robust quality metrics. This involves having stringent processes in place – from thorough underwriting and diligent KYC procedures to effective systems for managing defaults and recovering non-performing loans.
Your pitch to investors should emphasize two critical aspects: the potential size of your portfolio (pipeline building perspective) and the security and reliability of the portfolio you intend to build. This largely depends on the sophistication of your risk engine and underwriting process. If you can demonstrate strength in these areas, you’re more likely to attract both equity and debt investors.
Flexibility is another key trait. The needs of your clients will vary greatly, so it’s important to offer a product that is adaptable in terms of tenors, costs, maturities, and cash flow structures. Being able to cater to a diverse client base is a significant advantage.
Resilience in discussions with investors is crucial. Different debt providers will have various geographical mandates and specific rates, so not every investor will be compatible with your business model. This doesn’t necessarily reflect the quality of your business; it just means they might not be the right investor for you.
For equity investors, the conversation revolves around the business’s potential and viability. In contrast, for debt investors, the focus is on the safety and reliability of your portfolio and whether your business meets their investment mandates. Understanding and addressing these differing perspectives is vital in securing the right investment for your business.