Can ContaAzul Bring Brazil’s Small Businesses into the 21st Century?

ContaAzul CEO Vinicius Roveda lets us in on what the B2B SaaS company is up to, how it's managing investments, and why its focus remains on Brazil.

ContaAzul is one of 2013’s breakout stars in Brazil’s startup scene. An online management solution for small businesses, the company picked up a hefty Series A investment in January and followed up with a Series B round in October. It receives 20,000 free trial requests and onboards around 2,000 paying customers each month.

So what’s the secret to its success? ContaAzul CEO Vinicius Roveda offered up his take on the situation in a recent interview with PulsoSocial:

We were the first company to start this kind of business in Brazil. We’re the number one software as a service B2B financial management and accounting solution. After we started, a lot of other startups tried to do what we do, and here in Brazil, we have big companies working with enterprise. But for  small and medium-sized businesses, we don’t have a big company.

Another factor that’s contributed to the triumph of ContaAzul’s solution is design. The company has focused on building an extremely simple, user-friendly product for businesses that is accessible to all individuals, businesses and workers. And customer service has been a differentiator, too. In fact, that team visited Zappos last year to pick up tricks of the trade.

contaazul“This is the first software that provides a good experience, a soft experience, when people start to use it. It’s a good solution that doesn’t require training; clients learn to use it by themselves,” Roveda explained. “People trust ContaAzul, and a lot happens by word of mouth.”

That being said, ContaAzul faces an uphill battle in getting businesses to understand the value of its offer. Just 10% of those who sign up for the 50-day free trial become paying customers (something Roveda pointed out is “natural behavior” for this type of business model), and many small businesses simply don’t have the discipline necessary to implement such a controlled management system. Only 14% of Brazil’s small businesses use financial management software, meaning the other 86% are using pen and paper. “We need to teach them that controlling financials is important and that we can help them to make their businesses more competitive. This is our main challenge,” he reflected.

And ContaAzul has the forces necessary to address that challenge, with backers like Ribbit Capital, Monashees Capital, Napkn Ventures and Valar Ventures in the mix, not to mention the time spent at 500 Startups. In fact, it was after ContaAzul’s stint at the accelerator that it started to gain momentum and figure out how to grow.

Roveda explained that much of ContaAzul’s time at 500 Startups was spent trying out different channels of distribution and figuring out how to scale. The Series A round at the start of 2013 was geared towards that, and the capital from the second round is more focused on achieving volume in customers and trials and on accelerating growth. As to whether ContaAzul will be going after a Series C round, Roveda said it’s not at the top of his immediate to-do list:

We don’t need money, and our business is doing well. Now is an opportunity to grow faster, increase the team, and find new distribution channels. We’re living a very good moment here in Brazil. . . . Our focus now is to create a great company and provide a great service.

The potential for expansion to other markets isn’t a main point of concentration for ContaAzul right now, either. The company is focused on the opportunity at hand in Brazil, which will likely have 10 million small businesses by 2015. “We have a big job to do here,” Roveda affirmed. “We understand that there are opportunities in the U.S. and other countries, but today, that’s not our focus.”