Spurred by e-commerce problems amid the pandemic such as delayed delivery, and credit cards incorrect charges, ZTZ Tech Group, a SaaS company that provides an artificial intelligence-based solution for enterprises to deal with customer complaints, has been scaling up. The COVID-19 pandemic sure helped, but the main driver for the Chilean startup’s swift growth (in February this year, the company reached revenues that surpassed the entire 2020’s, but it doesn’t disclose numbers) was catching big fishes such as Mercado Libre, Uber, and the insurance firm HDI.
In 2020, Latin American startups raised over $4 billion in venture capital across 488 deals, according to LAVCA’s data. These deals targeted mainly Brazil, the region’s largest and more mature market. Yet, since 2013, Chile has been attracting investors’ eyes.
Backed by Chile‘s government entity Corfo, the accelerator initiative Start-Up Chile boosts tech companies as a competitive “catapult to the world,” as described by Nicolás Vilela, CEO and co-founder at ZTZ Tech Group.
Argentine from birth, Vilela saw in this Chilean ecosystem an opportunity to do new businesses. Alongside Ignacio Raffa, he founded ZTZ Tech Group in mid-2016, and the following year, he joined Start-Up Chile‘s program, with his startup being able to reach equity funds without the need to sell equity stakes. The program connected him with UDD Ventures fund, from Chile‘s Universidad del Desarollo. His startup also managed to raise funds from a NY-based angel investor. Now, Vilela is a Start-Up Chile‘s mentor.
After four years of operation, the tables turned rapidly for ZTZ. Chile‘s companies had 300,000 complaints in 2019, and that number reached 1 million in 2020, according to Vilela. In Chile, the regulatory entity Sernarc (Spanish acronym for National Customer Service) that protects consumers from companies’ bad behaviors determines that, for any complaint file, the company has to answer in 10 days.
“Normally a retailer used to get 1,000 complaints per month, now [with the pandemic] they get around 5,000 per month. And all this while working from home; having to answer in 10 days. It’s crazy,” explains Vilela.
That’s where ZTZ software gets in. It analyzes the complaint and answers it automatically within seconds. Under MeLi, Uber, and HDI’s wing, the startup answered more than 200,000 complaints and made expansion plans to other Latin American countries possible.
As MeLi operates all over the region, it brought together ZTZ to fix its customer services problems. Today the startup has vendors in Chile, Argentina, and Colombia, and has been in talks with funds to raise a new $700,000 round to launch in Brazil and Uruguay by this year. The idea, according to Vilela, is to have startups’ founders on the board, people that could bring wisdom.
“We are aiming to launch a website in Portuguese as soon as possible. Right now, we have 500 users creating complaint answers every day. In the B2B world, getting 500 paid users is a lot,” says Vilela. “The hardest part is to start selling to one company. Once they trust us, they want to work more with us. That was our leverage.”
Serving big techs, ZTZ is still small in terms of team. It now has 15 employees (working remotely in Chile), but it aims to get to 40 people by the end of the year as it grows and fundraises.
“Besides the AI, we have this disruptive business model. We charge per document, per complaint. We don’t charge for consultancy or customization,” he says. According to him, this was an ace upon the company’s sleeve for catching those big business fishes amid a competitive market with big tech rivals providing AI solutions.
“To be fast, with affordable prices, and low risk. If you have this three-point formula in any country in Latin America, they will say yes to you. I’m looking forward to this concept of affordable AI because we are competing with big tech companies. When I say I can deliver the same service in three weeks (after contract) with 20% of the price of any kind of consultancy company, and you can do business with me in other countries with the same budget that you do in one, that’s the way to internationalize a startup.”
ZTZ offers three service plans: Basic, which costs $497 per month for 90 complaints; Pro, which costs $997 per month and encompasses 200 complaints; and Custom, which costs $1,995 per month for 500 complaints.
“We can add value to these big techs. You have a lot of technology in English, but you don’t have AI for Spanish and Portuguese [at affordable prices, according to Vilela]. At the end of the day, the AI team in San Francisco won’t develop an AI in Spanish. So we are rocking in Latin America.”