Plerk and minu: why I invested in Plerk and what happened with the merger

What Plerk is

Plerk is a startup from Guadalajara that builds an employee benefits platform: companies use it to offer and manage benefits for their people. It got into Y Combinator in the Summer 2020 batch (S20).

It's one of the 32 startups I've invested in since 2016, and one of the 24 that came out of Y Combinator.

How I found it

Nobody introduced me. I found it by looking through Y Combinator.

When a batch starts, I check which companies got in, especially the ones from Latin America. Plerk was Mexican and it was in YC, and that's when I invested: right when they got in.

Why I invested

Two reasons.

First, I liked the problem they were solving. Employee benefits in Mexico were, and at a lot of companies still are, something handled manually that employees barely use.

Second, I wanted to help Latin American founders. I applied to Y Combinator with SpeakOn, my first startup, and got rejected after the first interview. I know how hard it is to get there from Mexico. When a Mexican team gets in, I want to be one of the people saying yes to them.

What happened: the merger with minu

In February 2023, Plerk announced it was joining minu, another Mexican startup. minu gives employees access to wages they've already earned when they need them, before payday. Both sell to companies and both take care of employees, so putting them together made sense.

For me as an investor, the merger meant one concrete thing: my Plerk shares were swapped for minu shares. There was no cash payout.

An exit that isn't cash

When people hear "exit," they think of a check. In early-stage investing, that's often not how it works.

When a startup buys or merges with another, it's common for it to pay with its own shares. For the investor, that means the money stays invested, just in a different company. If minu does well, I do well. If not, those shares are worth whatever minu is worth.

In my portfolio, Plerk counts as an exit because the company I invested in no longer stands on its own: it became part of another one. But I haven't received any money from that investment.

Where my portfolio stands today

Of the 32 startups:

• 17 are still active.
• 14 shut down.
• 1 had an exit: Plerk, paid in minu shares.

Plerk is the only exit so far, but it's not the only one doing well. Several of the active ones are doing really well, like Writesonic, Tovala, Cero, Filadd and Fitia.

I wrote more about what the ones that shut down taught me in 32 startup investments: what the 14 that shut down taught me.

FAQ

What is Plerk? A Mexican startup from Guadalajara that builds an employee benefits platform. It got into Y Combinator in 2020 (S20).

Who bought Plerk? minu, a Mexican earned wage access startup. The merger was announced in February 2023.

Did Carlos Gotlib invest in Plerk? Yes. I invested when Plerk got into Y Combinator. So far, it's the only exit out of my 32 investments.

Did Plerk's investors get cash? In my case, no. I got minu shares in exchange for my Plerk shares.