Lean Staffing Solutions (LSS), a staffing firm offering nearshored solutions in Colombia focused on transportation and logistics, announced Tuesday that it had raised a $42.5 million growth equity minority investment from FTV Capital.
“Colombia is the fourth-largest business process outsourcing (BPO) market in Latin America with a $2.3 billion market size and an annual growth rate of 19% over the last seven years,” said Brad Bernstein, managing partner of FTV Capital, in a statement. “With its outstanding management team, vertical expertise and operational excellence anchored in a customer-centric approach, LSS is well positioned to continue to lead in this market. A profitable, high-growth and founder-owned business, LSS is highly representative of the innovative companies which FTV Capital seeks to partner. We look forward to bringing the best of our 22 years’ domain expertise in logistics, BPO and emerging markets to help accelerate the company’s enormous potential.”
Lean Staffing counts many of the largest private and public transportation companies in the United States among its clients. Lean began in 2016 by helping logistics companies fill back-office roles like carrier compliance, payments processing and track and trace, but then expanded its offerings to include sales, marketing and technology.
Today, Lean provides U.S. transportation and logistics companies with employees ranging from fleet dispatchers to graphic designers, carrier operations representations to full-stack software developers. Lean operates in four cities in Colombia with a total of 1,600 employees who work in branded offices exclusively dedicated to their specific client companies.
FTV Capital has a sector-specific focus in enterprise technology and services, financial services and payments and transaction processing. FTV successfully exited its investment in Fleet One, a fuel card and payments company for trucking carriers, in 2021 when Fleet One was acquired by Wright Express.
“Over the last two to three years, we kept coming across Lean Staffing,” said Brent Fierro, vice president at FTV. “Their customers kept referring us to them as we were looking for a way to play this massive, fragmented logistics market. We’ve already had success in the [business process outsourcing] industry and we thought we could help LSS continue to grow their outsourcing expertise. As we believe and have come to realize, they’re the innovator in the space and there’s not a lot of competition. Lean’s growth speaks for itself — they’re one of the best brands in the space and one of the fastest growing that we’ve ever seen.”
Lean and FTV made contact at FreightWaves LIVE Chicago in November 2019 and continued discussions about a potential deal after the event, said Roberto Cadena, founder and chief executive officer at Lean.
“We’ve always looked for fast growth and now we are taking it to the next level,” Cadena said.
“We’ve been doing very well and gotten to a point where the decision is where do you go from here. We were looking for a partner that could help us get there.”
Cadena said that FTV’s experience in the BPO space and its track record of successfully taking companies public or to acquisitions made a difference as Lean and FTV explored an investment.
“Our initiative is growth and expansion and FTV is the perfect partner to do that,” Cadena said.
Lean’s interest in expanding beyond its focus on transportation and logistics clients came from inbound interest. Cadena said that Lean has already onboarded a flooring company and a factoring business.
“Interestingly enough, we heard about LSS not just through some of the largest brokers and carriers in the industry, but also from some factoring businesses and insurance businesses that outsource to LSS,” Fierro said. “With our background and expertise in financial services, we thought we could be particularly helpful in expanding into other subverticals that are tangential. We don’t necessarily want to force the issue to get too far outside transportation and logistics because of Robert and his management team’s expertise, but it will be interesting to see how the model can pivot to tangential customers.”
Cadena said that Lean would use the capital to both add some new services that weren’t on the road map before and to accelerate its existing plans. Lean Consulting is next, Cadena said. He wants to build or buy a sophisticated team of consultants who can manage the whole build-out of Lean’s engagement with a client, comprehensively covering sales, marketing, staffing and technology.
Lean Tech has also grown quickly. Last month, FreightWaves covered freight brokerage Edge Logistics’ launch of its CAPACITY platform on mobile; Lean Tech developed the app. Cadena said that some of the new capital will be invested into new technology tools for Lean’s internal use.
“We’re going to keep up the momentum and growth,” Cadena said. “We have over 200 new employees for the month of October already in agreement. The future looks bright and I’m excited to start the process with FTV.”