Increased internet connectivity and usage have led to rapid growth in Mexico’s e-commerce sales; global tensions have increased the United States’ reshoring efforts in the region; and major highway projects have resulted in a Mexican road freight market valued at $82 billion with a forecast compound annual growth rate of 9.91% through 2027.
But Latin American trucking companies and freight brokers “have been incredibly ignored by the financing sector,” according to Jaime Tabachnik, CEO of transportation fintech platform Solvento.
“There is a general belief that truckers are not creditworthy,” Tabachnik told FreightWaves. “Brokers have similar problems. They are asset-free companies that, early on, have a lot of trouble finding credit.”
Related article: Solvento raises $4.5M to solve Mexico’s trucking industry problems
Solvento’s platform provides solutions for automating the payment process and financing invoices to keep them cash-flow positive as they scale their businesses.
Since founding in 2021, the company has provided over $13 million in cumulative loans to more than 4,000 Latin American trucking companies.
To keep up with demand and product development needs, Solvento announced Wednesday it has raised $5 million in a seed round led by Ironspring Ventures with participation from Quona Capital, Proeza Ventures, Dynamo Ventures, Zenda Capital, Susa Ventures, 9Yards Capital and Supply Chain Collective.
“Bolstered by the Mexico transportation tailwinds of reshoring, e-commerce growth, and regulatory disclosure mandates, the Solvento team has executed extremely well as a first mover FinTech logistics solution with a rapidly expanding loan book and over 15,000 freight invoices financed in less than a year. And as an Austin, Texas-based VC fund focused on supply chain, we’ve watched closely how accelerated cross-border trade between the US and Mexico will only further Solvento’s mission,” said Ty Findley, general partner at Ironspring Ventures, who will also join the company’s board of directors as part of the deal, in Wednesday’s announcement.
In this round, Solvento also grabbed the attention of a number of angel investors, including Alexis Patjane, founder and chief executive officer of last-mile provider 99 Minutos, and Felipe Capella, co-founder and chief executive officer of logistics technology platform Loadsmart.
“Solvento is doing two things that I’m very excited about,” Capella told FreightWaves. “They are leveling the financial playing field for smaller Latin American trucking companies by providing cheaper and easier access to working capital, and for 3PLs and [carriers], they are automating the clunky and analog back-office workflows for payments. That’s why I’m glad to be both an investor and a board adviser to Solvento.”
|Funding amount||$5 million|
|Funding round||Seed round|
|Lead investor||Ironspring Ventures|
|Secondary investors||Quona Capital, Proeza Ventures, Dynamo Ventures, Zenda Capital, Susa Ventures, 9Yards Capital, Supply Chain Collective, Alexis Patjane and Felipe Capella|
|Business goals for the round||Expand its product and engineering teams|
|Total funding||$9.5 million|
Tackling these international challenges has also placed the company on FreightWaves’ FreightTech 100 list and in the running to make the FreightTech 25, announced in early November at FreightWaves’ Future of Freight Festival in Chattanooga, Tennessee.
With its new capital, Solvento looks to hire new talent for engineering and product development to build out its suite of financial solutions, focusing on strengthening its data and risk models “to build a more powerful underwriting model leveraging its proprietary, industry-specific data,” according to Tabachnik.
“We couldn’t be prouder of being able to assemble such an incredible syndicate of investors in a very hard macroeconomic venture capital landscape. We are sure that we will transform and redefine trucking payments in Latin America. We have a very strong passion to change the lives of the hardworking and usually forgotten people that are one of the most essential pieces of our economy,” Tabachnik said.