Other participants included Wollef Ventures and Zenda Capital, along with a $3 million debt facility from Marco Financial.
Jaime Tabachnik, co-founder and CEO of Solvento, said the funds will be used to hire more employees as well as provide capital for the loans it gives out to Mexican trucking companies.
“A year from now we want to grow our outstanding portfolio, onboarding more customers,” Tabachnik told FreightWaves. “We’re working with 27 customers right now. We’re hoping to get to over 250 customers in a year.”
Solvento was founded in 2021 by Tabachnik and brothers Guillermo and Pedro Bosch. The company is a financial technology platform aiming to alleviate a capital crunch felt by small and midsized trucking companies across Mexico.
“The trucking industry in Mexico is really fragmented, we have over 200,000 trucking companies in Mexico and over 95% of them have less than 30 trucks,” Tabachnik said. “The problem is that these companies don’t have access to financing, not even credit cards. So they’re living day to day paying in advance for gas, payrolls and other operational expenses.”
Mexico’s trucking industry generates revenue of about $60 billion annually, according to a 2016 report titled “Trucking in Mexico: Navigating the Opportunity” by Wisconsin-based Armstrong & Associates.
Tabachnik said generating revenue is extremely competitive and challenging for small and mid-sized carriers in the Mexican trucking industry. Additionally, it’s common practice for shippers to not pay truckers for up to 60 days on average after the goods have been delivered.
“So that’s killing them and that’s also keeping them from growing,” Tabachnik said.
Solvento works by extending credit lines to trucking companies, allowing them to collect invoices when goods are delivered. Solvento integrates its platform into existing logistics management systems used by carriers and shippers. When a carrier invoices the shipper upon delivery, Solvento underwrites the invoice and advances the payment on the shipper’s behalf.
Watch: Craig Fuller, FreightWaves founder and CEO, discusses venture capital and Mexico cross-border trade with Forager’s Matt Silver.
Solvento’s platform will also help carriers automatically navigate government compliance, such as the Carte Porte supplement that goes into full effect Jan. 1. The Mexican government is implementing a new customs requirement that each shipping invoice be authorized by the Mexican Tax Administration Service prior to services beginning.
The new requirements include disclosing everything about the shipment, including type of merchandise, who owns it, insurance, origin, destination and bill of lading. Solvento will work with carriers and shippers to complete the Carte Porte supplement process electronically on its platform.
“We partnered with an electric electronic invoicing company and we’re giving the service for free, as a premium to truckers,” Tabachnik said. “Our solution for truckers will generate their invoice and their Carte Porte supplement for free, including the stamp that usually truckers need to pay for each of these stamps, like 20 cents of $1. But we’re giving it for free starting in January.”
Over the next year, Solvento will also be working on raising its Series A funding round to keep expanding its services to more markets.
“We have a very clear expansion strategy, in Latin and Central America and up to the U.S., for Spanish-speaking trucking companies,” Tabachnik said.
More articles by Noi Mahoney