INSIGHTS
Nearshoring: Fintech Disruption in Latin American Logistics
Guest post by Jaime Tabachnik, founder and CEO of Solvento
Tailwinds driving transformation and innovation are blowing strong in Latin American logistics. As businesses relocate their activities to or near their countries of origin, on-the-road freight is taking center stage in Mexico — and the role of fintech in reshaping the logistics industry cannot be overstated.
The diverse geography and dynamic economic shift in Latin America pose both challenges and opportunities for the logistics sector. Traditional operative models are under scrutiny: technological adoption has emerged as a necessity rather than a choice. Access to capital is of critical importance in driving growth, especially in emerging economies. Fintech-first solutions are strategically positioned to meet these demands, offering much needed financial services seamlessly integrated alongside tech adoption to thrive in the reshored landscape. Fintech solutions will democratize access to resources, enabling businesses to invest in their fleet, adopt cutting-edge technology, and expand their operations to meet the growing demand during the reshoring wave.
Take, for example, Transportes EASO, one of the oldest and most emblematic trucking companies in Mexico. The firm recently built an intermodal logistics division to differentiate itself from other incumbents. To have an efficient operation in Mexico, containers must be moved short distances with trucks to long-haul transportation nodes (like cargo trains). EASO used Solvento’s infrastructure to attract truck owners and operators by offering them what they need most: immediate payouts. This simple yet powerful value-add made EASO the favorite business to work with for many independent truckers. As a result, their intermodal business has grown exponentially over the past year.
The value proposition and need of easy-to-access credit in this market is clear, yet solutions are complex to engineer. The industry will need to underwrite an entire previously unserved population, and mitigate risk and enhance security across the logistics hauls along the way. Beyond credit, fintech tools can incorporate and share advanced risk assessment algorithms, providing businesses with crucial insights to proactively address potential challenges. Whether it’s monitoring and controlling spending, predicting cash flow needs, or mitigating financial risk, these fintech platforms are designed to safeguard the interest of logistic companies operating in the challenging and dynamic environment of Latin American logistics.
As the world navigates the exciting journey ahead amidst the nearshoring and reshoring realities, it’s clear that the intersection of fintech and logistics will play a critical role in defining the future of on-the-road freight in Latin America. This transformative period presents an unprecedented opportunity for disruption in fintech and other technologies. It is undeniable that the future of logistics in Latin America will be intertwined with collaboration between financial institutions, logistic companies, and technological providers. Embracing innovation is the key to unlocking the full potential of nearshoring.
Solvento, the fintech company that develops payment and credit infrastructure for Latin America’s trucking sector, announced this month that it has closed a $50M debt facility from Lendable and raised an oversubscribed equity round led by Quona Capital, with participation from Dynamo Ventures, Ironspring Ventures, Proeza Ventures, and Zenda VC. The news comes with the launch of Solvento Audita, an AI-powered software automating the end-to-end accounts payable process for the on-the-road freight industry.
Solvento is building the payment and credit infrastructure for the LatAm trucking sector, benefiting all parties along the supply chain. Solvento automates payments, finances invoices, and solves the liquidity needs of carriers, allowing them to focus on their operations and growth. The new lending facility enables shippers and brokers to offer quick pay, and injects working capital into the supply chain for the benefit of carriers and truckers alike. As a result, it will help carriers pay their drivers faster, addressing the concerning deficit in driver capacity.
Disclaimer: Quona portfolio companies were selected for profiles based on objective, non-performance-based criteria for the purpose of illustrating the types of investments made by Quona funds and their impacts. These profiles are being provided for illustrative purposes only, in order to provide examples of the idea generation, research, and thought process of Quona investment teams. No representation is made as to whether or if the investment ideas represented in these profiles have been or will be profitable. It should not be assumed that Quona will be able to identify similar investment opportunities in the future, or that any such opportunities will be profitable. The above statements include the opinions of the Firm and are for illustrative purposes only. There is no assurance that any trends depicted or objectives described in Quona profiles will continue or become successful.
