Marco Financial raises $82M in debt, equity seed round to support small Latin American exporters – ClearTips

Small and medium-sized businesses in Latin America may find it difficult to obtain the funds they need to export their goods to the United States. This is a gap Marco Financial is looking to bridge through its tech-enabled risk assessment platform that can provide better insights on when to get a loan.

To continue its mission, the Miami-based trade finance company raised $7 million in seed funding and $75 million in credit facilities, led by Arcadia Funds LLC and Kayak Ventures, to increase its line of credit to $100 million. . Marco was backed last September by a small seed round from Struck Capital and Antler and more than $20 million in a credit facility written by Arcadia Funds.

Additional investors in the latest seed round and expanded credit facility include Village Global VC, Flexport Ventures, Tresalia Capital, 342 Capital, Struck Capital, Antler LLC, Antler Elevate, Florida Funders and Fox Ventures. Strategic angel investors include Mitty CEO Phil Bentley and Tripstack and FlightNetworks co-founder and CEO Naman Buddhadev.

Not only is there a nearly $350 billion trade finance market, says Jacob Shoheit, co-founder and CEO of Marco, but citing data obtained from Javier Urrutia, director of foreign investment at PROCOLOMBIA, an organization that specializes in foreign investment and Promotes non-traditional exports. In Colombia, for every 1% increase in export productivity, 500,000 new jobs can be created.

“It is important for small and medium businesses in business, for companies to have high levels of job growth and reduce poverty rates,” Shoheit told ClearTips. “By making it easier for businesses to cross 30, 60, 90 and still 120 days as they wait to be paid for supplies, we can solve that gap and unlock billions of value so companies can scale “

Shoheit, along with his co-founder and COO Peter D. Spreadling through Antler Accelerator, a Singapore- and New York-based early-stage investment and advisory services program that connects entrepreneurs and tech operators to launch new businesses. He started Marco in 2019 and now has offices in New York, Dallas, and across Latin America.

Spradling was born in Uruguay and learned firsthand the challenges of import and export from working in his family’s slaughterhouse and later founding three of his own companies. In fact, one of his businesses was importing e-cigarettes—his mother was a lifelong smoker, and he wanted to help her quit. He is reminded to sell his inventory at a discount in order to obtain money to import the goods.

“Banks don’t like risk, which means businesses spend most of their time getting financing rather than increasing sales,” Spreedling told ClearTips. “Banks in Latin America have a saying that ‘they lend money to people who don’t need it.’ Families with money can access banks, but you can’t start a business without capital, and many owners don’t have access to banks.”

Marco’s factoring product enables new companies to start without a significant amount of collateral being sought by banks. Banks usually look at the financial statements of the last two years of the business and grant loans accordingly. Not requiring more collateral, said Sparadling, enables more women in Latin America to become business owners because they often do not have collateral.

In contrast, Marco mitigates risk by basing its line of credit on an analysis of the business’s future prospects, thereby freeing up cash so that small and medium exporters can continue their operations and invest in their growth. The company is able to show what type of financing can be obtained based on the amount of data that customers provide. Marco also said that it can reduce the loan origination process from two months to a week and make funds available to approved exporters within 24 hours.

Cristóbal Silva Lombardi, General Partner at Kayak Ventures, told ClearTips that Marco is providing small and medium exporters with an option to access capital that they previously had to receive from friends and family.

In countries such as Chile, electronic invoicing innovation has enabled the factoring industry to thrive, and in turn, companies such as Marco become leaders in supply chain financing and reduce the high interest rates spread between small businesses and large firms. Gives.

“Marco wants to take it around the world,” said Silva Lombardi. “There is a lot of value to be dealt with. Factoring is one of those corners in the financial market that hasn’t been settled, and by using technology, Marco is creating and creating value for society as a whole. This is where Venture capital firms should be putting their dollars — in companies where technology and talent bring a lot of value.”

Since launching its product in January 2020, the company has processed thousands of invoices in 20 countries, amounting to over $18 million.

However, according to Shoet, it was not easy in the beginning. During the global pandemic, Marco initially faced challenges in accessing the market as exports and supply chains were strained.

Today, Marco has found its groove and is lending as little as $25,000 per month and as much as $10 million, Shoheit said.

Thus, the new funding will go towards producing unstructured data, processes and working practices to simplify cross-border payments, assess risk and create a better experience for the customer. The company also said that it aims to give large logistics providers the ability to finance exports on their own.

Marco was also able to attract new leadership, including Chief Product Officer Prajwal Manalwar and Chief Development Officer Sabrina Teichman. Manalwar worked for 13 years at PayPal, where he was most recently product lead focused on debit card authorization rates and in-store payments. Teichman joined the US government after 11 years, most recently serving as managing director of US International Development Finance Corp.

“We can now work on how to solve the problem at scale through the underwriting process by building infrastructure and information and through partnerships with big players in shipping, trade services and insurance – all existing industries that have functional There are customers with the capital,” Shohet said. “By innovating the underwriting process, we can come to better conclusions and become a trade finance-as-a-service provider for clients in emerging markets.”

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