Higo Raises $23M to Revolutionize B2B Payments in Mexico

Higo Secures $23 Million Series A Funding to Revolutionize B2B Payments in Latin America

Mexico City-based Higo has recently announced a successful $23 million Series A funding round, led by Accel, just six months after securing $3.3 million in seed funding.

Tiger Global Management participated in this financing, alongside existing investors including Haystack, Homebrew, Audacious, Susa Ventures, and J Ventures. Furthermore, several angel investors contributed, notably Stripe COO Claire Hughes-Johnson and Cristina Cordova, formerly of Stripe’s partnerships division.

Transforming B2B Payments for SMBs

Higo is dedicated to modernizing B2B payment processes for small and medium-sized businesses (SMBs) throughout Latin America, beginning with Mexico.

Founded in January 2020 by Rodolfo Corcuera, Juan José Fernández, and Daniel Tamayo, the company was established to address the inefficiencies inherent in how businesses manage vendor payments. The founders identified a landscape characterized by “manual and cumbersome” procedures.

According to CEO Corcuera, Mexican small businesses typically rely on basic tools like spreadsheets, email, and outdated bank accounts for their payables.

Addressing the Informal Economy

Higo was created to streamline these processes and offer enhanced visibility into cash flow, specifically for smaller enterprises. Approximately 23% of Mexico’s GDP is generated by “informal” businesses, as reported by INEGI, the National Institute of Statistics and Geography.

The company launched its SaaS platform in November of last year, aiming to create “the simplest way for businesses in Latin America to pay, collect and finance invoices.”

Rapid Growth and New Financing Options

Higo reports experiencing growth exceeding 20x, now serving thousands of companies that utilize its platform for both payments and receivables, a significant increase from the initial handful of users in early 2021.

Since its last funding round, the company has also introduced a financing product designed to improve company liquidity by extending accounts payable (AP).

“We provide on-demand financing in case payments are late, making cash flow concerns a thing of the past,” Corcuera explained.

A Venmo for Businesses

Corcuera, who previously founded two other Mexican startups – Aliada and Tandem – draws a comparison between Higo’s business model and that of Venmo, but tailored for business-to-business transactions.

“Higo is the first B2B payments platform that automatically populates all invoices from a customer’s vendors – and provides a single ledger where users can approve, pay and finance these invoices without ever leaving our platform,” he stated. “Consider us a B2B equivalent of Venmo, with the added capability to fully finance payments, both incoming and outgoing, with a single click.”

Expansion and Future Plans

Higo started 2021 with a team of five and has since expanded to 31 employees, with plans to reach 60 by the end of the year. The new capital will be primarily allocated to hiring across all departments.

“In Mexico, companies don’t get paid on time,” Corcuera noted. “Even large companies struggle to meet deadlines, so we are helping companies get paid faster.” The company’s client base includes major players like logistics provider 99minutos.com and e-commerce giant Jokr, alongside smaller businesses such as vinoschidos.mx, an online wine retailer.

Focus on the Mexican Market

Currently, Higo is focused on the Mexican market, where Corcuera estimates there are 4.2 million SMBs, representing 70% of the national workforce.

Accel’s Investment Rationale

Accel’s Amit Kumar highlighted the firm’s active investment strategy in Latin America, emphasizing that Higo represents its largest Series A investment in the region.

Kumar stated that Accel increasingly recognizes the substantial potential within Latin America “to build the next generation of fintech rails.”

He further explained that Accel was impressed by Higo’s “laser focus” on B2B payments and its capacity to stimulate the local SMB ecosystem, as well as the team’s potential to become “one of the best early-stage teams” globally.

Kumar believes that Higo’s emphasis on invoices is particularly well-suited to the Latin American market, given the prevalence of inter-company commerce conducted through invoices.

“The growth velocity in terms of deposits, transactions and vendors onboarded all indicate they’ve solved a really important problem for a large swath of businesses and will accelerate this entire ecosystem,” he concluded.