The Rise of Digital B2B Payments and Higo.io's Solution

The B2B payments landscape has experienced significant growth recently, and the onset of the COVID-19 pandemic has accelerated the adoption of digital financial solutions.

In areas such as Latin America, the necessity for innovation within this sector is particularly crucial, especially considering the prevalence of outdated processes still utilized by many.

Higo.io: Transforming B2B Payments for Latin American SMBs

Higo.io, a Mexico City-based startup, is dedicated to revolutionizing B2B payments for small and medium-sized businesses (SMBs) throughout Latin America, beginning with its domestic market.

Founded in January 2020 by Rodolfo Corcuera, Juan José Fernández, and Daniel Tamayo, the company was established on the observation that vendor payments for business owners are often a “manual and cumbersome” undertaking.

CEO Corcuera explained that in Mexico, many small businesses manage their payables using only spreadsheets, email, and traditional bank accounts.

Higo was created to automate 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 Software-as-a-Service (SaaS) platform in November of the previous year.

Recent Funding and Expansion Plans

Higo has successfully secured $3.3 million in funding from a consortium of U.S.-based investors, including Homebrew, who spearheaded the investment round, alongside Susa Ventures, Haystack, and J Ventures.

This financing represents the latest in a series of fintech-related investments in Mexico that have been reported by TechCrunch.

Higo aims to disrupt the existing payments ecosystem in the region by providing a viable alternative to conventional banking for inter-business transactions.

“Our vision is to develop the Venmo equivalent for B2B payments within Latin America,” Corcuera stated to TechCrunch.

The ultimate objective is to empower SMB owners to focus less on administrative burdens and more on generating revenue and profitability for their businesses.

Currently, Higo serves hundreds of small business owners and intends to expand its customer base to “thousands” by the end of the year.

Addressing Unique Challenges in the Mexican Market

Corcuera highlighted a key difference between the U.S. and Mexico, noting that in the States, a PDF invoice is often sufficient, while in Mexico, electronic invoicing is legally required for tax deduction purposes.

“Our platform automatically populates invoices, providing businesses with a clear understanding of their outstanding payments, vendors, and due dates,” Corcuera explained to TechCrunch.

Corcuera brings prior entrepreneurial experience, having launched a housecleaning marketplace at age 23 in 2013 and subsequently founding Tandem, an office management platform, in 2018.

It was through the growth of Tandem that he identified the difficulties and time consumption associated with managing payables and receivables, inspiring the creation of Higo.io.

A key member of the Higo team, Gallardo, previously served as COO at Swap, a Mexican challenger bank, and was also a founding member of Uber’s operations in Mexico.

Future Growth and Investment Strategy

Higo intends to allocate its new capital, in part, to expand its team of six, with a particular emphasis on bolstering its engineering capabilities to facilitate rapid scaling, according to Corcuera.

Initially, the company’s focus remains solely on the Mexican market, which presents a substantial opportunity in itself.

“We plan to extend our reach throughout Latin America in the future, recognizing clear opportunities in comparable markets across the region,” Corcuera added.

Investor Perspective

Satya Patel, Partner at Homebrew, expressed his firm’s belief in the significant potential within Latin America, driven by the increasing shift towards digital payments.

The investment in Higo represents Homebrew’s third venture in the region over the past 18 months.

“This is an exceptional team addressing a critical pain point for businesses in Mexico,” Patel told TechCrunch. “They empower businesses with real-time insights into their cash flow and working capital, mitigating risk and addressing an acute need.”

Patel also noted that the region’s payments infrastructure is still in its early stages of development.

“By serving as an intermediary for B2B tax information, Higo has the potential to offer a genuine alternative to traditional banking practices in Mexico,” Patel concluded.

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