Marco Financial Secures $82M Seed Round for Latin American Exporters

Facilitating Trade Finance for Latin American Businesses

Small and medium-sized enterprises (SMEs) throughout Latin America frequently encounter obstacles when seeking capital to facilitate the export of their products to the United States. Marco Financial is addressing this challenge with a technologically advanced risk assessment platform designed to improve loan allocation decisions.

Recent Funding and Expansion

The Miami-based trade finance firm has secured $7 million in seed funding, alongside a $75 million credit facility, spearheaded by Arcadia Funds LLC and Kayyak Ventures. This infusion of capital increases Marco’s total credit line to $100 million.

Previously, Marco received a smaller seed investment from Struck Capital and Antler, and over $20 million in credit from Arcadia Funds last September.

Investor Details

The latest funding round and credit facility expansion also include contributions from Village Global VC, Flexport Ventures, Tresalia Capital, 342 Capital, Struck Capital, Antler LLC, Antler Elevate, Florida Funders, Fox Ventures, and Arpegio – Venture Capital.

Furthermore, strategic angel investors such as Phil Bentley, CEO of Mitie, and Naman Budhdeo, co-founder and CEO of TripStack and FlightNetwork, have participated.

Market Opportunity and Impact

Jacob Shoihet, co-founder and CEO of Marco, highlights a $350 billion trade finance market. He also referenced data from Javier Urrutia, director of Foreign Investments at PROCOLOMBIA, indicating that a 1% increase in export productivity can generate 500,000 new employment opportunities.

“For SMEs engaged in international trade, this is crucial for fostering substantial job creation and reducing poverty levels,” Shoihet explained. “By streamlining access to funds and shortening payment cycles – currently ranging from 30 to 120 days – we aim to unlock significant value and enable companies to expand their operations.”

Company Origins and Growth

Shoihet and COO Peter D. Spradling connected through Antler’s venture capital and advisory program, which pairs entrepreneurs with experienced tech professionals. Marco was founded in 2019 and now maintains offices in New York, Dallas, and throughout Latin America.

Spradling, originally from Uruguay, brings firsthand experience of the difficulties inherent in import and export, gained through his family’s meatpacking business and the launch of three prior ventures. He recounted pre-selling inventory at a discount to secure import financing.

Addressing Banking Challenges

“Banks are generally risk-averse, causing businesses to dedicate considerable effort to securing financing instead of focusing on sales growth,” Spradling stated. “Latin American banks often prioritize lending to those who already possess financial resources.”

He added that families with existing wealth have easier access to banking services, but launching a business requires capital, which many entrepreneurs lack.

Marco’s Factoring Solution

Marco’s factoring product allows new businesses to begin operations without the substantial collateral typically demanded by banks. Traditional banks usually assess a business’s financial history over the past two years to determine credit line eligibility.

By reducing collateral requirements, Marco also empowers more women in Latin America to become entrepreneurs, as they often lack traditional assets.

Risk Assessment and Efficiency

Instead of relying solely on historical financial data, Marco evaluates a business’s future potential, freeing up capital for exporters to sustain operations and invest in growth. The company can determine potential financing options based on the data provided by customers.

Marco claims to reduce the loan origination timeframe from over two months to just one week, with funding available to approved exporters within 24 hours.

Industry Perspective

Cristóbal Silva Lombardi, general partner at Kayyak Ventures, noted that Marco provides an alternative funding source for SMEs, reducing reliance on personal loans from friends and family.

He pointed to the growth of the factoring industry in countries like Chile, driven by electronic invoicing, and predicted that companies like Marco will lead the way in supply chain financing, narrowing the interest rate gap between small and large businesses.

“Marco’s ambition is to replicate this success globally,” Silva Lombardi said. “The potential for impact is significant. By leveraging technology, Marco is creating value for society as a whole, making it a worthy investment for venture capital firms.”

Company Performance and Future Plans

Since its product launch in January 2020, Marco has processed thousands of invoices across 20 countries, totaling over $18 million.

The company initially faced challenges due to pandemic-related disruptions to exports and supply chains, but has since established a strong foothold in the market.

Currently, Marco provides loans ranging from $25,000 to $10 million per month.

Strategic Investments and Leadership

The new funding will be allocated to simplifying cross-border payments, enhancing risk assessment capabilities, and developing methods for processing unstructured data. Marco also intends to enable large logistics providers to independently finance exports.

The company has also welcomed new leadership, including Prajwal Manalwar as chief product officer and Sabrina Teichman as chief growth officer. Manalwar previously spent 13 years at PayPal, while Teichman joins from the U.S. International Development Finance Corp.

“Our focus now is on scaling the solution by building robust infrastructure and leveraging partnerships with established players in shipping, trade services, and insurance,” Shoihet concluded. “By innovating the underwriting process, we can deliver more accurate assessments and become the leading trade finance-as-a-service provider for emerging markets.”