Nuvocargo Raises $20.5M to Expand US-Mexico Trade

Nuvocargo Secures $20.5 Million in Funding to Streamline Cross-Border Trade

Nuvocargo, a logistics startup focused on simplifying international trade, has successfully raised $20.5 million in a funding round spearheaded by Tiger Global Management.

This investment has resulted in a company valuation of $180 million. This represents more than a doubling of the $70 million valuation achieved during a $12 million raise in April.

Capital Position and Investor Confidence

Interestingly, the company reported retaining a significant portion of its previous funding when Tiger Global initiated discussions.

“We weren’t actively seeking capital, however, Tiger Global demonstrated substantial confidence and swiftly presented a compelling term sheet,” stated Deepak Chhugani, co-founder and CEO of Nuvocargo.

Integrated Logistics Platform

Nuvocargo distinguishes itself by combining its technological infrastructure with a dedicated “team of experts.” This synergy facilitates comprehensive cargo movement within a unified platform.

Specifically, the company provides an all-encompassing service integrating freight forwarding, customs brokerage, cargo insurance, and trade financing into a user-friendly software and mobile application.

Customers benefit from enhanced visibility and improved data insights regarding their supply chains.

Addressing Complexities in US-Mexico Trade

“Moving a truckload from Mexico to the U.S. typically involves engaging a trucking company within Mexico, often through a broker,” Chhugani explained. “Upon reaching the border, navigating export and import documentation is essential.”

Furthermore, another transportation provider is required to move the cargo to its final destination within the United States. This secondary carrier is known as a transfer carrier.

The Traditional Logistics Landscape

Vendors then face a similar process within the U.S. to secure a trucking company for final delivery.

Mid-sized businesses often establish internal logistics departments to manage these complexities, including varying currencies, legal requirements, and vendor relationships. Alternatively, they rely on brokers and freight forwarders for partial support.

Nuvocargo’s Comprehensive Solution

“Our core offering allows us to manage the entire process for our clients,” Chhugani said. “We provide the infrastructure, transportation network, compliance expertise, and software necessary for end-to-end product movement, effectively functioning as an extension of their own teams.”

Expanding Service Offerings

Currently, Nuvocargo primarily concentrates on the transportation of goods. However, the company is actively developing and launching a range of additional products and services.

QuickPay for Carriers: A Financial Innovation

The company has recently introduced QuickPay for carriers, a financial product offering cash advances to truckers within the Nuvocargo marketplace.

“We’ve been conducting a limited private beta for a few months, and the response has been exceptionally positive,” Chhugani noted. “QuickPay for carriers has driven a 35% weekly increase in processing volumes and has already surpassed $1 million in annualized transaction value within weeks of its launch.”

Market Opportunity

Considering the approximately 10 million trucks transporting cargo between Mexico and the United States annually, Nuvocargo estimates the potential market for QuickPay to be around $20 billion per year.

Addressing Supply Chain Challenges

According to John Curtius of Tiger, Nuvocargo’s solutions have significant potential to enhance efficiencies within the trade corridor connecting the U.S. and Latin America, particularly given the ongoing supply chain disruptions.

Growth and Future Projections

Since its inception in late 2019, Nuvocargo has experienced approximately 30% month-over-month revenue growth. While specific revenue figures were not disclosed, Chhugani anticipates generating “tens of millions of dollars” in annual revenue in 2022.

The company is also projected to achieve 5x revenue growth compared to 2020. The team has tripled in size since the Series A funding in April, expanding from 30 to approximately 90 employees.

Investor Participation

The latest funding round also included participation from The Flexport Fund, Kavak COO Federico Ranero, and existing investors such as QED Investors, NFX, and ALLVP.

Previous investors include Y Combinator, Nubank founder David Velez, and the co-founders of several prominent unicorns, including Deel, Rappi, Ramp, and Loft. This brings Nuvocargo’s total funding to $37.8 million.

The Future of US-Mexico Trade

“The U.S.-Mexico cross-border trade is poised for expansion in the coming years, driven by Mexico’s growing manufacturing sector,” stated Hursh Narain, partner at The Flexport Fund. “Deepak is a remarkable founder with a deep understanding of the current landscape and a clear vision for a digitally-driven future.”

Ben Braverman, chief customer officer at Flexport and partner at The Flexport Fund, added that Nuvocargo aligns with their belief that digitally native service providers are better positioned to serve customers in global logistics than those attempting to integrate software into traditional, offline systems.