Digital freight forwarder Nowports said it sees big opportunities in the fintech world as it plots how to use its latest round of funding to bolster its logistics and complementary trade financing services.
The Monterrey, Mexico-based company helps businesses in Latin America with shipping by air, ocean and ground, along with providing insurance and inventory financing. It operates in a segment of the logistics industry that includes digital freight forwarding behemoth Flexport, which has a valuation of about $8 billion, in addition to Forto, Zencargo and Freightwalla.
Nowport’s $150 million Series C gives it unicorn status with a valuation of $1.1 billion. The company’s total funding raised to date now sits at $242.6 million.
Its latest raise was led by SoftBank Latin American Fund and also included Tiger Global, Foundation Capital, Monashees, Soma Capital, Broadhaven Ventures, Mouro Capital, Tencent, Base10 Partners and several angel investors.
“This increases our commitment to transform supply chains with technology and agile financing access for companies that import or export merchandise in the region,” Alfonso de los Rios, Nowports co-founder and CEO, said in a statement. “We will make Nowports one of the main promoters of all the emerging economies in the world, not just Latin America.”
Digital startups are emerging as new players in the trade financing world. As more digital players enter logistics, a McKinsey report suggested proliferation could help lead to standardization of information key to obtaining trade financing.
The global trade finance market was valued to be about $5.2 trillion in 2020, according to a study by McKinsey, the International Chamber of Commerce and Fung Business Intelligence. The report, released in November, pointed to logistics companies, such as freight forwarders and ocean carriers, as being among the core players in trade finance globally by helping the movement of information, such as bills of lading, that are necessary to obtaining financing.
Nowports is already offering inventory financing for companies in need of import capital. Its latest effort is to further pad the financial services offering for importers and exporters, “recognizing the grand opportunities in joining fintech with logitech,” the company said in its funding announcement.
“Inventory financing gives capital to Nowports’ customers to acquire more merchandise and pay later,” a spokesperson told Sourcing Journal. “They can get faster credits with preloaded information at Nowports’ platform and technology-backed approval processes.”
Nowports will also use the capital to expand its office footprint in new cities in Mexico, Brazil and Chile.
The strategy will also involve additional hires, more specifically in areas such as artificial intelligence, big data and Internet of Things. Nowports’ employee base is currently at about 500 people, but the company estimates that headcount will rise to 1,500 by year’s end, the spokesperson told Sourcing Journal.
The Series C follows the company’s $60 million raise in December, which saw Nowports open offices in Panama; Concepcion, Chile; and Medellin, Colombia. Nowports’ workforce is now spread across 10 offices in seven countries.
The company’s capital infusion is the latest in a number of freight forwarding companies closing on new funds so far this year. That includes Flexport’s $935 million Series E in February.
Although funding saw a bit of a slowdown between the fourth quarter and first quarter of this year, investor appetite for freight forwarders has continued.
Last month alone saw Convoy raise a $260 million Series E that bumped its valuation up to $3.8 billion, while Bolivia-based DeltaX raised a $1 million seed to help shippers in the Andean region find carriers and track shipments.