Despite hundreds of billions of dollars in goods crossing the US-Mexico border each year, the freight industry has remained analogous – each side of the border offering its own labyrinth of bureaucracy.
Nuvocargo, a digital logistics platform for cross-border trade, is trying to modernize the process. The company offers an all-in-one service that combines freight forwarding, customs brokerage, freight insurance, and even trade finance into one user-friendly software and application. According to Deepak Chhugani, CEO of Nuvocargo, bringing all these services together in one application makes it easier for companies to track their supply chain and allows customs and logistics teams to access more centralized information.
“And you only have one audit trail in case something goes wrong,” Chhugani told TechCrunch, adding that the process helps reduce or eliminate additional costs associated with high administrative costs. It also allows customers to have a high-level overview of their operations from a single interface, he said.
Chhugani compared the experience to something like Uber Eats, which gives customers the ability to easily track restaurant food orders at home.
“Imagine, because you’re dealing with so many different parties, you lose visibility of what’s going on. If you want a glimpse of – how much did I spend end to end? – you actually have to go through all these chains of emails, faxes or text messages with different providers, ”explained Chhugani. “Some of them might be in another country. So [Nuvocargo] simply creates more visibility throughout the process, from where the goods are to visibility around your finances. “
But Nuvocargo thinks beyond the actual movement of goods. The company is also beginning to offer full cross-border customs brokerage services, freight insurance and factoring, or short-term accounts receivable financing. The latter solution solves a particularly difficult problem for trucking companies, which sometimes have to wait up to 90 days net to be paid.
The approach caught the attention of investors: Almost a year after it announced it had raised a $ 5.3 million funding round, the company closed a $ 12 million Series A financing led by QED Investors and with injections from David Velez, Michael Ronen, Raymond Tonsing, FJ Labs and Clocktower. Investors NFX and ALLVP, who participated in the previous round, also participated.
The “holy grail” of their new offerings, as Chhugani called it, is trade finance. Because Nuvocargo will already have a relationship with businesses, including an understanding of credit and fraud risk, its hope is to be able to offer financial products at a competitive rate.
That’s what attracted QED Investors, a company that typically focuses on fintech rather than logistics and trucking.
“After speaking with [Deepak] and seeing the connection points and parallels between what we were looking for in e-commerce and the challenges of moving goods across the border, the spark of fintech started in my own head, ”said Lauren Connolley Morton, partner at QED interview with TechCrunch. “The opportunities for factoring, lending, and merchandise insurance all meet our expectations.”
Although Chhugani declined to disclose Nuvocargo’s valuation after this latest round of funding, it is clear that there is plenty of room to grow in the logistics industry’s huge, seemingly disaggregated value chain.