Why Latin America’s Freight Forwarding Opportunities Still Attract Capital

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“Investors are pouring money in the logistics and shipping business of Latin America,” said our former colleague John Schieber. wrote in 2019. But a pandemic later, amid turmoil over gas prices around the world, it’s time to rethink the situation.

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Ports (YC W19) is a good starting point for comparison. In February 2019, the Mexican startup was just wrapping up Y Combinator, and, according to Schieber, “installed[ing] become a Flexport in Latin America”. Fast forward to today and Nowports has raised $92.6 million in funding including $60 million Series B round led by Tiger.

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Examples like this abound as investors are optimistic about freight forwarding around the world. The pandemic has played a role in the development of logistics startups, shedding light on how important supply chains are. But venture capital continues to flow even as COVID-19 eases, as the latest news shows.

Just this month, TechCrunch reported on three fundraising events in the trucking world. Seattle-based Convoy is valued at $3.8 billion. $260 million Series E round. OnePort in Nigeria received an investment of $5 million this will help it expand to three major African hubs by the end of the year. And in Latin America, DeltaX has targeted the Andean region. and $1 million in the bank.

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The digitization of freight forwarding is a global challenge as the sector continues to lack transparency and efficiency. Latin American startups have a steeper rise, but it also encourages them to innovate and help each other in interesting ways.

Much more than imitators

In Latin America, the problem is not only that forwarding services are still largely similar, but also that they are not streamlined. According to a Mexican start-up, in the region, “the demand for trucking exceeds capacity, but 40% of the time trucks are empty.” BeGo (LCD W20).

In accordance with Jonathan Levy, whose Investo fund backed BeGo and Nowports, two startups represent the sector’s main models: marketplaces and forwarding companies. Brazil is another example. CargoX from the market and Nuvocargo on the forwarder’s side.

However, business models in Latin America often mix and Nuvocargo is a good example of this.


Credit: techcrunch.com /

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